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.
Many New Jersey residents become overwhelmed by debt and decide to file for bankruptcy. However, knowing which form of bankruptcy to file can present a challenge. Significant differences exist between the two main chapters of bankruptcy filed by individuals -- Chapter 7 and Chapter 13.
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.