Bankruptcy in New Jersey
Are mounting bills and constant collection calls making it hard to move forward?
Filing for bankruptcy can help you stop wage garnishments, prevent foreclosure, and wipe out certain debts. New Jersey also offers important legal exemptions that can protect your home, car, and personal property during the process.
Every case depends on your income, assets, and goals—and New Jersey’s state-specific laws can directly affect what you’re able to keep. Without proper legal guidance, you could miss opportunities to protect yourself.
We connect New Jersey residents with experienced bankruptcy attorneys who understand the process from start to finish. If you’re ready to find real financial relief, we can help you take the first step today.
Types of Bankruptcy in New Jersey
Bankruptcy is a legal process designed to help individuals and businesses wipe out or restructure their debts when repayment is no longer realistic. In NJ, you’ll need to show that you’re facing a genuine financial hardship—something that keeps you from staying current on your obligations.
Bankruptcy can eliminate a large portion of what you owe, but not every debt qualifies. Obligations like child support, back taxes, alimony, and most student loans survive the process.
If you’re falling behind and can’t see a way out, bankruptcy may be a viable path forward. Depending on your situation, you could file under Chapter 7, Chapter 11, or Chapter 13. Each chapter offers different types of relief and comes with eligibility requirements.
In New Jersey, bankruptcy cases are handled by the U.S. Bankruptcy Court for the District of New Jersey. Court locations include Newark, Trenton, and Camden, depending on where you live in the state.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy can offer a clean slate for those overwhelmed by debt, but it’s not a decision to take lightly. Before moving forward, you’ll want to take a close look at your income, assets, and overall financial situation. Filing under Chapter 7 may be the right solution if repayment isn’t realistic, but it’s smart to speak with a bankruptcy attorney in New Jersey to review your case.
Most individuals who qualify for Chapter 7 have limited income or have gone through a major financial disruption, like a job loss or medical crisis. While Chapter 7 can discharge many unsecured debts, the tradeoff is that you may have to surrender assets.
Once you file, the automatic stay goes into effect, immediately pausing most collection actions like foreclosures and wage garnishments.
Before you can file for Chapter 7 bankruptcy in New Jersey, you’ll need to pass the means test, which measures your income against the state’s median level. As of the latest figures, the median income for a single filer in New Jersey is around $84,300.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy tends to be more complicated than other types and is most often used by businesses or individuals with larger, more complex financial situations. Instead of eliminating debts outright or forcing the sale of assets, Chapter 11 gives you the chance to reorganize what you owe under a structured repayment plan. That plan usually stretches over four to eighteen months, giving you time to negotiate new terms with creditors.
Filing for Chapter 11 bankruptcy requires putting together a full and detailed financial picture for the court and your creditors to review. You’ll need to disclose everything—your assets, debts, income, expenses, and your plan for reorganizing what you owe.
Key forms you’ll need to submit include:
- Voluntary Petition for Individuals Filing for Bankruptcy (Form B101)
- Summary of Assets and Liabilities (Form B106)
- Schedules A/B through J (covering real and personal property, debts, income, and expenses)
- Statement of Financial Affairs (Form B107)
- Chapter 11 Statement of Current Monthly Income (Form B122B)
- Creditor Matrix (list of all creditors with addresses)
- Schedule of Executory Contracts and Unexpired Leases (Form B106G)
- Proposed Disclosure Statement and Reorganization Plan
Chapter 13 Bankruptcy
Chapter 13 bankruptcy—commonly called the wage earner’s plan—is built for individuals with steady income who need time to catch up on their debts. In NJ, once you file, the court will appoint a trustee to review your income, debts, and assets to help structure a repayment plan. You’ll commit to a three- to five-year repayment schedule based on what you can realistically afford.
Chapter 13 takes a different path compared to other types of bankruptcy by focusing on repayment rather than liquidation. Instead of selling off your assets to satisfy creditors, you create a court-approved plan to pay back your debts. A trustee is appointed to oversee your case, collect your monthly payments, and distribute the money to your creditors.
Chapter 13 is designed for people with steady, predictable income. It’s a much simpler and more affordable process that gives individuals the breathing room they need to reorganize without losing everything. As long as you stick to the repayment plan, you’ll also have the opportunity to discharge certain debts.
The Bankruptcy Process in New Jersey
There’s no perfect moment to file for bankruptcy—but if you know you won’t be able to pay off your debts within the next five years, it may be the smartest move. Filing can help you limit further financial damage and create a structured way to rebuild your credit and future stability.
In New Jersey, the process starts by gathering a complete set of your financial records. This includes details like your monthly expenses, outstanding debts, total assets, and yearly income. The court will use this information to evaluate your case and determine the right course of action. If anything is missing or inaccurate, your filing could be delayed—or worse, denied altogether.
In New Jersey, residents filing for bankruptcy must use the state’s exemption system to protect certain property from being seized. These exemptions can make a major difference in what you can keep.
New Jersey exemptions include:
- Homestead: No specific homestead exemption under state law; federal exemptions may apply
- Motor vehicle: No standalone exemption; can use wildcard or personal property exemptions
- Personal property: Exemptions for household goods, clothing, and furniture up to reasonable value
- Wildcard exemption: Up to $1,000 to apply toward any property (if using state exemptions)
- Wages: A portion of earned but unpaid wages is protected
- Public benefits: Fully exempt, including Social Security, unemployment, and disability benefits
- Retirement accounts: Most tax-qualified pensions and IRAs are fully protected
Work With an Experienced New Jersey Lawyer
New Jersey’s specific exemption laws can help you protect important assets like your home, vehicle, and retirement accounts, but successfully navigating the process requires careful planning. Filing without experienced legal guidance can lead to costly mistakes or missed opportunities.
Submit a request online or call us today at (866) 345-6784 to speak with an experienced lawyer in your area!
About the Author
Aaron is a professional legal writer with a B.S. in English Education from Southern Illinois University – Carbondale. He has written, published, and edited thousands of legal articles for RequestLegalHelp, which has connected over 5 million people to legal help in the United States.
With over five years of experience writing thousands of legal articles for law firms across the U.S. and Canada, Aaron specializes in covering federal, state, and city-level legal issues ranging from auto accidents to wrongful terminations.
Do you have a different legal concern that requires the help of a lawyer? We have a network of attorneys for any area of the law you need in New Jersey.
