If you are struggling under a mountain of debt, you may be considering bankruptcy protection. However, the filing process is more restrictive today than it once was.

Keep in mind that to be eligible for Chapter 7 bankruptcy in the state of New Jersey, you must be able to pass the means test.

About your income

The means test involves determining your average monthly income for the past six months. Once you arrive at that figure, you multiply it by 12. The result will be your annual income, a number that will be used in the New Jersey means test, which is calculated based on the number of people in your household. For example, the annual limit for a two-person household is $70,150. For a four-member household, the yearly limit is $103,946

Exemptions to the means test

If your income is higher than the threshold for the size of your household, you will have to complete the means test and pass it if you wish to file for bankruptcy–but in this case, only for Chapter 13, which would allow you to pay back some of your unsecured debts. If your income is lower than the limit, you will be exempt from taking the test and are eligible to file Chapter 7. There are also other circumstances that will exempt you from having to take the means test. For instance, you will be exempt if your debts are mostly non-consumer in nature. Furthermore, you will not have to take the test if you are a disabled veteran and accrued debt while on active duty or while participating in an activity connected to homeland security.

Considering options

You may have accumulated an overwhelming amount of debt because you lost your job, went through a divorce or required medical care that resulted in staggering bills. Bankruptcy can help you get a fresh start in life, but an experienced attorney will tell you this is not the only answer. You have options, and they should be explored along with the requirements for and benefits of Chapter 7 protection in New Jersey.