New Jersey Bankruptcy Eligibility
Filing bankruptcy is an important decision, and one that you want to make only once you have received expert counsel and have a clear understanding of the options and opportunities available to you. While we are ready to help you if you have already determined that filing bankruptcy is the direction you need to go, we are also here to make sure that you choose the right option . We also want to ensure we evaluate with you if there is a better option for your situation.
How do I know if I should file bankruptcy?
If you can no longer keep up with the payments on your credit cards, it may be the time to consider filing bankruptcy. If your wages are garnished after a judgment, it may be time to consider a bankruptcy. If you are in foreclosure and behind on your mortgage payments, it may be time to consider filing bankruptcy. If you have overwhelming debt of any kind and it just does not look like there is any way to pay, it may be time to consider bankruptcy. If any of these describe your current situation, it would be helpful to contact us and let us help you assess if filing bankruptcy is the best answer for you.
Contact us directly at 973-870-0434 or schedule an initial consultation with a New Jersey bankruptcy lawyer. We can give you a FREE bankruptcy consultation on the phone so we can discuss your options.
Proactive New Jersey Chapter 7 Bankruptcy Lawyer
The legal proceedings of bankruptcy can be confusing to a layperson. New Jersey bankruptcy attorney Robert Manchel explains the law in plain language so that you can make informed decisions about which course of action will be best for you and your family. His New Jersey bankruptcy law firm helps people living in Atlantic, Burlington, Camden, Cumberland, Gloucester, Hunterdon, Mercer, Middlesex, Monmouth, Ocean, Salem, and Somerset Counties. For more information on how Robert Manchel can help you get control of your finances, call him at 866.503.5655.
You may call 866.503.5655, to contact the Robert Machel, to discuss your chapter 7 questions.
Important: Chapter 7 Qualification Via New Jersey Means Test
An important element in filing for bankruptcy relief is the Bankruptcy Means Test. The Means Test is a bankruptcy form that calculates your average monthly and annual income. The test compares your income against the median income of other households in New Jersey.
If your average annual income or median income is below the New Jersey median income, you may qualify for a bankruptcy discharge under Chapter 7. You can estimate whether you qualify for a Chapter 7 bankruptcy using the free New Jersey Chapter 7 Bankruptcy Means Test Calculator below.
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Representing New Jersey Consumers Facing Chapter 7 Bankruptcy
When an individual faces overwhelming debt and a bleak financial future, they may need a way to right their financial ship. Though a person may think that there is no recovery, bankruptcy is there to help. Chapter 7 bankruptcy is the simplest form known to most. It allows a person to walk away from unsecured debts by liquidating assets. Simply put, you could get a fresh start after selling your assets that are not exempt. Many people shy away from bankruptcy because of an unjust stigma and the fear that they would lose their home. Many people are able to keep their homes and other possessions. The reality is, bankruptcy is regularly used by responsible people who have found themselves drowning in debt that was unforeseen, including medical bills, divorce costs, and more. If you need an attorney to guide you through the process of filing Chapter 7 bankruptcy, contact Underwood & Micklin for a consultation.
C New Jersey Debt Management
Debt settlement companies negotiate lower amounts. Debt management companies negotiate lower interest rates. This is the key distinction. Often these programs last 3 or 5 years. This option is often more expensive than debt settlement and some creditors such as personal loan lenders may not work with the debt management company. There may be debt management credit score implications as well.
Who may debt management in New Jersey best for? Debt management may be best for those that have all high-interest credit card debt, and a reduction from 22-30% interest rate to a 10% interest rate would continue to make the debt affordable.
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Mail Documents To Your Trustee
After you file your Chapter 7 bankruptcy in New Jersey, the court will assign a bankruptcy trustee to administer the case. Youâll be notified of your trusteeâs information and of the date of your first meeting of creditors .
Your trusteeâs job is to examine your petition and assets to decide how to best satisfy your creditors before discharging your remaining debt. Itâs important to cooperate with the trustee to keep your case moving and ensure youâll get the discharge youâve applied for. You need to give the trustee the documents they request.
At a minimum, you must provide the following documents at least seven days before your 341 meeting:
A copy of your most recent federal income tax return. A transcript of the return is also acceptable.
Copies of pay stubs from within the 60 days before you filed your petition.
A bank statement that covers the date of filing.
Keep an eye out for any additional requests from your trustee, and carefully review the instructions on when and how to provide documents.
New Jersey Median Income For Bankruptcy Means Test
New Jersey is typically one of the higher median income states in the United States often ranking in the top 5 for median income. For example, the median income to qualify for a Chapter 7 Bankruptcy in New Jersey for a one-person household is typically over $65,000 in gross income per year. Median income figures adjust regularly and are maintained for family sizes up to four persons with additional amounts added for families of five or more.
A couple simple examples of a New Jersey Chapter 7 Bankruptcy Means test analysis.
Bob and Jane are married with two minor children ages 4 and 2. Bob works as a police officer earning $70,000 per year in annual salary. Jane, before the children were born, was a full-time nurse but has worked part-time for the last several years while she is home with the children. She earns about $20,000 per year in part-time work. Bob and Jane would qualify for a Joint Chapter 7 Bankruptcy case as their income is below median income for a family size of four in New Jersey.
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How Chapter 7 Works: Discharging Your Debts
After determining what property is exempt, the non-exempt property is auctioned and distributed to creditors. Once this process is complete, most and occasionally all of a persons debts are discharged. Debts such as medical bills, credit cards, certain loans, and court judgments are typically all dischargeable in Chapter 7 bankruptcy. However, many types of debt survive the bankruptcy process, including student loans, alimony, child support, fines, court-imposed penalties, and certain taxes.
If youre considering bankruptcy, speak with an experienced bankruptcy lawyer for an analysis of their specific situation. The NJ bankruptcy laws are extremely complex, so navigating the bankruptcy process often requires the assistance of an experienced attorney who specializes in bankruptcy law.
Am I Eligible For Bankruptcy In New Jersey
Financial and personal honesty aren’t the only qualifications for bankruptcy. There are a few others, and some of these requirements are unwritten.
Furthermore, some qualifications apply to everyone. For example, everyone must complete two financial education classes. Other qualifications are Chapter-specific.
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New Jersey Chapter 7 Bankruptcy Credit Counseling And Debtor Education Courses
When you file for bankruptcy relief under Chapter 7 bankruptcy, you must complete two bankruptcy courses to receive a bankruptcy discharge. This includes a credit counseling course prior to filing a bankruptcy case, and a debtor education course after filing. See below the approved courses for New Jersey
The United States Trustees office has approved state-specific companies that offer bankruptcy courses. You can access a list of companies in New Jersey offering bankruptcy courses on the UST website. Both courses are available online for a small fee.
New Jersey Chapter 7 Bankruptcy Court Locations
Many 341 meetings of creditors have been over the phone or over Zoom due to the pandemic. That said, you may want to see where the courthouse is in New Jersey if there are any meetings that need to take place in person. Below are the court locations for filing bankruptcy based on the bankruptcy district.
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In addition to the above, review New Jersey local bankruptcy rules before filing a bankruptcy case. Some local rules may differ slightly from the Federal Bankruptcy Rules.
Passing The Test Doesnt Ensure Chapter 7 Eligibility
Even if you pass the means test, the bankruptcy court could deny your petition based on your monthly expenses and disposable income. If your expenses are very low and, in the view of the court, you have ample funds leftover each month, the court can require you to convert your petition to Chapter 13 bankruptcy.
However, you can get around the means test altogether if more than 50 percent of your debt is business related. For example, if you are a sole proprietor of a small business or you own an LLC, you might have gone into personal debt to support your business. But, before you decide to try to discharge your business debt through Chapter 7 consumer bankruptcy, you should talk to a knowledgeable bankruptcy attorney. There are other options in your case, such as Chapter 11 reorganization under the provisions of the Small Business Reorganization Act. I provide personalized counsel so you can make the best decision for your unique circumstances.
New Jersey Bankruptcy Means Test
To file Chapter 7 bankruptcy in New Jersey, you have to pass the means test. This test looks at your household income and compares it to the median income of similarly sized households in New Jersey. The goal is to make sure you don’t make too much money.
If you end up not qualifying, you might want to wait and see if your income ends up changing down the road and try again. Otherwise, Chapter 13 might be an option to explore to get your debts under control. A Chapter 13 plan reorganizes your debt and puts you on a payment plan.
Data on Median income levels for New Jersey
New Jersey Median Income Standards for Means Test for Cases Filed In2022
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Contact A Dedicated Attorney
A New Jersey bankruptcy lawyer stops creditor harassment, protects your property, discharges debts, and delivers a fresh start. If that sounds good, reach out to an attorney today.
Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts , ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law you are researching.
Dealing With Your Car
When you file Chapter 7 in New Jersey, you have several options to deal with your car and car loan, if you have one.
If your vehicle is paid off and you own it, then as long as your vehicle is worth less than $4,000 , itâs completely protected.
The same is true if you have a car loan but youâre current and have paid enough on the car that you have equity.
If youâre leasing your car, you can either keep everything as is or return the car as part of your New Jersey bankruptcy, without having to worry about the remaining balance.
Take a moment to evaluate your car loan and whether it makes sense for you to keep the car. If the payment is manageable and the loan balance isnât higher than the vehicle’s value, it may make sense to sign a reaffirmation agreement. The reaffirmation agreement is one of the more complicated forms to complete, so make sure to review the court’s instructions before doing so.
Alternatively, if you want to keep your car but the loan balance far exceeds its actual value, you can redeem the vehicle by paying only its value to the creditor. The remaining loan balance will then be eliminated when the court discharges your debt.
You can also consider buying a car after you file bankruptcy. You may want to wait a while to give your credit time to recover so you can get a better deal if you need financing.
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Do You Need A Bankruptcy Lawyer
- Do you find yourself weighed down by overwhelming debt?
- Do you often wonder if there is any debt relief available?
- Has bankruptcy been on your mind, or part of your conversations?
If you are saying “yes” to any of these questions, then it might be time for you to have a conversation with a bankruptcy lawyer. Life is full of surprises and curve balls and nobody has filing bankruptcy on their bucket list, but our attorneys are here to help you understand your options and navigate the journey of bankruptcy if it is right for you.
There are a lot of myths and misunderstandings around the topic of filing bankruptcy and good bankruptcy lawyers can help you begin to get a clear picture of whether filing bankruptcy is right for you, or if there are other options.
Our site is full of important information about all things bankruptcy related. We handle Chapter 7 bankruptcy, Chapter 13 bankruptcy and Chapter 11 bankruptcy, so we are ready to discuss every option that fits your situation.
As bankruptcy lawyers we have an understanding of the types of challenges that would cause you to consider filing bankruptcy, but also a keen compassion for those challenges. As New Jersey bankruptcy lawyers, we also have a very clear understanding of the unique legal issues that exist here in our beautiful state.
We invite you to contact us at 973-870-0434 or schedule a FREE initial consultation today and let us help you take a step towards finding debt relief and the peace of mind you need.
Filing Chapter 13 In New Jersey
Chapter 13 bankruptcy in New Jersey are repayment plans supervised by the bankruptcy courts. A Chapter 13 trustee administers the estate and distributes your payments to your creditors. If your median income exceeds the median income for New Jersey, your plan payment must be calculated based on a five-year plan. If your median income is below the states median income level, you can propose a three-year plan.
Your plan payment is based on several factors. Factors that impact how much money you must pay into the Chapter 13 plan include:
- The amount of your disposable income
- Whether you owe priority unsecured debts that must be paid in full, such as back child support or tax debts
- If you are paying mortgage arrearage to keep your home
- The amount owed on your car loan and,
- Whether you have non-exempt equity in any property.
Filing Chapter 13 in New Jersey has some advantages over a Chapter 7 case. For instance, you can catch up on mortgage payments in Chapter 13 to stop foreclosure. You can also include your car payments in your Chapter 13 plan to stretch out the debt another five years. In some cases, you may even lower the amount you owe on the secured portion of your car loan. Tax debts, back alimony, and unpaid child support can also be included in a Chapter 13 plan.
Also, a bankruptcy quiz can help you understand some of these elements.
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What Is A Chapter 11 Bankruptcy
Chapter 11 bankruptcy is often thought of as the commercial bankruptcy option for businesses, sole proprietors and partnerships seeking to restructure their debts while they liquidate assets and restructure payment plans with creditors. Individuals with more than $1 million in secured debt and $330,000 in unsecured debt may also take advantage of the provisions of Chapter 11 bankruptcy.
What Can Chapter 11 Do?
A chapter 11 bankruptcy case of a corporation does not put the personal assets of the stockholders at risk other than the value of their investment in the company’s stock.
A sole proprietorship , on the other hand, does not have an identity separate and distinct from its owner accordingly, a bankruptcy case involving a sole proprietorship includes both the business and personal assets of the owners-debtors. Like a corporation, a partnership exists separate and apart from its partners. In a partnership bankruptcy case , however, the partners’ personal assets may, in some cases, be used to pay creditors in the bankruptcy case or the partners may, themselves, be forced to file for bankruptcy protection.
Section 1107 of the code places the debtor in possession in the position of a fiduciary, with the rights and powers of a Chapter 11 trustee, and requires the performance of all but the investigative functions and duties of a trustee. These duties are set forth in the Bankruptcy Code and Federal Rules of Bankruptcy Procedure.
New Jersey Chapter 7 Bankruptcy Lawyers
- Are you struggling with financial debt?
- Are you late with credit card or mortgage payments?
At Aiello, Harris, Marth, Tunnero & Schiffman, our sophisticated bankruptcy attorneys have the skills and resources to help you get out from underneath your debt with a Chapter 7 bankruptcy filing. This type of bankruptcy allows you to wipe your slate clean and start over fresh. Our New Jersey bankruptcy lawyers can help you to obtain a fresh start and eliminate your debt.
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