Types

• The U.S. Bankruptcy Code provides two primary types of cases for consumers. A consumer can seek a Chapter 7 bankruptcy, which permits a debtor the ability to discharge her debts. A Chapter 13 bankruptcy provides a debtor the opportunity to develop a repayment plan under court supervision.
  
  A business in New Jersey also can take advantage of Chapter 7 bankruptcy provisions. A business can seek a discharge of its debt through this type of case. Additionally, a business can file a Chapter 11 bankruptcy, which allows it to develop a plan to repay its debt and reorganize its operations.
  
  

No Homestead Exemption

• In most states a consumer debtor is able to take advantage of a homestead exemption in bankruptcy. The homestead exemption protects a debtor's personal residence from creditors. There is no homestead exemption available for a debtor in bankruptcy in New Jersey.
  
  

Personal Property

• New Jersey bankruptcy law places strict limitations on personal property a consumer debtor claims as exempt. While most states permit a debtor exemption for one motor vehicle, the total personal property exemption (excluding home furnishings) cannot exceed $1,000. For all practical purposes there is no motor vehicle exemption in New Jersey.
  
  

341 Meeting

• The bankruptcy law requires a debtor to participate in a 341 meeting, which is also known as a creditors' meeting. The session is designed to provide the bankruptcy court trustee the opportunity to question a debtor about her assets, debts, and income and liabilities. The bankruptcy court trustee is the court official charged with overseeing a case on a day-to-day basis. A representative of a business must appear at a 341 meeting in a commercial bankruptcy.
  
  

Warning

• Consumer and commercial bankruptcy cases are complex legal matters. Therefore, you interests or the interests of your business enterprise tend to be best served in bankruptcy through experienced legal representation. The New Jersey State Bar Association maintains a directory of attorneys in different practice areas, including bankruptcy law:
  
  New Jersey State Bar Association
  New Jersey Law Center • One Constitution Square
  New Brunswick, NJ 08901-1520
  njsba.com