Bankruptcy FAQ
for New Jersey
Clear, plain-language answers to common bankruptcy questions — grounded in federal law and New Jersey court procedure.
General Bankruptcy Questions
What is bankruptcy?
Bankruptcy is a federal legal process designed to help individuals and businesses address overwhelming debt under court supervision. Depending on the chapter filed, it may discharge certain debts or create a structured repayment plan.
What is the automatic stay?
The automatic stay is a legal protection that generally goes into effect when a bankruptcy case is filed. It can stop many collection actions, including lawsuits, wage garnishments, and foreclosure proceedings, while the case moves forward. The U.S. Bankruptcy Court for the District of New Jersey explains that the stay halts most collection activity once notice of the filing is received.
When does the automatic stay start?
The stay typically begins immediately upon filing the bankruptcy petition with the court, subject to certain legal exceptions.
Will all debts be erased?
Not all debts are dischargeable. Certain obligations, such as specific taxes, domestic support obligations, and some student loans, may require additional legal analysis.
If you are facing active collection, foreclosure, or garnishment, visit Stop Foreclosure With Bankruptcy or Stop Wage Garnishment for more specific guidance.
Credit Counseling Requirement
Do I need credit counseling before filing?
Yes. Individuals must complete an approved credit counseling course within 180 days before filing for bankruptcy. This requirement is established under federal bankruptcy law and reflected in New Jersey bankruptcy court guidance.
Is a second course required?
Yes. A financial management course is typically required after filing and before receiving a discharge.
What happens if I skip this step?
Failure to complete required courses can delay or prevent discharge. Knowing the requirements up front helps avoid complications.
If you are unsure how this requirement applies to you, start with a case evaluation to review the timeline clearly.
Chapter 7 FAQ
How long does Chapter 7 take?
Many Chapter 7 cases move from filing to discharge within several months, depending on court schedules and case complexity.
Do I qualify for Chapter 7 in New Jersey?
Eligibility often depends on income and a calculation known as the means test. Household size, allowable expenses, and prior filings may affect qualification.
Will I lose my property in Chapter 7?
Exemption rules determine what property may be protected. A careful review of assets is part of the pre-filing evaluation.
Can I eliminate credit card debt in Chapter 7?
In many cases, qualifying unsecured debts such as credit cards and medical bills may be discharged.
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For more detailed information, visit Chapter 7 Bankruptcy.
Chapter 13 FAQ
How long is a Chapter 13 plan?
Chapter 13 typically involves a court-approved repayment plan lasting 36–60 months.
Who can file Chapter 13?
Chapter 13 is generally available to individuals with regular income sufficient to fund a repayment plan.
Can Chapter 13 stop foreclosure?
Filing may stop foreclosure through the automatic stay and allow missed mortgage payments to be addressed through a structured plan.
What if I am self-employed?
Self-employed individuals may qualify if they have reliable income and can document it properly.
If you are unsure how this requirement applies to you, start with a case evaluation to review the timeline clearly.
After Filing Bankruptcy
What happens after I file?
After filing, the automatic stay generally stops most collection activity. A meeting of creditors is scheduled, and your case proceeds under court supervision.
Will bankruptcy ruin my credit forever?
Bankruptcy is reported on credit reports for a defined period, but many individuals begin rebuilding credit after discharge by maintaining steady income and responsible financial habits.
Can I get credit again?
Many people receive credit offers after bankruptcy, though terms vary. Responsible use of new credit is part of long-term rebuilding.
When should I call an attorney?
If you are facing foreclosure, garnishment, a lawsuit, or mounting unsecured debt, early consultation can clarify options before problems escalate.
Still Have Questions? Get Clear Answers Before You File
Bankruptcy involves defined steps and legal requirements, but the process does not have to feel confusing. Robert H. Johnson LLC serves clients from its Cherry Hill office and represents individuals and businesses throughout New Jersey, including Camden, Marlton, Mt. Laurel, and Pennsauken. If you want plain answers grounded in New Jersey practice, start with a focused case evaluation.