There is a popular bankruptcy myth here in New Jersey that gives people the impression that it is tougher to file a chapter 7 bankruptcy, or worse, that they can't any more. Well, I can tell you that from handling bankruptcies for clients here in the Gloucester County area for the 8 years since this change was made, that that is just bunk!
The 2005 changes instituted something called "means testing" in which the gross income of the person filing is analyzed for the six month period leading up to the month in which he filed. It is then doubled to create an annual figure and then compared to the median income in New Jersey for that person's household size (e.g. a family of three).
If your income is below this median, then you do not make too much money to file a chapter 7 bankruptcy. Even if your income is over the median, if means testing shows that you have little or no money left over after the deduction of expenses, then you can still file a chapter 7.
I can tell you that in the vast majority of cases I have handled for clients, they do not have gross income over the median, or if they do, their expenses eliminate any income that could be used to pay creditors. Learn more here.
