A Guide to Filing Chapter 7 Bankruptcy in New Jersey
Filing for Chapter 7 bankruptcy in New Jersey is a significant decision that can provide relief from overwhelming debt and a path toward financial recovery.
1/19/20253 min read


Filing for Chapter 7 bankruptcy in New Jersey can be a daunting process, but it can also provide a fresh start for individuals struggling with overwhelming debt. This guide will walk you through the essential steps, eligibility requirements, and considerations to help you navigate the process with confidence.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, often referred to as "liquidation bankruptcy," is designed to help individuals eliminate most of their unsecured debts, such as credit card balances, medical bills, and personal loans. In exchange, a court-appointed trustee may sell certain non-exempt assets to repay creditors. However, many people filing for Chapter 7 can keep most or all of their property due to state and federal exemptions.
Who Is Eligible to File Chapter 7 Bankruptcy in New Jersey?
To qualify for Chapter 7 bankruptcy, you must meet specific eligibility criteria:
Income Requirements: The means test determines if your income falls below the median income for a household of your size in New Jersey. As of 2025, the median income levels are:
$79,320 for a single-person household
$98,000 for a two-person household
Higher amounts for larger households
If your income exceeds the median, you may still qualify by completing the second part of the means test, which considers your disposable income after necessary expenses.
Previous Bankruptcy Filings: If you’ve filed for Chapter 7 in the past eight years or Chapter 13 in the past six years, you may not be eligible.
Credit Counseling: You must complete an approved credit counseling course within 180 days before filing.
Steps to Filing Chapter 7 Bankruptcy in New Jersey
Gather Necessary Documents: Collect financial records, including tax returns, pay stubs, bank statements, debt statements, and a list of your assets and liabilities.
Complete the Credit Counseling Requirement: Enroll in a court-approved credit counseling course. This step is mandatory and provides a certificate that must be submitted with your bankruptcy petition.
File Your Bankruptcy Petition: Submit the required forms to the New Jersey bankruptcy court. These forms include:
Bankruptcy Petition (Form B101)
Schedules of Assets and Liabilities
Statement of Financial Affairs
Filing fees for Chapter 7 are approximately $338, but fee waivers or payment plans may be available for those who qualify.
Attend the 341 Meeting: About 30 to 45 days after filing, you’ll attend a meeting of creditors, also known as a 341 meeting. Here, the trustee will review your case and ask questions about your financial situation. Creditors can also attend, though they rarely do.
Complete a Debtor Education Course: Before receiving your discharge, you must complete a second course on financial management. This ensures you understand how to avoid future financial difficulties.
Receive Your Discharge: If no objections arise, the court will issue a discharge order, typically within three to six months of filing. This order eliminates eligible debts and gives you a fresh financial start.
What Assets Can You Keep?
New Jersey allows you to choose between federal and state exemptions when filing for Chapter 7 bankruptcy. These exemptions protect certain assets from being sold by the trustee, including:
Homestead Exemption: Up to $27,900 of equity in your primary residence under federal exemptions.
Vehicle Exemption: Up to $4,450 in equity for one motor vehicle.
Personal Property Exemption: Includes household goods, clothing, and other items, up to $14,875 in total value.
Wildcard Exemption: Up to $1,475 in any property, plus up to $13,950 of unused homestead exemption.
Understanding these exemptions is crucial for protecting your assets. Consulting a bankruptcy attorney can help you determine which set of exemptions is more beneficial for your situation.
Pros and Cons of Filing Chapter 7 Bankruptcy
Pros:
Elimination of most unsecured debts
Protection from creditor harassment through the automatic stay
Relatively quick process (3-6 months)
Cons:
Potential loss of non-exempt assets
Negative impact on your credit score
Public record of bankruptcy filing
Hiring a Bankruptcy Attorney
While it’s possible to file Chapter 7 bankruptcy on your own, working with an experienced bankruptcy attorney can streamline the process. An attorney can help you:
Understand eligibility requirements
Accurately complete and file paperwork
Navigate complex legal issues
The cost of hiring an attorney varies but typically ranges between $1,000 and $2,500 for Chapter 7 cases. Many attorneys offer free consultations, allowing you to explore your options before committing.
Final Thoughts
Filing for Chapter 7 bankruptcy in New Jersey is a significant decision that can provide relief from overwhelming debt and a path toward financial recovery. By understanding the process, meeting eligibility requirements, and seeking professional guidance, you can take the first steps toward a brighter financial future. Remember, bankruptcy is not the end—it’s an opportunity for a fres
New Jersey Bankruptcy Law
Your trusted resource for expert bankruptcy guidance in New Jersey, serving Jersey City, Newark, Elizabeth, Paterson, Hoboken, and beyond. Offering personalized solutions for individuals and businesses, we specialize in Chapter 7, Chapter 13, and Chapter 11 bankruptcy, providing compassionate, affordable legal support to help you achieve financial freedom.
856-699-6668
jerseybankruptcylaw.com © 2024. All rights reserved.


info@jerseybankruptcylaw.com
Get a professional website and expert marketing with Marketing Web Pro Network. Boost your online presence and grow your business today!