Making the decision to file for bankruptcy is always a difficult one and it should be something that you’ve put a great deal of time and thought into. Filing for bankruptcy in New Jersey will have an effect on your future credit, your way of life and the process could even take a toll on your reputation. However, it can quickly put into action changes that improve your short-term quality of life by making all of those harassing phone calls and letters stop. There are many pros and cons to filing for bankruptcy and for those living in New Jersey, the process is not much different than in other states.
How Does New Jersey Bankruptcy Differ from Federal Bankruptcy?
When exploring the differences between federal bankruptcy and New Jersey bankruptcy, it’s important to have a clear understanding of the basic process. Simply put, when you choose to file bankruptcy, you are entering into a legal proceeding stating that you are unable to pay your bills and other debts. This process will help to give you a fresh start and keep debt collectors away.
The right to file for bankruptcy is made available under federal law and each bankruptcy case that is filed in the US is handled in federal court. Once you file for bankruptcy in New Jersey or any other state, your creditors must immediately stop trying to collect the debts that you owe. Depending on the type of bankruptcy filed, you may then have time to sort out your debts according to bankruptcy laws and determine a repayment plan.
Some of the main benefits of filing for bankruptcy may include:
- Putting a stop to debt collection harassment, wage garnishment and other creditor actions
- Prevent termination or restore utility services
- Stop or prevent foreclosure on your home with an opportunity to catch up on missed payments
- A discharge of debts where the legal obligation to pay back most or all of your debts is eliminated
- Puts a stop to the repossession of your vehicle or other property (creditors may even be forced to return repossessed property)
- Challenge any claims from creditors who have tried to collect more than you actually owe
- And more
Filing for Bankruptcy in the State of New Jersey
In general, the bankruptcy process in New Jersey is similar to most other states because it is governed by federal law. But for those filing in New Jersey, there is some specific information that must be included on your bankruptcy forms.
Means Testing in New Jersey
Before you can file for bankruptcy in the state of New Jersey you must work to compare your income to the median income for your household size in the state. If it is determined that your current income is less than the median, you are eligible to file for Chapter 7 bankruptcy. Additionally, if your income is lower than the median and you file for Chapter 13 bankruptcy, you will be eligible for a 3-year repayment plan instead of the 5-year repayment option.
If your income is above the median income in New Jersey, you may still be eligible to file for Chapter 7 bankruptcy after providing more detailed information about your regular expenses and any payments being made on your secure debts, via a means test. If you are filing Chapter 13 and your income is above the state median, you will be required to provide the same information in an official form.
What is the New Jersey Median Income?
For a single person household in New Jersey, the median income is $60,322. For a family of 2, the median income is at $67,503. If you want more detailed information on the median income figures for additional household sizes in New Jersey, you can find them here.
Credit Counseling and Debtor Education
Whether you are filing for Chapter 7 or Chapter 13 bankruptcy, you must include proof that you completed credit counseling from an approved US Trustee agency in New Jersey within 6 months from the date of filing. Additionally, New Jersey bankruptcy requires that you complete a debtor education course after filing. This is mandatory in order to be granted a discharge. As your trusted New Jersey bankruptcy law firm, we are happy to help you find an accredited credit counseling and debtor education agency to guide you through the process.
Exemptions in New Jersey
Another important difference in the bankruptcy process that New Jersey residents must be aware of our state-specific exemptions. When you file for bankruptcy in New Jersey you can either choose to use the federal exemptions that have been put in place or you can use the state exemptions. The state has put in place a set of exemptions that work to determine what property you are able to keep when filing for Chapter 7 bankruptcy. For those filing Chapter 13 bankruptcy in New Jersey, these exemptions will play a role in how much you must repay to your creditors.
Other Requirements for Filing in the New Jersey Bankruptcy Court
New Jersey has only one federal judicial district, making it relatively easy to find the correct judicial district for filing. However, it is important to make sure you meet a few other requirements before you file, including:
- You have been a resident of New Jersey for the greater part of 180 days before filing
- You maintain your home with an intent to stay (or you have been domiciled) in New Jersey while living somewhere else temporarily. For example, you were out of state due to a military deployment or temporarily living out of state for work.
If you do not meet either of these requirements, you are not eligible to file for bankruptcy in New Jersey and must continue the filing process in your previous state of residence.
Begin the Bankruptcy Filing Process Today
As your trusted New Jersey bankruptcy attorneys, the team at Scura is here to help you through the filing process and regain control of your financial future. Whether you feel like you may qualify for Chapter 7 or Chapter 13 bankruptcy in New Jersey, our dedicated and experienced lawyers want to make sure that you have everything in order before you file. For more information on the services we offer or to schedule an initial consultation with one of our New Jersey bankruptcy attorneys, visit Scura online today.
Whether you need to completely eliminate your debt through Chapter 7 bankruptcy, or need to reorganize your credit payments through Chapter 13 or Chapter 11, we are well qualified as a full-service bankruptcy law firm for people in these and other New Jersey counties: Passaic County, Hudson County, Essex County, Bergen County, Morris County, and Sussex County. Call us today at 973-870-0434 or toll free 888-412-5091.