PERSONAL BANKRUPTCY ATTORNEY IN NEW JERSEY

An experienced attorney can also explain common mistakes made before filing for bankruptcy and how to avoid them. If you are struggling to keep up with your debts, and looking for a fresh financial start, hiring an NJ bankruptcy lawyer can be a smart move.

What Is Bankruptcy?

Bankruptcy is a legal, court-facilitated process wherein a debtor repays some or all of their debts or seeks relief from some or all of their debts. Because it is a legal process that the court facilitates, many rules and requirements are associated with filing for bankruptcy.

What’s more, the outcome of a bankruptcy case is legally binding. You’ll have to repay some or all of your debts as ordered by the bankruptcy court; creditors are also obligated to forgive debts as ordered by a bankruptcy court.

How Does Personal Bankruptcy Work?

In every bankruptcy case, there are specific steps you have to take. These steps include:

• Collect Necessary Documents
• Complete and File Bankruptcy Petition
• Take a Credit Counseling Course
• Attend a 341 Meeting
• Take a Debtor Education Course

However, in addition to completing these steps, understanding the difference between types of personal bankruptcy and secured and unsecured debts is also important. Whether a debt is secured or not makes a big difference when discharging debts.

Types of Personal Bankruptcy

Suppose you are an individual who is thinking about filing for bankruptcy. In that case, you must know that there are two common types of bankruptcy for individuals: Chapter 7 bankruptcy and Chapter 13 bankruptcy.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy, also called liquidation bankruptcy, is designed for debtors with limited assets and income and therefore pass the “means test.”

In a Chapter 7 bankruptcy, your non-exempt assets will be liquidated, and the money obtained will be used to pay back the creditors as much as possible. This type of bankruptcy filing will remain on your credit report for ten years.

Chapter 13 Bankruptcy

While debtors who don’t have enough income to pay off their debts usually choose Chapter 7, those who have the income to pay off at least some of their debts typically choose Chapter 13 bankruptcy.

Filing for a Chapter 13 bankruptcy has advantages over a Chapter 7 bankruptcy. In a Chapter 13 bankruptcy, also known as a wage earner’s plan, you will enter into a payment plan with your creditors for 3-5 years. At the end of that period, your remaining debts will be forgiven.

Filing for Chapter 13 will also halt foreclosure proceedings and give the debtor time to catch up on payments. In addition, with Chapter 13, more debts can be included than with the Chapter 7 plan, such as certain tax obligations and debts from divorce proceedings. But, as with Chapter 7 bankruptcy, student loans, child support, and alimony debts are among debts deemed not eligible for discharge.

A Chapter 13 bankruptcy will stay on your credit report for seven years.

Wage Garnishment Protection

Wage garnishment occurs when creditors obtain court orders to deduct money directly from your paycheck. New Jersey allows creditors to garnish up to 25% of disposable income for most debts. Medical bills, credit card debt, and personal loans can all lead to garnishment.

The automatic stay in bankruptcy immediately stops wage garnishment proceedings. Even if garnishment has already begun, filing for bankruptcy protection can halt future deductions. Chapter 13 bankruptcy may allow you to recover some previously garnished wages through your repayment plan.

For federal tax debt, the IRS can garnish wages without court approval. However, bankruptcy still provides options for managing tax obligations through structured payment plans.

Student Loan Debt Considerations

Student loans present unique challenges in bankruptcy proceedings. Federal and private student loans are generally not dischargeable in Chapter 7 or Chapter 13 bankruptcy. However, this doesn’t mean bankruptcy offers no relief for borrowers struggling with education debt.

Chapter 13 bankruptcy can provide breathing room by consolidating other debts into a manageable payment plan. Eliminating credit card debt, medical bills, and personal loans frees up income to address student loan payments. Some borrowers find they can better manage student loan obligations after discharging other debts.

In rare circumstances, student loans may be discharged if borrowers can prove “undue hardship” through the Brunner test. This requires demonstrating: inability to maintain minimal living standards while repaying loans, persistence of financial hardship, and good faith efforts to repay.

Recent changes in federal policy have made income-driven repayment plans more accessible. Bankruptcy attorneys can help evaluate whether debt consolidation through bankruptcy creates opportunities for better student loan management strategies.

Each situation requires careful analysis. Professional legal guidance ensures you understand all available options for comprehensive debt relief.

Don’t forget that bankruptcy involves creditors in addition to debtors. If you are a creditor or rent property to an individual who has filed for bankruptcy, you will be involved in the process whether you like it or not. You may need to hire a creditor-bankruptcy lawyer to protect your rights if that happens to you.

Is Filing Bankruptcy the Only Option for Debt Relief?

If you are unsure whether bankruptcy is right for you, talking to a professional is essential. Filing for bankruptcy is a huge decision that can significantly impact your life.

If you are not sure about the legal options you have, it is best to consult with experienced attorneys. They will guide you through the process and help you find the best possible options.

Moreover, our NJ bankruptcy attorney can provide options for saving your house if you are facing foreclosure with or without bankruptcy protection. Many people facing the threat of foreclosure have underlying debt problems and go through financial distress, which makes it difficult to keep up with mortgage payments.

With our approach, which uses bankruptcy as a foreclosure defense, our clients don’t just pause the foreclosure process. This procedure can also help address the reason for the closure: their financial situation. We can use our knowledge of New Jersey foreclosure and bankruptcy laws to advise clients about their options, help them determine which type of bankruptcy suits them best, and support them through every step of the bankruptcy proceeding.

Our attorney will guide you through your options, explain how bankruptcy works and the different types of bankruptcy filings, and represent your best interests every step of the way. They can help you determine which debts can be discharged and which type of bankruptcy will serve you best.

To learn more about filing for personal bankruptcy in New Jersey, bankruptcy rules, and whether filing for bankruptcy may be a good option for you, call our personal bankruptcy attorney at the Law Offices of Wenarsky and Goldstein, LLC today.

Our Bankruptcy Practice Areas in New Jersey

Chapter 7 Bankruptcy

Chapter 13 Bankruptcy

Bankruptcy Litigation

Business Bankruptcy

Medical Debt Bankruptcy

Personal Bankruptcy

Student Loan Bankruptcy

Foreclosure

Frequently Asked Questions

How Much Does It Cost to File for Bankruptcy in New Jersey?

Filing Chapter 13 bankruptcy in New Jersey costs $313. That includes a $235 filing fee and the $78 administrative fee. To file a New Jersey Chapter 7 bankruptcy, you may pay $338. However, these court fees don’t include New Jersey bankruptcy attorneys’ fees.

If you can’t afford to pay the filing fee, you may be able to pay it in installments, or the fee can be waived. For example, Chapter 7 bankruptcy filing fees can be waived if you exceed 150% of poverty guidelines.

What Kind of Bankruptcy Forgives all Debt?

Although not all obligations go away in Chapter 7 bankruptcy, it allows you to discharge many debts, such as medical bills, credit card debt, overdue utility or cellphone bills, rent payments, and maybe even home mortgages.

However, student loans, child support payments, recent tax obligations, or court-ordered damages you must pay in drunk driving or personal injury cases can’t be discharged.

Do You Have Enough Debt to File for Bankruptcy?

There is no minimum debt you must face to be able to file for bankruptcy. You can typically file for bankruptcy if you are eligible and pass the means test.

However, many bankruptcy attorneys may advise their clients against filing for bankruptcy if they have less than $10,000 in dischargeable debt. Also, if your debt is insignificant, the bankruptcy court will want to ensure you pursue bankruptcy in good faith, not to avoid paying for your obligations.