Filing for bankruptcy in New Jersey is never an easy decision to make. Many people who consider themselves with overwhelming debt, often consider filing bankruptcy as an option. Many people don’t want to file for bankruptcy in New Jersey because they fear that if they file for bankruptcy, their credit will be ruined forever. Fortunately, this is not the case.
Many people who file for bankruptcy are able to get their debt wiped away and are able to start over. There is a big misconception that people who file for bankruptcy will never get credit again. Many people who file bankruptcy in New Jersey are able to rebuild their credit and have perfect credit within two years of filing for bankruptcy.
When Should I Consider Filing Bankruptcy in New Jersey?
Many people in New Jersey often wonder when they should consider filing for bankruptcy or asking a professional for help. Bankruptcy is a good option to consider when a person’s debt exceeds their monthly income. When an individual is choosing between paying rent or putting food on the table or paying credit card bills, it is usually a good idea to start considering filing for bankruptcy.
There are two chapter of bankruptcy that people in New Jersey can consider when they are dealing with overwhelming debt. Chapter 7 bankruptcy is helpful when individuals have little to no assets and want to wipe away their debt. This is the shortest chapter of bankruptcy and usually takes about 4 months to complete.
Chapter 13 bankruptcy is the other chapter of personal bankruptcy that people in New Jersey can consider. Chapter 13 bankruptcy is usually the best chapter for individuals who have high income and assets that they want to keep. In a Chapter 13 bankruptcy, the individual will have to pay back a portion of their debt over 3-5 years.
Can I keep A Credit Cards If I file for Bankruptcy in 2023?
Unfortunately, no. The bankruptcy courts in New Jersey, will usually not allow a person filing bankruptcy to keep a credit card. However, most credit card companies are willing to extend credit to people who have filed for bankruptcy. Many people are shocked to learn that credit card companies want to extend credit to people that have filed for bankruptcy in New Jersey.
When a credit card company decides if they want to extend a line of credit, they will often pull a credit report. One of the factors in determining how much credit will be extended is based on an individual’s debt to income ratio. The more debt that someone has, the less likely a lender will be willing to extend a line of credit. Individual’s that file bankruptcy often have no debt and are therefore, in a better position than someone who has debt and wants a line of credit.
What Debts Can be Eliminated in Bankruptcy in 2023?
Many individuals are unsure what debts can be included when they file for bankruptcy in New Jersey. Unfortunately, not every single type of debt can be included within a bankruptcy. The most common debts that can be included are:
- Credit Card Debts
- Personal Loan Debt
- Medical Debt
- Some Tax Debt
- Some Toll Debt
- Some Student Loan Debt
- College Tuition Debt
- Vehicle Repossession Debt
- Business Debt
How Much Does a Bankruptcy Cost in New Jersey in 2023?
One of the biggest concerns that individuals have when filing for bankruptcy is how they will pay to file for bankruptcy. Most people who file bankruptcy usually afford the fees by stopping payments on their credit cards and using those fees to pay for a bankruptcy. The filing fee to file a bankruptcy in New Jersey is $338.00. Moreover, there are two credit counseling courses that have to be taken. One course is taken before filing the bankruptcy and another course is taken after filing bankruptcy. These courses are anywhere from $10-$50 per course.
Individuals should also plan to factor in the cost of hiring a lawyer in New Jersey to help them file bankruptcy. Typically, a Chapter 7 lawyer can range anywhere around $2,000. While a Chapter 13 bankruptcy, could range anywhere from $3,000 and up.
If I File Bankruptcy in 2023 Will My Spouse be Impacted?
Many people who are considering filing for bankruptcy in New Jersey, often wonder whether or not their spouse will be impacted if they file. Spouses do not have to file for bankruptcy together. This means that one spouse can choose to file without it having an impact on the other spouse’s credit report. Typically, the court will look at household income to determine if each spouse can file for bankruptcy. This, however, does not mean that just because a spouse is married, they have to file for bankruptcy together.
Will I lose My House or Car If I File for Bankruptcy in New Jersey in 2023?
One of the biggest concerns that people contemplating bankruptcy often face are whether they will lose their vehicle or house if they file for bankruptcy. Luckily, not everyone who files for bankruptcy has to give up their assets. Bankruptcy Exemptions in New Jersey allow individuals to file for bankruptcy and keep their property.
An exemption means that property does not become part of the bankruptcy estate and cannot be used to pay back creditors. If the exemption is not enough to cover the entire value of the property, it may be sold to pay off some of the debt. Many people who file bankruptcy in New Jersey don’t lose their property.
In New Jersey, there are two sets of exemptions that individuals can choose from: the federal exemptions or the state exemptions. Choosing whether an individual should use the state exemption or federal exemption is vital for purposes of keeping their property safe from creditors. It is important to note that both Federal and State Exemptions change periodically so it is important to stay up to date.
Can I Keep my Real Property if I File Bankruptcy? What is The homestead exemption in New Jersey?
A homestead exemption is what homeowners in New Jersey use to protect any equity in their house or mobile home. New Jersey, however, does not have any homestead exemption. This means that individuals who want to protect any home will need to use the personal property exemption.
Individual’s that own property in New Jersey and have equity in their homes that they want to protect during bankruptcy will have to consider using the federal exemptions, which offer a homestead exemption of $27,900 in real property (which married couples can double.) This also includes mobile homes and co-ops, or burial plots plus the unused portion of the Wildcard exemption up to $13,950 can be used for other property of any kind.
Individuals who are unsure about which exemptions they should use to protect their home from creditors, should consider hiring a New Jersey bankruptcy attorney to help them.
What is the Vehicle Exemption in New Jersey if I choose to File for Bankruptcy in 2023?
Many people that file for bankruptcy in New Jersey are able to get rid of their debt and still keep their vehicle safe from creditors. Individuals who are looking to file bankruptcy and want to keep their cars, will need to determine if the equity in their car falls under a Bankruptcy Exemption. New Jersey does not allow individuals a vehicle exemption. Individuals who want to protect their vehicles will need to use the Federal Exemptions to protect any equity in their car. Under the Federal Exemptions, individuals in New Jersey can exempt up to $4,450.00 of equity plus the unused portion of the Wildcard Exemption up to $13,950 can be used to protect equity in their vehicles.
Can Filing for Bankruptcy in 2023 Stop a Vehicle from Being Repossessed?
During the Covid Pandemic vehicles were selling at extremely high prices. Unfortunately, many people took out high vehicle loans that they now, cannot afford to repay. Individuals who have found themselves in this situation are not alone. With the high cost of inflation in New Jersey, many people are struggling to pay these high car loans. Filing for bankruptcy gives individuals options to deal with their car loans. Individual’s facing a vehicle repossession can file for bankruptcy to get more time to pay back their car loans or return the vehicle to the lender without remaining responsible for the outstanding loan.
In a Chapter 7 bankruptcy, the individual has the option to give back the vehicle to the lender. If the individual chooses to give back the vehicle, they can wipe their debt away and not worry about the lender suing them. This can help individual’s clear up high payments that they no longer can afford.
In a Chapter 13 bankruptcy, individuals can repay the outstanding loan over a 3–5-year period. This can allow individuals to get caught up on their vehicle arrears. When individuals file Chapter 13 bankruptcy in New Jersey, then can keep their car and pay back the money they owe.
It is important to note that once creditor repossesses a vehicle in New Jersey, individual’s must act quickly if they want to get their vehicle back. Typically, they have to file bankruptcy before the lender sells the car.
What are the Most Common Reasons People File Bankruptcy in 2023?
Many people are scared to file for bankruptcy because they fear that filing for bankruptcy means that their life is over. However, bankruptcy laws were enacted to help people get a fresh start. Filing for bankruptcy in New Jersey stops harassing debt collectors and allows people to start over. New Jersey is one of the most expensive states to live in. With the high costs of living and many people losing their jobs, many people in New Jersey simply can’t afford their credit card debt.
Some of the most common reasons that individuals file bankruptcy is because of:
- Medical Debt
- Divorce
- Failed Business Debt
- Inflation
- High Cost of Living in New Jersey
Individuals who have found themselves in these situations are not alone. Unfortunately, individuals can try to plan things out in their life as much as possible. However, sometimes life throws a curveball.
Can Filing Bankruptcy in New Jersey Stop a Wage Garnishment?
Another reason individuals consider bankruptcy in New Jersey is because they are facing a wage garnishment. A wage garnishment happens when a creditor goes to court in New Jersey and sues an individual for a debt. If the creditor gets a judgment, then the creditor can garnish the person’s wages and levy their bank account.
When an individual files for bankruptcy in New Jersey an automatic stay goes into place. The Automatic Stay stops creditors from garnishing a person’s wages. As soon as a bankruptcy petition is filed, the automatic stay goes into effect and the garnishment will cease.
This can be helpful for individuals who can’t afford to live because their wages are being garnished.
Hiring a New Jersey Bankruptcy Lawyer in 2023
Hiring a skillful bankruptcy attorney in New Jersey can make a difference. A bankruptcy lawyer can help you determine what exemptions are available and can help determine if bankruptcy is the right decision. Karra L. Kingston Esq. has helped many individuals get a fresh start. Karra Kingston understands that filing bankruptcy is not an easy decision. She will hold your hand through the whole process so that you feel comfortable. Call today for a free bankruptcy consultation.