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bankruptcy, bankruptcy in NJ, chapter 7

What to Expect When You're Expecting a Chapter 7 Bankruptcy

On Behalf of Veitengruber Law | Feb 23,2021

Chapter 7 bankruptcy is for those who have personal debts and expenses in excess of their income and assets. It is the quickest and least expensive bankruptcy proceeding. Those who qualify can receive a complete discharge of eligible debts. In order to determine if Chapter 7 bankruptcy is the right choice for you, we've compiled a few of the most frequently asked questions on the topic. "Do I qualify for Chapter 7 bankruptcy?" In order to qualify for Chapter 7 bankruptcy in New Jersey, you need to pass the NJ Means Test. You will need to provide records of the last six months of your total income and determine your average monthly income. If your income is less than the median monthly income in NJ, you will qualify for Chapter 7 bankruptcy. If your income exceeds the median monthly income in NJ, you will need to provide evidence that there are extenuating circumstances that make your Chapter 7 case legitimate. One example would be extraordinary medical debt. Keep in mind that in a Chapter 7 bankruptcy, your assets with equity can be used to pay off your creditors. So, even if you do not have income to exceed the state median, you need to consider if filing for Chapter 7 is worth potentially losing valuable assets. If this is a concern, you may need to consider filing for Chapter 11 or Chapter 13 instead. "Will all of my debts be eliminated?" In bankruptcy, your debts are either dischargeable or non-dischargeable. You are not required to pay back dischargeable debts and your creditors are no longer allowed to ask for payment on these debts. You will still be responsible for paying off non-dischargeable debts. Under Chapter 7 bankruptcy law, the majority of unsecured debts are dischargeable. "Unsecured" debt is any debt incurred with no collateral, like credit cards and medical debt. Non-dischargeable debts will include child or spousal support, student loans, taxes, and legal fees. If the majority of your debt is dischargeable, Chapter 7 is likely the right path for you. But if most of your debt is non-dischargeable, there may be a better way to resolve your debts. Your NJ debt resolution attorney can help you make the best decision for your unique circumstances. "Can I keep my property?" A Chapter 7 bankruptcy filing will allow you to retain personal property, but what property you are allowed to keep depends on the specific exemptions you are taking. In New Jersey you can use either state or federal exemptions. Exempt property can include real estate, furniture, vehicles, business equipment, and personal items like jewelry. Non-exempt property can be sold to pay off your debts with your creditors. Veitengruber Law is experienced in bankruptcy law. We can help you determine if you qualify for Chapter 7 and how Chapter 7 will impact your property and financial standing.

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