Toms River, New Jersey - Daniel Straffi, Jr. of Straffi & Straffi Attorneys at Law ( ) releases guidance for residents evaluating debt relief options under Chapter 7, highlighting the 2025 income thresholds and the operation of the means test in New Jersey. As a leading New Jersey Chapter 7 bankruptcy lawyer, Mr. Straffi details how updated figures and exclusions affect eligibility, and how timing, documentation, and household size factor into a successful filing.

Effective for cases filed on or after May 15, 2025, the U.S. Trustee median income benchmarks for New Jersey are as follows: 1-person household at 84,257 dollars annually, 2-person household at 102,903 dollars, 3-person household at 131,173 dollars, and 4-person household at 163,110 dollars, with 11,100 dollars added for each additional household member. A New Jersey Chapter 7 bankruptcy lawyer evaluates these figures against the debtor's six-month average income and household size, then applies the two-step means test to determine whether Chapter 7 is appropriate or whether Chapter 13 or other approaches may better align with the facts.

The means test compares current monthly income to state medians and, when income exceeds the benchmark, analyzes allowable expenses to identify disposable income. Key exclusions apply. Social Security retirement, SSDI, and SSI are excluded from current monthly income calculations. Military and veterans benefits covered by the HAVEN Act, including VA disability and death benefits, DoD combat-related special compensation, disability severance pay, certain catastrophic injury payments, and the portion of disability retired pay above non-disability retired pay, are likewise excluded. Payments to victims of war crimes and terrorism are excluded. A New Jersey Chapter 7 bankruptcy lawyer uses these rules to prepare accurate Form 122A filings, align documentation with trustee expectations, and present a clear record that supports eligibility.

Household size remains a critical variable because it governs the median income threshold used in the comparison. Larger households carry higher limits that reflect increased living costs. Asset protection strategy also matters. New Jersey does not provide a state homestead exemption, but debtors may elect federal exemptions under 11 U.S.C. § 522(d). As of April 1, 2025, the federal homestead exemption is 31,575 dollars per debtor, doubling for joint filers. Selection between state and federal exemptions depends on asset mix, including real property equity, vehicles, and personal property, and can influence both case posture and potential non-exempt exposure.

Beyond income, the nature of debts and expense profiles drives case outcomes. Chapter 7 primarily addresses unsecured obligations such as medical bills and credit card balances, while secured debts require separate analysis of collateral and reaffirmation or surrender paths. Trustees review pay histories, benefit letters, leases, support orders, bank statements, and tax filings. Median income tables and Internal Revenue Service standard expense figures see periodic updates, including consumer price index adjustments early in the calendar year, so filings must reflect the table in effect on the petition date. With accurate data entry and well-supported deductions, a New Jersey Chapter 7 bankruptcy lawyer can position a case for a timely discharge and minimize avoidable objections under section 707.

About Straffi & Straffi Attorneys at Law:

Straffi & Straffi Attorneys at Law is a New Jersey law firm based in Toms River that serves individuals and business owners in bankruptcy, family law, and criminal defense matters. The firm provides clear guidance across Chapter 7 and Chapter 13 filings, adversary proceedings, and related financial reorganizations. Representation extends throughout Ocean County and surrounding New Jersey communities. For consultations, call 732-341-3800 or visit Straffi & Straffi Attorneys at Law online to schedule an appointment.

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