An Overview of New Jersey Bankruptcy
The median household income in New Jersey is well above the national median. Along with the higher income levels, New Jersey residents must contend with high costs of living, housing prices, and tax rates. According to CNBC, New Jersey is currently the 10th most expensive state in which to live. With all of the financial pressure that comes with living in New Jersey, it is understandable that many New Jersey residents face financial challenges, including bankruptcy. If you are considering filing for bankruptcy in New Jersey, it is wise to have a basic understanding of New Jersey’s bankruptcy law.
Who can File for Bankruptcy in New Jersey?
In order to file for bankruptcy in New Jersey, a debtor must have resided in New Jersey or had his or her principal place of business in New Jersey for at least the past 180 days. It is possible for individuals who just moved to New Jersey to meet the requirement after living in New Jersey for 91 days. However, new residents of New Jersey may have to apply for exemptions according to the laws of the state of their previous residence.
What are the Financial Requirements for Filing for Bankruptcy in New Jersey?
Individuals or married couples must qualify for bankruptcy financially. Debtors whose income falls below New Jersey’s median income typically qualify for Chapter 7 bankruptcy. The bankruptcy court will use a means test to determine whether or not the debtor can afford to make his or her creditors partial payments. New Jersey debtors who do not qualify financially for Chapter 7 bankruptcy because of the means test may be qualified to file for Chapter 13 bankruptcy.
What Property can New Jersey Debtors Keep During a Bankruptcy?
Bankruptcy exemptions allow debtors to protect some of their personal property from being sold by the bankruptcy courts to pay off debt. New Jersey debtors can choose to take federal exemptions or New Jersey exemptions. Federal law allows debtors to take a homestead exception of $23,675 of equity from their principal place of residence. New Jersey does not allow a homestead exemption. Currently, married couples can take a $47,530 in federal homestead exemptions.
Further, under New Jersey law, creditors have the right to only 75% of the earnings of the debtor if the debtor’s income is below 250% of New Jersey’s poverty line. Under federal exemption guidelines, any income that the debtor has earned but not received becomes part of their estate for the purposes of bankruptcy.
Our New Jersey Bankruptcy Attorneys can Help
At Georgette Miller & Associates, our New Jersey bankruptcy attorneys are deeply experienced in bankruptcy law. We can help you determine the most advantageous bankruptcy plan. With offices in New Jersey, New York, and Philadelphia, we have helped many clients through the bankruptcy process. Call 1-866-96-GMLAW or contact us online and start your path to financial freedom.