A New Jersey resident can quickly become overwhelmed by debt after a divorce, job loss, accident or illness. Under these circumstances, filing for bankruptcy may be an easy decision. However, deciding whether to file a Chapter 13 or Chapter 7 bankruptcy -- the most commonly filed by individuals -- may not be quite as easy.
Each type of bankruptcy has its own filing requirements and benefits for the petitioner. A Chapter 7 is a liquidation of the petitioner's assets to pay his or her debts. In a Chapter 13, however, an individual's debts are restructured. Payments are made each month for anywhere from three to five years under court supervision.