New Jersey Bankruptcy Information
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.
Filing a Chapter 7 Bankruptcy 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.
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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