Chapter 7 Eligibility in Newark

The means test (11 U.S.C. section 707(b)) compares your income to the New Jersey median for your household size.

New Jersey Median Income (2026)

• 1 person: $68,047
• Household sizes 2-4 are progressively higher
• Each additional person adds approximately $9,900

Below the median = automatic Chapter 7 qualification. Above the median = full means test calculation with expense deductions.

The means test uses your average income over the 6 full calendar months before filing. Included:

• Wages, salary, tips, bonuses, overtime
• Net business income, rental income
• Pension, retirement, unemployment, workers' comp
• Alimony and child support received
• Contributions from others to household expenses

Not included: Social Security benefits and certain disability payments.

• Credit counseling within 180 days before filing
• No prior Chapter 7 discharge within 8 years, or Chapter 13 discharge within 6 years (check with 1328(f) screener)
• No disqualifying prior dismissals within 180 days
• Tax returns filed for the 4 most recent tax years
• Good faith -- court can dismiss for abuse

New Jersey does not have its own bankruptcy exemptions -- filers must use the federal exemption system under 11 U.S.C. section 522(d).

• Homestead: $27,900 (federal) -- equity above this is at risk in Chapter 7
• Vehicle: $4,450 (federal)
• Personal property: Household goods and clothing have separate limits

If you have significant non-exempt property, Chapter 13 lets you keep everything while repaying creditors through a plan.