Filing bankruptcy in New Jersey is a last resort for many residents in New Jersey. Job layoffs, cutbacks, and credit card debt means people need to file Chapter 7, have many debts expunged, and get a fresh start for a better financial future. Alternatively, other individuals choose to file chapter 13, have their payments restructured, retain assets, and have a more manageable repayment plan.
New Jersey Bankruptcy Topics
- Personal Bankruptcy Options
- Keep Your Home: Bankruptcy and Foreclosure
- New Jersey Exemptions to Bankruptcy Liquidation
- Options for Filing Bankruptcy
- Local Bankruptcy Courts and Trustees
The U.S. bankruptcy code under title 11 allows citizens of New Jersey to file either Chapter 7 straight bankruptcy or Chapter 13 restructuring bankruptcy.
Chapter 7 Bankruptcy
Under Chapter 7, debtors can lose their assets. The court trustee seizes all properties that are not exempt and have enough value to help satisfy at least part of the balance owed to creditors. Although some debts, like child support payments, cannot be erased, qualifying individuals have their financial slate wiped clean of many debts, like those massive credit card payments. However, debtors must pass a means test, in order to qualify for bankruptcy. In the state of New Jersey, the average earnings of a single individual is $57,120, a family of two is $69,853, and a household of three is $85,397.
Chapter 13 Bankruptcy
For the people of New Jersey that want to retain their assets, pay their debts, but have their payments restructured to a more affordable level, Chapter 13 is the recommended bankruptcy. As long as current payments are kept up-to-date, the past debts are evaluated and the court mandates a new payment plan. Instead of paying creditors, the debtors send the monthly lump sum payment to the trustee, who distributes the amount according to the legal agreement. However, qualifying debtors have no more than $1,010, 650 in secured debt and $336,900 in unsecured debt.
Waiting to file bankruptcy after foreclosure proceedings are initiated may not save a debtors home or other assets. While filing stops creditor harassment, the lien holder can request the court to lift the stay on property under foreclosure, and it is then resold to satisfy the debt. The best plan is to contact a bankruptcy lawyer in the event that payments are behind, and there is no foreseeable change in financial fortunes. Legal advice reveals the best options available, depending on personal circumstances.
In the state of New Jersey, many assets are exempt from any bankruptcy proceedings. Among the items for the debtor to keep are:
Type of Asset(s)
Details on Applicable Exemption(s)
Annuity proceeds up to $500 monthly, military or civil service death or disability benefits, group life or health proceeds, fraternity and society benefits, life insurance payments-if specifically stated cannot be used for debt repayment, life insurance for beneficiaries
Business partnership assets
Civil, county, and city employee pensions, qualifying ERISA, trusts, state employees and teachers
Furniture and household goods up to $1000, clothing, burial plots, and personal items up to $1000
Unemployment, workmen’s comp, old age disability, compensation for crime victims
90% of unpaid wages un $7500-otherwise, the judge will make determination, wages and allowances for those in the military
Use a Bankruptcy Lawyer
Using a bankruptcy lawyer is strongly recommended. With all of the nuances in the law, lists of bankruptcy exemptions, and legal paperwork alone, it is risky to go to court without legal representation. The financial ramifications can be detrimental to the debtor’s case. Forgetting any of the legal requirements, even accidentally, often leads to dismissal or possible charges of fraud.
Use a Filing Service
In order to save money, a filing service can fill out the proper paperwork and submit it to the bankruptcy court. However, the service is not responsible for any mistakes; nor are they available to answer any questions during court proceedings, or provide legal advice. A filing service is not recommended.
File “Pro Se”
Debtors that cannot afford the services of a lawyer may file on their own behalves. However, filing pro se is strongly discouraged. Without legal representation, a positive resolution to the case, with all of exempt assets intact, is in doubt. Professional legal advice represents the best interests of the debtor.
New Jersey District Court
4015 Martin Luther King, Jr.
Federal Bldg and U.S. Courthouse
50 Walnut Street
Newark, NJ 07102