The idea of filing for bankruptcy can be pretty daunting for many people but it can also be the first step towards a successful financial future. When an individual starts to think about bankruptcy, they may be unsure of which type of bankruptcy they should file for. However, there isn’t much of a decision because bankruptcy eligibility is determined by the “means test.” The means test determines whether an individual is eligible to apply for Chapter 7 bankruptcy. If they are not eligible for Chapter 7 bankruptcy according to the test, the individual will have to file Chapter 13 bankruptcy, which requires them to repay some of their debts for a few years before they can be discharged.
The means test compares the debtor’s median household income with the median household income of the county in which they reside. So, for example, in Monmouth County, the median household income in 2016 was $87,297. If the debtor’s income is less than the average amount, they may be eligible for Chapter 7 bankruptcy. If it is greater, they will not be eligible for Chapter 7 bankruptcy.
Bankruptcy can allow a person in debt to get the fresh start they need for their financial situation. If you are considering bankruptcy in New Jersey, contact our firm today.
If you are in need of experienced legal counsel for matters of personal injury, medical malpractice, medical device injuries, unsafe drug injuries, consumer protection, bankruptcy, SSD, or criminal law in New Jersey, please contact Tomes Law Firm, PC and we will be happy to assist you.