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Guide to Filing Bankruptcy in NJ

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Financial hardship can strike anyone, regardless of background or circumstance.  If you're struggling with overwhelming debt, you're not alone. Bankruptcy exists as a legal tool to provide a fresh start for individuals facing financial burdens.

While navigating the complexities of bankruptcy law can be daunting, seeking legal guidance can empower you to make informed decisions about your financial future. Here at Simon Law Group LLC, our team of knowledgeable New Jersey bankruptcy attorneys understands the challenges you face and is dedicated to helping you achieve a path towards financial relief.


Understanding Bankruptcy in NJ

To file for bankruptcy in New Jersey, you must have resided in the state for at least 180 days prior to the filing date. There are two main bankruptcy types that individuals in New Jersey might consider, Chapter 7 Bankruptcy and Chapter 13 Bankruptcy. 


Chapter 7 NJ Bankruptcy

Often referred to as "liquidation," Chapter 7 allows for the discharge of most eligible debts. This means the court erases your legal obligation to repay them. This option can be suitable for individuals with limited assets and high debt, who wouldn't be able to realistically repay their creditors through a Chapter 13 plan (see below).

To qualify for Chapter 7 bankruptcy in NJ, a means test compares your household income to the state's median, but exceeding it doesn't guarantee disqualification; consult an attorney for current eligibility details


Chapter 13 NJ Bankruptcy

This option focuses on creating a repayment plan to satisfy your creditors over a three-to-five-year period. Under Chapter 13, you propose a plan to repay all or a portion of your debts using your future income. This option can be beneficial if you have non-exempt assets you want to keep, or if you have steady income and want to catch up on missed payments.


Considering New Jersey Bankruptcy: Is it Right for You?

Financial hardship can manifest in many ways, but some common signs that bankruptcy might be a solution include:

  • Overwhelming Debt: Are you struggling to keep up with minimum payments on your debts, and your debt is steadily increasing?
  • Mounting Creditor Harassment: Are you constantly bombarded by calls and letters from creditors?
  • Difficulty Meeting Basic Needs: Is your debt preventing you from affording essentials like housing, food, and utilities?
  • Wage Garnishments: Have your wages been garnished by creditors?
  • Foreclosure Looming: Are you facing the possibility of losing your home due to mortgage delinquency?


New Jersey Bankruptcy Process

Filing for bankruptcy in New Jersey involves several key stages:

  • Credit Counseling: Completing a pre-filing credit counseling course is mandatory.
  • Preparation & Filing: This involves gathering financial documents, selecting the appropriate Chapter (7 or 13), and filing the necessary paperwork with the court.
  • Creditor Meeting: A court-appointed trustee will oversee a meeting where creditors can review your case and potentially raise objections.
  • Debt Discharge (Chapter 7) or Repayment Plan Confirmation (Chapter 13): Following the creditor meeting, the court will either discharge your eligible debts (Chapter 7) or confirm your repayment plan (Chapter 13).

While the overall process can take anywhere from 3-6 months on average, the exact timeframe can vary depending on the complexity of your case and potential New Jersey bankruptcy court backlogs. Consulting with a New Jersey bankruptcy attorney can provide a more accurate estimate for your specific situation.


New Jersey Bankruptcy Downsides to Consider

Filing for bankruptcy isn't a decision to take lightly. Here are some potential drawbacks to consider:

  • Credit Score Hit: Bankruptcy will significantly lower your credit score. While the exact impact varies, it can typically drop by 150 to 200 points or more. Rebuilding your credit score can take several years, requiring responsible credit management practices.
  • Loss of Assets (Chapter 7): While New Jersey exemptions safeguard certain assets, Chapter 7 might require the sale (liquidation) of some non-exempt assets to pay creditors. This could include a second vehicle, luxury items, or a portion of the equity in your home exceeding the exemption limit.


Post Bankruptcy Life in New Jersey

There are limitations on filing for subsequent bankruptcies in New Jersey. Generally, you'll need to wait a certain period before being eligible to file again, depending on the Chapter you filed under. However, the focus should be on moving forward and rebuilding your credit after your NJ bankruptcy. Rebuild your credit by securing a credit card for beginners, making on-time payments on all accounts, and potentially becoming an authorized user on a loved one's card with good credit.


Advantages of  Working with a NJ Bankruptcy Attorney

The complexities of New Jersey bankruptcy law can be daunting. A knowledgeable and seasoned NJ bankruptcy attorney from Simon Law Group LLC can be your invaluable partner throughout the process. These are just a few of the highlighted benefits of working with a bankruptcy attorney to file NJ bankruptcy.

  • Bankruptcy Eligibility & Chapter Selection: Our bankruptcy attorneys can analyze your financial situation and accurately determine if you qualify for Chapter 7 or Chapter 13 NJ bankruptcy.
  • Maximizing Exemptions: NJ bankruptcy exemptions protect certain assets from liquidation. Our qualified attorneys can ensure you understand these exemptions and how to leverage them to your advantage.
  • Negotiating with Creditors: When dealing with creditors, having an attorney represent you can be crucial. They can negotiate for more favorable repayment terms (Chapter 13) or minimize the amount of debt discharged (Chapter 7).
  • Efficient Process & Peace of Mind: NJ bankruptcy involves complex legal procedures and strict deadlines. Our attorneys can guide you through every step, ensuring all paperwork is filed correctly and on time, minimizing delays and maximizing your chances of a successful outcome.

At Simon Law Group LLC, our team of qualified New Jersey bankruptcy attorneys understands the challenges you face. We are dedicated to helping you navigate the legal complexities of bankruptcy and achieve a path towards financial relief. Schedule a consultation today to discuss your specific situation and explore your options.