There are several different types of bankruptcy options for people in New Jersey who find that they are unable to repay the debts that they owe. Most often, people choose a personal bankruptcy under Chapter 7 or 13. Each of these has requirements for the process, possibly including the need to be a wage earner or to have an income under a Chapter 13.
In a personal bankruptcy case, regardless of the Chapter of the Code chosen, a person in New Jersey must disclose their debts to the court. In most cases, those debts that are unsecured are the ones that the person filing hopes will be discharged. When this is successful, people find that they become free of these types of debts, which are often overwhelming.
However, there are cases where the debts are not available for discharge. This is what occurred in one recent case in another state. In that matter, a woman tried to discharge a judgment against her that was issued when a court found that she had been overpaid in alimony support. The bankruptcy court found that this debt had been based on a family matter and, therefore, fell on the rules governing these types of debts.
There are many rules for what can be discharged and what is exempt in a personal bankruptcy case. This is true rather the matter falls under a Chapter 7 or 13 bankruptcy. To ensure that the best possible outcome is achieved, people in our state may find it helpful to review the applicable Chapters of the Bankruptcy Code before entering into the process.
Source: Bloomberg Law, Debt Owed to Ex-Husband for Overpayment Of Spousal Support Is Nondischargeable, Diane Davis, Dec. 13, 2013