What Type of Bankruptcy Is Right for You?
Understanding Chapter 7, 11, and 13 in New Jersey
If you’re overwhelmed by debt in New Jersey, you may be considering bankruptcy to get a fresh financial start. But not all bankruptcies are the same and choosing the wrong type can cost you time, money, and peace of mind.
At Simon Law Group, LLC, we guide individuals and business owners through Chapter 7, Chapter 11, and Chapter 13 bankruptcy with clarity and compassion. Here’s a breakdown to help you understand which path might be right for your unique situation.
Chapter 7 Bankruptcy – Liquidation
Best for: Individuals or couples with low income and unmanageable unsecured debt (like credit cards or medical bills).
Key Benefits:
Who qualifies:
In New Jersey, you must pass the Means Test, which compares your income to the state median for your household size. If your income is too high, Chapter 7 may not be an option.
What you may lose:
Some non-exempt property may be sold to pay creditors, but most people keep their home, car, and personal belongings under NJ exemption laws.
Ideal for:
Chapter 13 Bankruptcy – Reorganization
Best for: Individuals with regular income who want to keep their property while catching up on debts over time.
Key Benefits:
Who qualifies:
You must have enough income to make monthly payments toward your debt under a court-approved repayment plan. There are also debt limit caps, which are periodically adjusted under federal law.
What it does:
Chapter 13 allows you to repay past-due amounts on your mortgage, taxes, car loan, or other secured debt, and discharge some unsecured debt at the end of the plan.
Ideal for:
Chapter 11 Bankruptcy – Business or High-Income Reorganization
Best for: Businesses or high-net-worth individuals who need to reorganize debt without liquidating assets.
Key Benefits:
Who qualifies:
Any individual or entity with significant income or debt. There's also a special “Subchapter V” option for small businesses to make the process faster and more affordable.
What it does:
Chapter 11 provides a reorganization plan that creditors vote to approve. The plan may include reduced payments, debt forgiveness, or sale of assets over time.
Ideal for:
Choosing the Right Path in New Jersey
Every case is unique, and the right bankruptcy option depends on:
At Simon Law Group, we evaluate your full financial picture to determine the best route forward, whether that’s wiping the slate clean or reorganizing your debt in a way that protects your home, income, and dignity.
Ready for Relief? Talk to a New Jersey Bankruptcy Attorney Today
You don’t have to navigate bankruptcy alone. Whether you’re considering Chapter 7, 11, or 13, the experienced attorneys at Simon Law Group, LLC can help you take control of your financial future.
Call today 800-709-1131 or text 908-864-4450 to schedule a confidential consultation to find out which bankruptcy option is right for you. We serve individuals and businesses across Somerset, Hunterdon, Mercer, Morris, Middlesex, Warren Counties and beyond.