Chapter 7 Bankruptcy
In recent years, the economy has been incredibly unstable, which means more and more people have had to file for bankruptcy. In New Jersey, you may be able to file Chapter 7 bankruptcy if you are eligible according to the state’s means test. In order to qualify for Chapter 7 bankruptcy, your income must fall below the median income. If you are eligible for this type of bankruptcy, you can expect most debts to be discharged, and creditor harassment to end.
New Jersey Means Test
The New Jersey Means test must be taken by any individual interested in filing Chapter 7 bankruptcy. If your median income is less than average, you automatically pass the test. If you are a higher income filer, you must take the means test. The means test is used to determine whether a filer should file Chapter 7 or Chapter 13 bankruptcy. With Chapter 13 bankruptcy, you will be required to pay back some of the debt you have accrued.
Chapter 7 Debt Discharge
When you file Chapter 7 bankruptcy in New Jersey, you can expect to have most of your debt discharged. Exemptions to discharging debt are if the money you owe is not primarily consumer debts. Another exception that can be made is if you are a disabled veteran who incurred most of their debt while performing duties for homeland defense.
Under Chapter 7 bankruptcy law in New Jersey, debt will not be discharged if it was accrued through fraud, if it was not on bankruptcy schedule when it was filed, or if money was embezzled. Chapter 7 bankruptcy is also not applicable for corporations. In New Jersey, only individuals can file for this type of bankruptcy. You also cannot file if:
You last filed Chapter 7 within the last 8 years
You last filed Chapter 13 within the last 6 years
You try to hide or destroy financial records
Make false claims regarding debt
The one great thing about Chapter 7 bankruptcy is that it stops creditor harassment. Under New Jersey law 524, a discharge order acts as a court junction. If a creditor tries to pursue a discharged debt, the court can hold the creditor in contempt.
Chapter 7 Bankruptcy Attorney
If you are considering filing for bankruptcy, it is important to consult with an attorney right away. It’s important to weigh all your options because Chapter 7 bankruptcy is not right for everyone. Instead, this type of bankruptcy is only appropriate for debtors who are not trying to maintain any property including a house and mortgage after the bankruptcy is complete. Filing for Chapter 7 also doesn’t stop foreclosures, but it may give you some time to save your home. If you are interested in keeping any of your possessions and your home is not in foreclosure, filing Chapter 13 may be a better option for you.
Contact the law office of John L. Schettino to determine whether filing Chapter 7 is right for you. Mr. Schettino will go over eligibility, discharging debt, and what to do about creditor harassment. Call today to schedule your consultation.