Filing Chapter 7 Bankruptcy in New Jersey
Filing a Chapter 7 Bankruptcy in New Jersey can be the simplest, fastest and easiest way to discharge many types of unsecured debts, including medical bills and credit card debts. Unfortunately, changes to the bankruptcy laws in 2005 and have made it more difficult to qualify for a New Jersey Chapter 7 Bankruptcy.
If you qualify for a Chapter 7 New Jersey Bankruptcy, a trustee, appointed by the bankruptcy court, will liquate your qualifying assets and use the proceeds from the sale to repay your creditors. Creditors will be paid in the priority order outlined in bankruptcy laws.
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Chapter 7 Means Testing In New Jersey
Prior to filing a New Jersey bankruptcy, you must first determine which type of bankruptcy you can file. New Jersey bankruptcy attorneys can review your financial information and complete the means test, which is a two-part test, to determine if you are eligible for Chapter 7 Bankruptcy.
The first step in Chapter 7 Bankruptcy is called the income test. The income test determines if your median income is less than the average income of other families of similar size in New Jersey. If your income is above other New Jersey family's income, you may be forced to file a New Jersey Chapter 13 Bankruptcy. If your income is below New Jersey's median income, you generally may file Chapter 7 Bankruptcy.
The Median income for New Jersey beginning March 15, 2011, for a single wage earner was $59,060. For a two person family it was $70,680 and for a family of three it was $85,573. For a family of four it was $101,106.
If you fail the income test, a New Jersey bankruptcy lawyer will evaluate your disposable income to determine if you can repay your creditors. Disposable income is calculated by subtracting certain allowable expenses from your income. If the your disposable income for the next 5 years is less than $6,000 or $100 per month, then you generally can file a New Jersey Chapter 7 Bankruptcy.
If your disposable income, over the next 5 years, is more than $10,000, you may be forced to file a New Jersey Chapter 7 Bankruptcy. Questions may arise if your disposable income is between $6,000 and $10,000 and the bankruptcy lawyer must complete additional calculations.
One additional calculation is to determine if your disposable income over the next 5 years is greater than 25% of your unsecured, non-priority debts. If it is, you may have to file Chapter 13 Bankruptcy in New Jersey.
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Filing a Chapter 13 Bankruptcy in New Jersey
Filing Chapter 13 Bankruptcy in New Jersey will not immediately discharge your debts, but it does provide certain benefits. For instance, in many cases you may be able stop home foreclosure and keep you house.
Under a New Jersey Chapter 13 Bankruptcy you may create a 3 to 5 year debt repayment schedule and pay certain debts with more favorable terms. If you complete the debt repayment plan, debts contained within the plan are discharge.
Most individuals, including the self-employed or those operating an unincorporated business, may file Chapter 13 Bankruptcy but they must have unsecured debt which is less than $360,475 and secured debt which is less than $1,081,400 (11 U.S.C. § 109(e)).
State and federal bankruptcy laws identify which assets are included in the bankruptcy process. Each state has created their own bankruptcy exemptions list, but some states allow filers to use either the state list or the federal list. New Jersey bankruptcy law allows you to use either the federal or the New Jersey state exemption list.
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What debts are not discharged by filing a New Jersey Bankruptcy?
All debts are not discharged by filing a New Jersey Bankruptcy. Prior to filing either a Chapter 7 or Chapter 13 Bankruptcy in New Jersey, talk to a bankruptcy lawyer. If you have debts that are not discharged by filing a New Jersey Bankruptcy you must continue to make debt payments. Filing bankruptcy in New Jersey will not discharge the following types of debts:
- Debts for personal injuries (including driving while intoxicated by drugs or alcohol)
- Student loans (exceptions may be made if you can prove that there would be an undue hardship if it was repaid)
- Fines or penalties for any criminal offenses, including traffic fines
- Income tax debts (from the past 3 years)
- Debts omitted from the bankruptcy documents
- Child support or spousal support payments
Debts not discharged by filing a New Jersey Chapter 7 Bankruptcy case (if challenged by the creditor)
- Debts incurred from larceny, breach of trust or embezzlement
- Debts from the malicious or willful injury of another person or their property
- Credit purchases of $1,150 or more for luxury goods or services within 60 days of filing Chapter 7 Bankruptcy in New Jersey
- Debts incurred from fraud
- Debts owed from a divorce decree or settlement (may be discharged if the court determines the benefit you would receive by the discharge outweighs the detriment to your ex-spouse)
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Hiring a New Jersey Bankruptcy Lawyer
Stop Car Repossession With a Bankruptcy LawyerCreditor harassment, wage garnishments, bank account levies, property repossession, if you are in financial distress you may be facing many of these issues. Regardless of why you are in financial crisis, you need help.
Lawyers in New Jersey understand bankruptcy laws and can help you with many of these issues. Filing bankruptcy in South Caroline is an important decision and should not be made without first considering all of the alternatives to bankruptcy.
If you qualify for bankruptcy, a New Jersey bankruptcy may allow you to either discharge most of your qualifying unsecured debt through a New Jersey Chapter 7 Bankruptcy or create a new debt repayment schedule through a New Jersey Chapter 13 Bankruptcy. Contact a New Jersey Bankruptcy Lawyer to determine if bankruptcy is right for you.
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New Jersey Bankruptcy Attorneys
Following is a list of bankruptcy attorneys who practice law in New Jersey. To contact one of these attorneys, please complete our free case evaluation form or call 800-859-0844
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Audubon Jenkins and Clayman 412 White Horse Pile Audubon, NJ 08106 |
Map & Directions Call Now: 800-859-0844 Contact for your Free Evaluation |
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Green Brook Stephen M Goldberg PC 917 N Washington Ave Green Brook, NJ 08812 |
Map & Directions Call Now: 800-859-0844 Contact for your Free Evaluation |
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Wall James J Cerbone 2430 Highway 34, Building B, Suite 22 Wall, NJ 08736 |
Map & Directions Call Now: 800-859-0844 Contact for your Free Evaluation |
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Related Pages
Means Test - as defined in our Bankruptcy Glossary
Bankruptcy Court - as defined in our Bankruptcy Glossary
Liquidation - as defined in our Bankruptcy Glossary
New Jersey Bankruptcy Law Information:
Questions About New Jersey Bankruptcy?
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