To file for bankruptcy in NJ, you choose between Chapter 7 and Chapter 13, complete a required credit counseling course within 180 days before filing, gather detailed financial records, decide whether to use New Jersey or federal property exemptions, and submit your petition to the U.S. Bankruptcy Court for the District of New Jersey along with a $338 fee for Chapter 7 or $313 for Chapter 13. The filing itself is one afternoon of paperwork. The decisions behind it — which chapter, which exemption system, whether to hire an attorney — are what determine how much of your property and debt you walk away with.
Pick the Right Chapter First
Almost every personal bankruptcy in New Jersey is filed under Chapter 7 or Chapter 13, and the difference between them is fundamental.
Chapter 7 is a liquidation. A court-appointed trustee reviews what you own, sells anything not protected by an exemption, distributes the proceeds to creditors, and the remaining qualifying debt is wiped out. Most Chapter 7 cases close in about four months.1United States Courts. Discharge in Bankruptcy – Bankruptcy Basics It works best if you have significant unsecured debt like credit cards or medical bills, limited income, and few assets worth protecting.
Chapter 13 is a repayment plan. You keep your property and propose a three-to-five-year plan, funded by your regular income, that catches you up on secured debts and pays something toward unsecured creditors.2United States Courts. Chapter 13 – Bankruptcy Basics If you’re behind on your mortgage and want to stop a foreclosure while keeping the house, Chapter 13 is usually the answer. Any remaining eligible debt is discharged at the end of the plan.
The Means Test for Chapter 7
Chapter 7 is only available if your household income falls below New Jersey’s median for your family size, or if you pass the second half of the means test. The U.S. Trustee Program publishes the median figures.3United States Department of Justice. U.S. Trustee Program Means Testing For cases filed between November 1, 2025 and March 31, 2026, the New Jersey medians are:4U.S. Trustee Program. Census Bureau Median Family Income By Family Size
- One earner: $84,938
- Household of two: $104,136
- Household of three: $133,620
- Household of four: $163,817
- Each additional person: add $11,100
Below the median, you qualify. Above it, the second part of the means test subtracts allowed living expenses from your income to see whether you have enough disposable income to fund a Chapter 13 plan. If the math shows you can’t meaningfully repay creditors, you still qualify.
Married filers should know that if you file alone but your spouse doesn’t, your spouse’s income still counts toward the household total. You can offset this with a marital adjustment, which subtracts your spouse’s separate expenses (their own credit card payments, taxes, support obligations for people who aren’t your dependents), backed by documentation like account statements.
Complete the Credit Counseling Course
Before you can file, federal law requires you to complete a credit counseling course from a provider approved by the U.S. Trustee Program.5United States Courts. Credit Counseling and Debtor Education Courses It has to happen within 180 days before your petition goes in. Most providers offer it online or by phone, and the fee is typically $20 to $50. You’ll get a certificate, which must be filed with your petition. Without it, the court will dismiss your case.
Gather Your Financial Documents
Bankruptcy petitions are detailed, and everything you file is signed under penalty of perjury. Start pulling records well before your intended filing date:
- Pay stubs or other proof of income for the last 60 days, for you and your spouse (even if your spouse isn’t filing)6United States Courts. Chapter 7 Bankruptcy Basics
- Your most recent federal and state tax returns, plus any prior-year returns you haven’t yet filed
- Bank statements for all accounts covering the months before filing
- An inventory of everything you own with estimated current values
- A list of every creditor’s name, address, account number, and the amount owed
- A statement of your current monthly income and expenses
Every creditor has to appear on the petition. Leaving someone off, even a family member or a personal loan you’d rather keep paying, can leave that debt non-dischargeable when it didn’t need to be.
Choose New Jersey or Federal Exemptions
Exemptions decide what the trustee can’t touch. New Jersey is one of the states that lets you choose between the state exemptions and the federal bankruptcy exemptions under 11 U.S.C. § 522(d).7United States Bankruptcy Court. Information Concerning Exemptions You pick one system for the whole case. No mixing.8Justia. New Jersey Bankruptcy Exemption Statutes
New Jersey’s state exemptions are thin. There is no state homestead exemption, so home equity gets no special protection under state law. The general personal property exemption is just $1,000 under N.J.S.A. 2A:17-19. Clothing is exempt with no dollar limit; household goods and furniture get a separate $1,000 exemption under N.J.S.A. 2A:26-4. Retirement accounts that qualify under federal ERISA rules, including 401(k)s and pensions, are fully protected either way.
The federal exemptions are usually the better choice, especially for homeowners. For cases filed on or after April 1, 2025, key federal amounts are:9Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
- Homestead: $31,575 in equity in your primary residence
- Motor vehicle: $5,025 in one vehicle
- Household goods: $800 per item, up to $16,850 total
- Jewelry: $2,125
- Wildcard: $1,675 in any property, plus up to $15,800 of any unused portion of the homestead exemption
The wildcard is what makes the federal system pull ahead for most people. Renters with no home equity can redirect up to $17,475 of combined wildcard protection to cover bank accounts, a vehicle worth more than the $5,025 cap, or anything else. Picking the wrong system can mean losing property you could have kept, and the court’s own guidance warns that claiming property under the wrong law could cost you.7United States Bankruptcy Court. Information Concerning Exemptions
Where to File in New Jersey and What It Costs
Your petition goes to the U.S. Bankruptcy Court for the District of New Jersey. The court has three offices, and your case is assigned based on your county of residence:10United States Bankruptcy Court. Where to File By County
- Newark: Bergen, Essex, Hudson, Morris, Passaic, Sussex, and Union counties
- Trenton: Hunterdon, Mercer, Middlesex, Monmouth, Ocean, Somerset, Warren, and most of Burlington County
- Camden: Atlantic, Camden, Cape May, Cumberland, Gloucester, Salem, and several Burlington County municipalities including Cinnaminson, Delran, Maple Shade, Moorestown, and Mount Laurel
The filing fee for Chapter 7 is $338.11United States Bankruptcy Court. District of New Jersey Court Fees Chapter 13 is $313.12United States Bankruptcy Court. Frequently Asked Questions If you’re filing Chapter 7 and your household income is below 150% of the federal poverty line, you can apply to have the fee waived; otherwise, you can request to pay in installments.13United States Bankruptcy Court. Determine How You Will Pay Your Filing Fee Fee waivers aren’t available for Chapter 13.
Most people file with a bankruptcy attorney, who submits the case electronically. Attorney fees for a straightforward Chapter 7 case generally run $800 to $3,000 depending on complexity. Chapter 13 attorney fees are typically higher and often paid through the plan itself. Filing without an attorney (pro se) is legal but technical, and mistakes tend to cost more than the attorney fee would have.
What Happens the Moment You File
Filing triggers the automatic stay, a federal injunction that forces creditors to stop nearly all collection activity: wage garnishments, foreclosure proceedings, repossessions, lawsuits, and collection calls all halt.14Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay The stay stays in place through the case unless a creditor asks the court to lift it for a specific debt, which usually only happens on secured debts like car loans where the borrower isn’t paying.
If you had a bankruptcy dismissed within the past year, that protection is limited. In a new case, the automatic stay expires after 30 days unless the court extends it, and if two or more cases were dismissed in the previous year, no stay takes effect at all without a court motion.14Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
The 341 Meeting of Creditors
Every filer has to attend a meeting of creditors, called the 341 meeting, typically scheduled 21 to 40 days after your petition is filed.15United States Bankruptcy Court. What is a 341(a) Meeting of Creditors? Despite the name, creditors rarely show. The meeting is between you, your attorney if you have one, and the trustee assigned to your case.
The trustee places you under oath and asks about your debts, assets, income, and expenses to verify your petition. Bring government-issued photo ID and proof of your Social Security number. Joint filers both attend. A straightforward case takes 10 to 15 minutes. Before the meeting, you’ll need to give the trustee your most recent tax return and recent pay stubs.6United States Courts. Chapter 7 Bankruptcy Basics Miss the meeting or skip the documents and your case can be dismissed.
Take the Second Course and Get Your Discharge
The pre-filing credit counseling course is only the first of two. After you file, you have to complete a debtor education course — sometimes called a personal financial management course — before the court will grant a discharge.5United States Courts. Credit Counseling and Debtor Education Courses It runs about two hours, costs $20 to $50, and covers budgeting and credit basics.
In a Chapter 7 case, file the completion certificate (Official Form 423) within 60 days after the first date set for your 341 meeting. Miss that deadline and the court can close your case without discharging anything. In a Chapter 13 case, the certificate must be filed before your last plan payment. If the course provider doesn’t submit it directly, filing the form is on you.
Once everything is in, a Chapter 7 discharge order typically arrives about four months after filing.1United States Courts. Discharge in Bankruptcy – Bankruptcy Basics Chapter 13 filers get their discharge after finishing the full three-to-five-year plan. The discharge permanently eliminates your personal liability on qualifying debts.
Debts Bankruptcy Won’t Erase
Not everything is dischargeable, and this is worth knowing before you spend money on a case that won’t clear the debt you filed for. Federal law keeps certain categories in place regardless of chapter:16Northern District of Florida | United States Bankruptcy Court. What Debts Are Not Dischargeable?
- Child support and alimony
- Most federal and private student loans, unless you prove undue hardship in a separate lawsuit within the bankruptcy
- Recent income taxes, taxes on unfiled returns, and taxes involving fraud
- Debts obtained through fraud, false pretenses, or misrepresentation
- Debts for personal injury or death caused by driving while intoxicated
- Criminal restitution and most government fines
- Debts you didn’t list on your petition
If most of what you owe falls into these categories, bankruptcy may not solve the problem you’re trying to solve, and that’s worth working out with an attorney before you file.