Debt is often overwhelming and frightening, especially if you are not sure how to recover. There are several possible paths that may help you overcome debt and return to financial stability, and one of them is filing for Chapter 7 bankruptcy. Understanding the essentials of Chapter 7 and how to file for it in New Jersey may help you determine whether it is the best option for your circumstances.
The United States Bankruptcy Court provides a guide for filing a Chapter 7 case in New Jersey. According to the guide, one of the first requirements is to attend credit counseling with an approved agency. You must include a certificate of completion along with your bankruptcy petition. There are a few possible exemptions to this requirement. For example, you may not have to complete counseling if you are on active duty in a military combat zone.
There are some basic rules and restrictions related to filing for this type of bankruptcy. For example, your monthly income must be lower than New Jersey's median income. The court where you must file the petition depends on the county you live in. There is also a fee of $299 for filing this petition, and you must turn in an original and a copy of all required forms.
The U.S. Bankruptcy Court's guide states that Chapter 7 bankruptcy is essentially a liquidation process. A court may name a trustee to manage a debtor's estate and distribute funds to creditors after converting assets to cash. One of the potential benefits of Chapter 7 is that it may release you from having personal liability for certain debts. In some cases, filing for Chapter 7 may also stop collections agencies from pursuing you.
This is general information on Chapter 7 bankruptcy that is intended for educational purposes. It should not be interpreted as legal advice.