A COMPREHENSIVE GUIDE TO NJ BANKRUPTCY LAWS

Explore NJ bankruptcy laws with professional guidance! Learn how to navigate the process for swift debt relief and a fresh financial start.

What Is Bankruptcy in New Jersey?

When financial burdens become too heavy, filing for bankruptcy may be your best option. Bankruptcy protects you from liability for unpaid debts and provides a supervised way to a fresh start.

In New Jersey, bankruptcy is governed by the United States Bankruptcy Code, the Federal Rules of Bankruptcy Procedure, and the local rules of the New Jersey Bankruptcy Court.

Understanding these laws can help you make the right decisions and avoid falling for the myths surrounding bankruptcy. If you need further help or advice, efficient New Jersey bankruptcy attorneys at the Law Offices of Wenarsky and Goldstein, LLC, can answer your questions.

Types of Bankruptcy in New Jersey

In New Jersey, individuals can file for Chapter 7, Chapter 11, Chapter 12, or Chapter 13 bankruptcy, whereas businesses can file for Chapter 7 or 11 only. However, Chapters 7 and 13 are the most common.

Navigating the process and requirements can be overwhelming, especially for those struggling financially. Here’s a quick guide to Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is for individuals or businesses that struggle to repay their debts. It involves selling their nonexempt assets to pay creditors. This type of bankruptcy can rarely help with secured debts, but you will be discharged from paying unsecured debts, such as credit card debt, personal loans, or medical bills. Utility bills can also be discharged.

New Jersey offers several exemptions to protect certain assets from liquidation during bankruptcy proceedings. However, the exemption amounts are usually low by modern standards.

The New Jersey Senate recognized this shortfall in bill S-2423, which would increase the property exemption amount.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy allows individuals to restructure their debts. This personal bankruptcy chapter is ideal for those with a reliable source of income but unable to pay their debts in full. With Chapter 13 bankruptcy protection, you can create a repayment plan over three to five years that allows you to save your property and pay off debts.

Eligibility Requirements for Bankruptcy in New Jersey

You must meet specific requirements to be eligible for bankruptcy relief.

For Chapter 7 bankruptcy, you must pass the “means test,” which compares your income to the state median income for your household size. If your income falls below the median, you qualify for Chapter 7. Otherwise, you may be required to file for Chapter 13.

For Chapter 13, you must show that your disposable income, which is the difference between your income and the allowed expenses, is enough to cover your repayment obligations.

What Are Bankruptcy Exemptions

Bankruptcy exemptions protect certain property assets, such as houses and retirement accounts, from liquidation for debt payment purposes.

New Jersey residents are eligible for the bankruptcy exemption packages the federal bankruptcy code and state statutes provide. When filing bankruptcy, you can choose either state or federal exemptions, whatever serves you best. However, you can’t choose or mix both exemptions.

Under New Jersey bankruptcy laws, you may exempt only $1,000 in personal property. Personal assets include any property other than real estate, such as cars, electronics, or jewelry.

However, Bill S-2423 would increase this exempt property amount to $10,000 if passed as law. More importantly, it would establish a $340,000 homestead exemption. In other words, it would allow you to exempt up to $340,000 of home equity from bankruptcy protection.

These changes could also decrease the monthly payments under a bankruptcy payment plan. They could also prevent debtors from having to sell certain assets to pay creditors.

Exemptions are not automatic, so you must list your exempt assets in your bankruptcy petition. Understanding the exemptions available under federal and state laws can help you protect as many assets as possible. Our bankruptcy attorney in New Jersey will be happy to help you.

Bankruptcy Filing Process in New Jersey

Filing for bankruptcy requires specific steps to be followed. Here are the basic steps of the process:

  1. Complete a credit counseling course from an approved credit counseling agency before filing for bankruptcy.
  2. After obtaining the counseling certificate, you can file the required petition, statements, and schedules with the appropriate bankruptcy court where you live. You may want to seek legal counsel to avoid common mistakes made before filing for bankruptcy.
  3. After filing your bankruptcy petition, the court will appoint a bankruptcy trustee to your case. They will divide your property into exempt and nonexempt property, then sell what’s deemed nonexempt to settle priority debts.
  4. You must attend a meeting of creditors (also known as a 341 meeting) where the trustee and creditors can ask you questions about your financial affairs.
  5. Once you complete all required steps, attend any hearings or follow-ups, and pay all fees, the court will discharge your debts.

If you are a creditor who will be part of a bankruptcy meeting, you may need to consult a creditor-bankruptcy lawyer from the Law Offices of Wenarsky & Goldstein, LLC for legal representation. We can help you protect your rights as a creditor and ensure that the bankruptcy process is fair to all parties involved.

Required Forms and Supporting Documents

To file for bankruptcy in New Jersey, you must complete several forms and statements of financial affairs along with the credit counseling certificate. You must also provide supporting financial documents, including tax returns and bank statements.

It’s crucial to ensure that all forms are completed accurately. Any mistakes or omissions can delay the process and potentially result in your case being dismissed. An experienced bankruptcy attorney can assist you in completing all necessary forms and ensuring you have provided all required documents.

Bankruptcy Fees in NJ

Filing for bankruptcy in New Jersey, Chapter 7, costs $338. However, if your income is below 150% of the poverty guidelines, you may be eligible for a bankruptcy filing fee waiver.

The filing fee for a Chapter 13 petition is $313. You may apply for an installment schedule if you can’t pay the fee when the petition is filed.

Other expenses you must consider include credit counseling and debtor education course costs, and attorney fees.

Debtors are not required to hire New Jersey bankruptcy lawyers. However, their knowledge and experience may be instrumental in your case. They can guide you through the process and give you proper legal advice.

How Can a Bankruptcy Attorney Help?

The bankruptcy process can be challenging, but understanding the bankruptcy laws in New Jersey can make it easier.

If you’re considering bankruptcy, it’s vital to consult with an experienced bankruptcy lawyer to discuss the process and its impact on your life. They can guide you through the process and increase your chances of a favorable outcome.

Remember, filing for bankruptcy is not the end of the road. It’s an opportunity to take control of your life and future. With the help of a skilled lawyer, you can overcome financial challenges and start rebuilding your credit.

Contact a New Jersey Bankruptcy Lawyer Today!

If you’re struggling with overwhelming debt and considering filing for bankruptcy, the Law Offices of Wenarsky & Goldstein, LLC can help.

We offer a free bankruptcy consultation, where we will review your financial situation and advise you on the best course of action. Our experienced New Jersey bankruptcy attorneys can also help with wage garnishment, credit report issues, and other matters related to your bankruptcy case.

Don’t let financial challenges hold you back any longer. Contact us today to schedule a consultation and start your journey towards a brighter financial future!

Call the Law Office of Wenarsky & Goldstein

At the Law Offices of Wenarsky & Goldstein, LLC, our New York and New Jersey attorneys are experienced and knowledgeable in bankruptcy, estate planning and probate, guardianship, special needs planning, and real estate law. To learn more about how we can assist you with your legal needs, call us today at 973-453-2838.

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