Legal Question in Bankruptcy in United States

You can always qualify for bankruptcy - of some sort. You cannot qualify for a Chapter 13 bankruptcy. Whether you can qualify for Chapter 7 or must look at Chapter 11 (which is very complicated and expensive to file) is something you should discuss in person with a bankruptcy attorney.

There are 2 main issues concerning whether it is advisable to file a chapter 7 bankruptcy, assets and income. If you have assets that would be exposed in a bankruptcy, I might advise against it. If you make too much income to file chapter 7, then chapter 11 would be your only option. In chapter 11, you propose a repayment plan which may be some or all of the debt, again depending on your income and assets.

I am more than happy to advise you better on a free initial basis.

It is a shame that you may need to consider bankruptcy if you don't have any debts besides this one. Clearly, you don't need to consider bankruptcy unless this creditor becomes aggressive in attempting to collect the debt. If you don't have any assets outside of New Jersey, then practically speaking you will not have much exposure unless they domesticate the judgment in NJ (as I understand that the judgment is entered in CA or some other state). The process to domesticate an out of state judgment in NJ does not take very long, and the time is based mostly on how quickly they move forward. They must provide you with notice of the effort to domesticate the judgment. If they do become aggressive in trying to collect the debt, then you can certainly consider a bankruptcy filing. As the other posters observed, your qualification and choice would be based on your assets/income. I think your question was more about whether having only 1 debt would rule out bankruptcy. No, it would not, but as stated it is more about your assets/income. I see you are in Maple Shade which of course is very close to my office, so feel free to call me if you would like assistance.

It doesn't matter if this is your only debt. There is no law saying that you must have a certain number of creditors or debts to file for bankruptcy. The amount of the claim would prevent you from filing for Chapter 13, but the number of creditors or total amount of debt is not relevant. You might be eligible for Chapter 7 or Chapter 11.

The decision to file for bankruptcy should be done in consultation with an experienced bankruptcy attorney.

Qualification for chapter 7 or 11 is not difficult, so long as you have lived in the jurisdiction long enough and do not have income which is above the median (averaged over the six months prior to fling), and have no previously been involved in any formal bankruptcy proceedings. Chapter 13, however, does have maximum debt limits. Talk to an experienced bankruptcy attorney in your state of residence (New Jersey?) for the details, although ownership of large assets back in CA could also qualify you for filing there. Creditors can easily domesticate judgments from other states to states where your assets are located, and the process can probably be accomplished within a few weeks if the creditor is diligent.

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