How to Choose the Right Bankruptcy for Your Specific Situation in NJ

One of the largest differences between Chapter 7 and Chapter 13 bankruptcy is that, with Chapter 7, most of your debts are discharged.

Under Chapter 13, you get to live in the same way you’ve become accustomed to (for example, keeping your house and vehicles) and you pay back your debt over a longer period of time.

Depending on your preferences, both of these options might look like a solid choice. So, how do you know which one is right for you?

Enter the Means Test

The Bankruptcy Court uses the Means Test to determine whether or not your income is too high for the Chapter 7 threshold. There are many variables to this calculation.

The specific details are complex, but essentially, the test determines if your income is higher than the average income for people living in your state.

If your income is determined to be too high for Chapter 7, you may have to file for Chapter 13 protection instead – still having to pay down your debts but at a slower rate.

Beware the Means Test — Knowing Which Bankruptcy is Right for You

There are income limits for filing each chapter and the Means Test will tell you which bankruptcy chapter you are eligible for. But you shouldn’t rely solely on the Means Test to make your decision.

The “right” bankruptcy depends on your specific situation. In other words, just because you qualify for a Chapter 7, that doesn’t always mean you should file for it.

The smartest thing you can do is discuss your options with an experienced consumer bankruptcy attorney. They’ll use their expertise to examine your finances and decide the best course of action for your unique situation. 

Contact a Cherry Hill Bankruptcy Attorney for Your Consultation in Central & South Jersey

If you’re struggling with debt, you may need a fresh start financially. An experienced bankruptcy and debt relief attorney can help you explore your options and determine the best course of action for you, your family, and/or your business.

The experienced New Jersey bankruptcy lawyers at The Law Office of Joel R. Spivack understand the nuances of NJ and federal bankruptcy laws, so we can help you protect your interests.

Call 856-488-1200 or fill out our online contact form to schedule a confidential consultation. We have an office conveniently located in Cherry Hill, NJ.

We are here to help you.

Is this a New Jersey matter or Philadelphia Region matter?
We are licensed to practice in New Jersey and Pennsylvania.

Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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