Written by the Upsolve Team.
Updated September 30, 2020
The American Dream isn’t a guarantee. Sometimes, no matter how hard you work, how dedicated and responsible you are and how hard you try to get ahead, life just doesn’t cooperate. If you’re currently struggling to make payments on overwhelming debt while keeping food on your family’s table, you aren’t the only one. Since the Great Recession of 2008, Americans have come to understand that almost everyone, no matter how hardworking or responsible, is one natural disaster, job loss, injury, illness, loss of a loved one or other major life event away from not being able to make ends meet. One of the only positive things that has been born out of this understanding is that the process of filing for bankruptcy has lost most of its stigma. If you need a fresh financial start, filing bankruptcy in Newark may be a great option for you. New Jersey bankruptcy isn’t the best option for every financially challenging circumstance. But for those who qualify and for those whose financial situation could benefit from either the elimination of debt in as few as 90 days or following a 5-year repayment plan, bankruptcy is an option worth considering.
The kind of Newark bankruptcy that may work best for your family will depend on the kinds of debt you’re wrestling with, the kind of property you own and whether you do or don’t earn much income. If you’re eligible to file for bankruptcy under Chapter 7, this is likely going to be your best option because it doesn’t require to pay your creditors back over 5 years the way that Chapter 13 bankruptcy does. Instead, the Court erases eligible debts within a few short months. Not everyone qualifies for Chapter 7 bankruptcy, though. Only those who don’t earn much income are generally eligible for this kind of bankruptcy protection.
Newark Bankruptcy Lawyers – Estimated Cost
One of the questions that filing bankruptcy in Newark understandably inspires is “How much does a Newark bankruptcy lawyer cost?” However, you may be asking the wrong question. Before you wonder about the cost of a bankruptcy lawyer, you should consider whether you need to hire bankruptcy assistance in Newark in the first place. Lawyers in Newark charge anywhere from $965 - $1,550 to help filers with a Chapter 7 bankruptcy case. However, the Chapter 7 process is so straightforward that you can file for bankruptcy yourself unless your finances are particularly complex. If you would prefer to hire an attorney to help you, that is perfectly fine. But it’s important to know that you can save money by filing for bankruptcy yourself. You’d probably be shocked to learn just how many people do this in the U.S. every day!
How to File Bankruptcy in Newark, New Jersey for Free
If filing for Chapter 7 bankruptcy in Newark sounds like it might be a great solution to your current financial challenges, consider the following information concerning how the New Jersey bankruptcy process works. Once you better understand what to expect, you’ll be in a better position to make an informed decision about whether to file for bankruptcy or not.
Collect Your Newark Bankruptcy Documents
When you’re filing bankruptcy in Newark, the Court is going to ask you repeatedly about four aspects of your finances: what you earn, how you spend what you earn, what/who you owe and what you own. As a result, you want to have financial documents handy that will give you accurate answers to these questions. Filing for Chapter 7 bankruptcy in Newark involves completing many forms. By gathering reference documents before you start digging into these forms, you not only ensure that your answers are going to be accurate, you ensure that the task of filling out your forms will take as little time as possible. In general, you’re going to want to have recent bank statements, tax returns, a copy of your current credit report and recent pay stubs on hand.
Take Credit Counseling
You may understandably be under the impression that the only thing filing for Chapter 7 bankruptcy in Newark entails is filling out paperwork. In fact, the Court also requires you to have a meeting with your Trustee (more on that later) and to take two educational courses. You’ll take the second course after you have filed your paperwork with the Court. But the first course must be taken during the six months before you file your petition with the Court. Don’t submit your Newark bankruptcy forms until you have taken a credit counseling course that has been approved by the Department of Justice for residents of New Jersey.
Complete the Bankruptcy Forms
When researching how to file bankruptcy in Newark, you may feel frustrated or anxious after learning about the number of forms you need to fill out. This is understandable. Bankruptcy is a legal process and you need to take the paperwork “side” of things seriously. However, it’s important to familiarize yourself with this process before you give up or spend money having an attorney completing these forms on your behalf. Filing for Chapter 7 bankruptcy in Newark is a very straightforward process. Your primary concerns will be following directions closely and making sure that your forms are both accurate and complete before you turn them in. If you feel comfortable committing to those two golden rules, you should do just fine.
Get Your Filing Fee
Filing bankruptcy in Newark under Chapter 7 generally requires that applicants pay a filing fee of $335. However, not everyone ends up paying that fee and even fewer applicants pay the full amount due all at once. The Court recognizes that this fee is steep enough to cause many families real hardship. As a result, if you live below 150% of the poverty line, it will usually grant a filer’s request for a fee waiver, if it’s clear that even filing bankruptcy won’t make paying this fee any easier. When filers make too much money to qualify for a waiver, they can ask the Court for permission to pay the full amount due in installments after filing bankruptcy in Newark.
Print Your Bankruptcy Forms
If you’re like most American families and you no longer have a printer at home, you may be dismayed to learn that you can’t file for Newark bankruptcy online. The Court remains significantly behind the times and requires filers to submit physical forms either in person or by mail. Thankfully, there are places you can go to print out your bankruptcy paperwork. Before you go to a commercial service printer (like Kinkos) or you stop by one of the local branches of theNewark Public Library, make sure to decide if you’re going to print blank forms or completed forms. You can either handwrite your answers on blank forms or print completed fillable PDF documents saved on a thumb drive. Your paperwork contains sensitive information, so if you print completed forms, don’t leave them lying around anywhere in public.
Go to Court to File Your Forms
Newark sometimes suffers from a questionable reputation. But from Turtle Back Zoo to Branch Brook Park, locals understand that Newark has a lot to offer its residents. One of the many advantages of living in Newark is that you don’t have to leave the city to file your New Jersey bankruptcy paperwork. Many people who live in remote areas of the country choose to file bankruptcy paperwork by mail. However, going to the courthouse at 150 Walnut Street in the Martin Luther King, Jr. Federal Building offers significant advantages. So many people file for bankruptcy that filing bankruptcy in Newark in person will help to guarantee that your case is processed as quickly as possible, as there can be delays with cases filed by mail. Also, you can have the clerk stamp an extra set of paperwork for your records, which can come in handy down the road.
Mail Documents to Your Trustee
It isn’t practical for a judge to oversee every aspect of your bankruptcy case. So, when you file for Chapter 7 bankruptcy in Newark, the Court will appoint someone commonly referred to as a Trustee to oversee some parts of your process. Because you’re filing as a low-income Chapter 7 bankruptcy applicant, you’ll mainly deal with your Trustee during a short meeting known as a 341 meeting, or creditors’ meeting. The 341 meeting is technically a meeting between you and your creditors. But because creditors rarely show up to 341 meetings, you’ll probably sit one-on-one with your Trustee as you’re asked questions about your finances. Once the New Jersey Bankruptcy Court assigns a Trustee to your case, you’ll be asked to forward some financial documents, like recent tax returns and pay stubs, to that their office. They need these documents so that they can prepare to ask you questions during your meeting.
Take Bankruptcy Course 2
Now it’s time to participate in another online education course. Much like the pre-filing credit counseling course you took before you filed for Newark bankruptcy, you now need to enroll in a debtor education class that has been approved by the Department of Justice for residents of New Jersey. The first class hopefully helped you to feel confident about deciding to file for bankruptcy. This class will hopefully help you to feel ready to build a solid financial foundation for your family’s future. Even if you’re skilled in matters of personal financial management, this course may provide you with excellent food for thought.
Attend Your 341 Meeting
If you’ve never been placed under oath before, know that your Trustee will insist upon this step during your 341 meeting. “341 meeting” is shorthand for the meeting that your Trustee conducts between you and your creditors. That is, any creditors that opt to show up to this meeting. Most creditors forego these meetings with low-income filers unless the debt in question is particularly significant or complex. Generally, these meetings only last about 10-15 minutes and consist of you answering your Trustee’s questions under oath. You’ll be asked questions about the time before filing bankruptcy in Newark and about your finances generally. These “chats” initially seem intimidating, but as long as you’re respectful and speak honestly, there will be no reason to stress about your 341 meeting.
Dealing with Your Car
Newark isn’t known for its pedestrian-friendly streets. Therefore, many car owners worry about whether they’ll be allowed to keep their cars when filing bankruptcy in Newark. In general, you can keep your car if you own it outright and an exemption covers its value. But if you’re still making loan payments, you’ll either be required toreturn it to your creditor, pay for the market value of your car all at once or reaffirm your debt. You can only reaffirm your debt and keep making payments on your car if you can convince the Court that you’ll be able to honor the terms of your loan reliably from now on, without it being a hardship on your monthly budget.
New Jersey Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Newark
New Jersey Means Test
If you have thought about filing for Chapter 7 bankruptcy in Newark before now, you probably know a little something about the New Jersey bankruptcy Means Test for Chapter 7. The New Jersey bankruptcy Means Test determines who is eligible to file for bankruptcy under Chapter 7 vs. Chapter 13. Eligibility largely rests on income limits that are adjusted for household size, as well as exemptions and deductions that higher-earners may claim to potentially become eligible for filing under Chapter 7 even though they make more than the income limits specify. If you fail the New Jersey bankruptcy Means Test, you may want to talk with an attorney about any additional exemption opportunities or expense deductions you may have missed.
Median Income Levels for New Jersey
New Jersey Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
|Household Size||Monthly Income||Annual Income|
Poverty Levels for New Jersey
New Jersey Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
New Jersey Bankruptcy Forms
Filing for Chapter 7 bankruptcy in Newark is easier than filing for Chapter 7 bankruptcy in much of the rest of the country. Unlike other Courts, the New Jersey Bankruptcy Court doesn’t require you to fill out any local New Jersey bankruptcy forms unique to the state. Instead, all the forms you need to file bankruptcy under Chapter 7 in New Jersey are standard, federal forms required of virtually all filers across the U.S.
New Jersey Exemptions
The New Jersey Bankruptcy Court recognizes both New Jersey bankruptcy exemptions and federal bankruptcy exemptions. This means that when you are filing for Newark bankruptcy, you can choose whether to take advantage of one kind of exemption model or the other, but not both. Claiming federal or New Jersey bankruptcy exemptions is an important process because it will allow you to keep most or all of your property safe from being sold by your Trustee so that the profits can be passed along to your creditors. You’ll identify which exemptions apply to your situation in a form known as Schedule C.