When a New Jersey resident decides to file for bankruptcy, the next step is to determine what type of bankruptcy to file. Consumers most often file either Chapter 7 or Chapter 13. Both chapters have certain requirements, which often help make the decision of which to file for the consumer.
Since the United States Bankruptcy Code changed, not as many New Jersey residents qualify to file for Chapter 7 bankruptcy because they have disposable income, which is the money an individual has left after paying for necessities such as shelter, food and health care -- just to name a few. As an alternative, these individuals may file for Chapter 13 bankruptcy, which is a reorganization of a person's debts through a payment plan overseen by a trustee who works for the bankruptcy court. The benefits to filing a Chapter 13 bankruptcy are numerous.
No matter how much money a New Jersey resident makes, he or she can still be overwhelmed by debt. Many people believe that if a person earns a large salary, he or she does not have problems with debt. However, that can be far from the truth. Income level has little to do with the amount of debt a person may accumulate. For some, filing for Chapter 13 bankruptcy could help them pay off debt and achieve stability once again.