The burden of debt can be overwhelming, and it can feel like there’s no way out. But filing for bankruptcy can be a solution that allows you to start fresh and move forward with your life. While the thought and financial difficulties of declaring bankruptcy may seem daunting, the process can be straightforward with the right guidance.
In this comprehensive guide, we’ll walk you through the steps of how to file for bankruptcy. Specifically, we’ll focus on the process of filing for bankruptcy in New Jersey, including the benefits of hiring a bankruptcy lawyer and common mistakes to avoid. Whether you’re considering Chapter 7 or Chapter 13 bankruptcy, this guide will provide you with the essential information and resources to navigate the filing process effectively.
Understanding Bankruptcy

Bankruptcy is a legal process that allows individuals or businesses to discharge their debts and start anew. There are different types of bankruptcy, but the most common types for individuals are Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is a liquidation bankruptcy that allows you to discharge most of your unsecured debts, such as credit card debt and medical bills. Chapter 13 bankruptcy is a reorganization under bankruptcy protection that allows you to repay your debts over a period of three to five years.
To be eligible to file for bankruptcy in New Jersey, you must meet certain requirements. 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 is below the median, you may be eligible to file for Chapter 7 bankruptcy. If your income is above the median, you may still be eligible based on your expenses and other factors. For Chapter 13 bankruptcy, you must have a regular source of income and your debts must be below certain amounts.
Steps to File for Bankruptcy in New Jersey
Filing for bankruptcy can be a complex process, so it’s important to seek the guidance of an experienced bankruptcy attorney. Here are the general steps to file for bankruptcy in New Jersey:
- Meeting with a bankruptcy attorney: Your attorney will review your financial situation and help you determine the best course of action.
- Gathering the necessary documents: You’ll need to gather documents such as tax returns, bank statements, and pay stubs.
- Completing the bankruptcy petition: Your attorney will help you fill out the bankruptcy petition, which includes information about your income, expenses, assets, and debts.
- Filing the petition with the bankruptcy court: Your attorney will file the petition with the bankruptcy court in your district.
- Attending the meeting of creditors: You’ll attend a meeting of creditors, where a trustee will review your case and ask you questions about your financial situation.
- Completion of bankruptcy proceedings: If your case is approved, you’ll complete the bankruptcy proceedings and receive a discharge of your debts.
Benefits of Filing for Bankruptcy in New Jersey

Filing for personal bankruptcy this can provide a number of benefits, including:
- Automatic stay: When you file for bankruptcy, an automatic stay goes into effect, which stops most collection actions against you, including lawsuits, wage garnishments, and foreclosure proceedings.
- Discharge of debts: Depending on the type of bankruptcy you file and your specific circumstances, you may be able to discharge most or all of your debts, allowing you to start fresh.
- Protection of assets: In many cases, bankruptcy exemptions allow you to protect certain assets, such as your home and car, from being sold to pay off your debts.
- Improved credit score: While bankruptcy can have a negative impact on your credit score, it can also provide a fresh start and an opportunity to rebuild your credit over time.
Alternatives to Filing for Bankruptcy
While filing bankruptcy often can be a powerful tool for debt relief, it’s not the right option for everyone. Here are some alternatives to filing for bankruptcy:
- Debt consolidation: This involves combining your debts into a single loan with a lower interest rate, making it easier to manage your payments.
- Debt settlement: This involves negotiating with your creditors to settle your debts for less than the full amount owed.
- Negotiation with creditors: You may be able to negotiate with your creditors to work out a payment plan or other arrangement that allows you to pay off your debts without filing for bankruptcy.
Common Mistakes to Avoid When Filing for Bankruptcy
When filing for bankruptcy, there are some common mistakes bankruptcy attorneys have to avoid, including:
- Failure to disclose all assets: It’s important to disclose all of your assets in your bankruptcy petition, as failing to do so can result in serious consequences.
- Running up debt before filing for bankruptcy: Incurring new debt before filing for bankruptcy can be seen as fraudulent, and can result in your debts not being discharged.
- Transferring assets before filing for bankruptcy: Transferring assets to a friend or family member before filing for bankruptcy can also be seen as fraudulent, and can result in your case being dismissed.
Conclusion
Filing for bankruptcy can be a difficult decision, but it can also be a powerful tool for debt relief. If you’re struggling with debt, it’s important to seek the guidance of an experienced bankruptcy attorney who can help you navigate the process to file bankruptcy, and achieve a fresh start. Don’t let debt consume you – there’s a way out.
Frequently Asked Questions

What is bankruptcy and why would I file for it in New Jersey?
Bankruptcy is a legal process that allows individuals or businesses to eliminate or repay their debts under the protection of the federal bankruptcy court. You may consider using bankruptcy relief by filing for bankruptcy in New Jersey if you are struggling to pay your bills and your debts have become overwhelming.
What are the types of bankruptcy available in New Jersey?
The two types of bankruptcy available in New Jersey are Chapter of bankruptcy forms. 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy involves liquidating your assets to pay off your debts, while Chapter 13 bankruptcy involves creating a repayment plan to pay off your debts over a period of time.
How do I qualify for Chapter 7 bankruptcy in New Jersey?
To qualify for Chapter 7 bankruptcy in New Jersey, you must pass a means test that evaluates your income, expenses, and debt. If your income is below the state median and you do not have enough disposable income to pay off your debts, you may be eligible for Chapter 7 bankruptcy.
How do I qualify for Chapter 13 bankruptcy in New Jersey?
To qualify for Chapter 13 bankruptcy in New Jersey, you must have a regular source of income and your unsecured debts must be less than $419,275 and your secured debts must be less than $1,257,850. You will also need to create a repayment plan that pays off your debts over a period of time.
What happens to my assets in a Chapter 7 bankruptcy in New Jersey?
In a Chapter 7 bankruptcy in New Jersey, your non-exempt assets will be sold to pay off your creditors. However, many assets are exempt under state and federal law, meaning you can keep them even if you file for bankruptcy.
Will filing for bankruptcy stop creditors from harassing me in New Jersey?
Yes, filing for bankruptcy in New Jersey will trigger an automatic stay, which stops creditors from taking any collection actions against you, including calling you, sending letters, or garnishing your wages.
How long does the bankruptcy process take in New Jersey?
The the bankruptcy filing process in New Jersey can take anywhere from a few months to several years, depending on the type of bankruptcy you file and the complexity of your case.
Will my credit score be affected if I file for bankruptcy in New Jersey?
Yes, filing for bankruptcy in New Jersey will negatively impact your credit score. However, it is possible to rebuild your credit over time by making timely payments and practicing good credit habits.
Can I file for bankruptcy on my own in New Jersey?
Yes, you can file for bankruptcy on your own in New Jersey, but it is highly recommended that you seek the assistance of an experienced bankruptcy attorney who can guide you through the process and ensure that your rights and personal property are protected.
What debts are not dischargeable in bankruptcy in New Jersey?
Some debts are not dischargeable in bankruptcy in New Jersey, including certain taxes, student loans, child support, and alimony, and debts incurred through fraud or intentional wrongdoing.
Glossary
- Bankruptcy: A legal process where an individual or business declares they cannot pay off their debts and their assets are liquidated to pay creditors.
- Chapter 7: A type of bankruptcy where assets are sold to pay off debts.
- Chapter 13: A type of bankruptcy where a payment plan is created to pay off debts.
- Debtor: A person or entity that owes money to another.
- Creditor: A person or entity that is owed money by another.
- Discharge: When a debtor is released from their obligation to pay certain debts.
- Exempt property: Property that is protected from being sold during bankruptcy.
- Liquidation: The process of selling assets to pay off debts.
- Automatic stay: A court order that stops creditors from collecting debt during bankruptcy.
- Means test: A test to determine if a debtor qualifies for Chapter 7 bankruptcy.
- Trustee: A person appointed by the court to oversee the bankruptcy process.
- Secured debt: Debt that is backed by collateral, such as a mortgage or car loan.
- Unsecured debt: Debt that is not backed by collateral, such as credit card debt.
- Petition: The legal document filed to start the bankruptcy process.
- Non-dischargeable debt: Debt that cannot be eliminated through bankruptcy, such as student loans or taxes.
- Reaffirmation agreement: An agreement to keep paying a debt that would otherwise be discharged in bankruptcy.
- Garnishment: A legal process where creditors can collect a debt by taking money from a debtor’s paycheck or bank account.
- Adversary proceeding: A lawsuit filed within a bankruptcy case, such as a challenge to dischargeability of debt.
- Bankruptcy estate: All assets and property that are subject to liquidation during bankruptcy.
- Credit counseling: A requirement to receive a bankruptcy discharge, where a debtor meets with a counselor to review their finances and create a budget.