More And More New Jersey Bankruptcy Filings

Because of the current state of the economy, more and more people have had to file for bankruptcy causing New Jersey bankruptcy rates to steadily climb over the past three years. For example in 2007, a little over 19,000 residents filed for bankruptcy in the state of New Jersey. More than half of that number, 63%, elected to file for chapter 7 protections. By 2008, this number had increased to a little over 26,000 filings with about 69% deciding to file for chapter 7. So far, with 2009 winding down, there are a little more than 26,000 filings (with more expected before the end of the year) and 77% of those filings have been a chapter 7.

The chapter of bankruptcy that the majority of a state files is certainly indicative of the composition and undertakings of that state. For example, with New Jersey bankruptcy figures stacked heavily in the chapter 7 arena, this tells you that residents must be struggling financially because the new standards set in place by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 now requires potential filers to be able to prove that they actually need and deserve federal bankruptcy protection. So after October 17, 2005, filers had to subject themselves to the financial means test. Part of proving that one actually needs federal bankruptcy protection includes evaluating one's income along with their monthly debt. This also takes into consideration the median income for the state in which the filer lives. This can certainly affect New Jersey bankruptcy filings. Additionally, all filers are required to participate in a course that provides educational instruction with regard to financial matters prior to having their debt discharged. The fact that New Jersey is primarily a chapter 7 state means that residents are actually passing the new stringent standards set by the Bankruptcy Abuse Prevention and Consumer Protection Act.



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