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How Long Does Consumer Bankruptcy Take in New Jersey?

When you’re living under the weight of crushing debt, time seems to stand still and a future without harassment by creditors seems like a distant fantasy. Fortunately, reality is much more positive. If you file for Chapter 7 bankruptcy, you can discharge your debt and have a clean slate within three to four months. The process includes the following steps:

  • Assembling paperwork — Your attorney helps you to present your bankruptcy petition and the required schedules detailing your current financial situation, your major transactions of the last two years, monthly living expenses, secured and unsecured debts, tax returns, personal property, deeds to real estate and automobile titles.
  • Filing — The fee for filing Chapter 7 bankruptcy is $335. Filing prompts the court to issue an automatic stay, prohibiting your creditors from contacting you regarding repayment.
  • § 341 Meeting of Creditors — At this brief meeting which you must attend, the bankruptcy trustee entertains objections from creditors. Very few creditors ever attend. If you have non-exempt assets, you must turn them over to the bankruptcy trustee at this time for liquidation.
  • Waiting period — Creditors have 60 days to challenge your right to a discharge of debt.
  • Notice of discharge — If no creditor challenges your right to a discharge, the court contacts you confirming that your debts have been discharged.

If you do not qualify for Chapter 7 liquidation or you have assets, such as a home, you want to retain, you can file Chapter 13. The process for Chapter 13 is similar, though the filing fee is only $310, and you must submit a proposed repayment plan when you file. The repayment plan must meet these criteria:

  • The plan is delivered in good faith.
  • The plan repays unsecured creditors as much as they would have received had you filed Chapter 7.
  • All disposable income must be paid into the plan for at least three years.

You must begin making payments under your plan immediately after filing. Creditors are more likely to attend your § 341 Meeting to raise some objection about the repayment schedule.  After the meeting, the court sends you approval of your repayment plan.

Depending on your income, you have to stay on the plan for 36 to 60 months. Chapter 13 gives you a longer time horizon until you’re debt free, but the payment plan itself offers relief. You’ll be paying less per month than you are now, your creditors will not hound you, and you’ll be able to see an endpoint.

If you are considering bankruptcy in New Jersey, the Law Offices of James C. Zimmermann provides personalized services to meet your unique circumstances. To schedule a free initial consultation, call 973-764-1633 or contact us online.

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