If bills are piling up and calls from creditors never seem to stop, you’re not alone. Many people in Middletown and nearby New Jersey towns find themselves in a similar situation. When debt feels unmanageable, it’s easy to feel trapped — but there are legal options that can provide real relief.
One of the most common forms of debt relief is Chapter 7 bankruptcy. This process can help you clear certain debts and start fresh. While it may not be the right choice for everyone, it can be life-changing for those who qualify. Let’s look at how Chapter 7 works, who can file, and what to expect if you decide to move forward.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” is a legal process that can eliminate many types of unsecured debt. Instead of making payments over time, as in Chapter 13, your non-exempt assets (if any) may be sold by a trustee to pay creditors.
In most cases, debts like credit cards, personal loans, and medical bills can be discharged. Some obligations, such as child support, recent taxes, and most student loans, cannot be wiped out.
At The Cassidy Law Firm, we’ve guided many Middletown residents through the Chapter 7 process, helping them understand what debts can be eliminated and what property they can keep under New Jersey exemption laws.
Who Qualifies: The Means Test
Eligibility for Chapter 7 is determined in part by the Means Test. This compares your household income to the median income in New Jersey for a household of your size.
If you earn less than the median, you typically qualify right away.
If you earn more, you may still be eligible after accounting for certain expenses like mortgage payments, taxes, and healthcare costs.
The Means Test can be confusing, but you don’t have to figure it out alone. Let the bankruypty attorney at The Cassidy Law Firm review your situation and help determine whether Chapter 7 is an option for you.
Benefits of Filing Chapter 7
Filing Chapter 7 comes with several advantages:
Quick resolution: Many cases are completed within 4–6 months.
Immediate relief: The automatic stay stops creditor calls, wage garnishments, and lawsuits as soon as your case is filed.]
Debt discharge: Most unsecured debts can be eliminated, giving you a fresh start.
Asset protection: New Jersey law allows you to keep certain property through exemptions.
The Cassidy Law Firm can help ensure you make the most of these protections while avoiding common mistakes.
Challenges to Consider
While Chapter 7 offers significant relief, it’s not without downsides:
It can remain on your credit report for up to 10 years.
Some assets may be sold to repay creditors.
Certain debts can’t be discharged.
It can be emotionally challenging to go through the process.
These challenges don’t always outweigh the benefits, but they should be considered before filing.
The Chapter 7 Process in Middletown
If you decide Chapter 7 is right for you, here’s what the process generally looks like:
Credit counseling: Complete an approved course before filing.
File Your Petition: Submit the required forms to the bankruptcy court.
Automatic stay: Collection efforts are immediately halted.
Meeting of creditors (341 meeting): Answer questions from the trustee.
Debtor education course: Complete a second course before discharge.
Discharge: Eligible debts are erased.
Throughout this process, The Cassidy Law Firm can prepare your documents, represent you in meetings, and address any issues that arise.
When to Seek Legal Guidance
You might consider Chapter 7 if:
You have significant unsecured debt.
Collection actions are disrupting your life.
Your income is limited and unlikely to change in the near future.
Alternatives such as debt settlement, consolidation, or Chapter 13 bankruptcy may be better options for some individuals. Speaking with a bankruptcy attorney early can help you choose the right path.
Talk to a New Jersey Bankruptcy Lawyer Today
For many in Middletown and nearby New Jersey communities, Chapter 7 bankruptcy provides an opportunity to overcome overwhelming debt and establish financial stability. The process is manageable with the proper guidance, and the relief it provides can be long-lasting.
If you’re wondering whether Chapter 7 is right for you, The Cassidy Law Firm is here to help. Contact us today to take the first step toward a fresh start.