What are my options for personal bankruptcy in New Jersey?

If you are filing bankruptcy in NJ, there are two possible options that you can consider for personal bankruptcy. You may not be eligible for both of these options, depending on your income status. The two options are:

• Chapter 7. Chapter 7 or total liquidation bankruptcy is reserved only for those people who truly cannot pay anything towards their debts. To ensure chapter 7 bankruptcy is not abused, there are income tests put into place. Those qualifying for a chapter 7 bankruptcy must make either below the New Jersey median or must pass a means test to show they don't have money to both pay a debt repayment plan and provide basic living expenses. Qualifying individuals will be required to turn over the bulk of their assets, except those that are exempt, and the assets will be sold and/or turned over to creditors to satisfy as much of the debt as possible. Any balance that remains is then forgiven or discharged and becomes uncollectible, except for balances of debts not eligible for discharge like student loan debt or child support
• Chapter 13. Chapter 13, or wage earners bankruptcy, is an option for those who are not eligible for a chapter 7. There are no income qualifications, but if you file chapter 13, you must have a payment plan in place that is signed off on by creditors and the bankruptcy court. The payment plan will set payments based on your income for a three to five year period, so your creditors may be paid back some of what is owed. 

For assistance in understand which of the chapters of bankruptcy is right for you and which chapter you may be eligible for in New Jersey, you should strongly consider speaking with an attorney for guidance.