New Jersey Bankruptcy Exemptions


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Overview

How Exemptions Work In New Jersey

Exemptions in Chapter 7 and Chapter 13

You can protect property covered by an exemption regardless of whether you file for Chapter 7 or 13. But each chapter treats nonexempt property—things not covered by an exemption—differently.

  • In Chapter 7 bankruptcy, the bankruptcy trustee sells nonexempt property and distributes the proceeds to creditors.
  • In Chapter 13 bankruptcy, you keep everything you own. However your repayment plan must pay the value of the nonexempt property equity, or your disposable income, whichever is more.

The different approaches ensure that creditors receive the same amount regardless of the chapter filed.

Sources of Exemption Laws

Bankruptcy law is federal, but the laws regarding debts, collection, and property have traditionally resided in state law.

State Exemption Laws

Every state has its own set of exemptions laws.

These laws specify what kinds of property are "exempt from attachment" by a creditor in those states. These laws informally known as "exemption laws."

Sometimes they are collected under one section of a statute, but there are miscellaneous exemption provisions throughout the laws of New Jersey.

Federal "Non-Bankruptcy" Exemptions

In addition to your state exemptions, various kinds of federal benefits, retirement accounts and other things are exempt under federal law, separate and apart from the Federal Bankruptcy Code — Title 11 of the United States Code (11 U.S.C.). 

In all but 19 states, you must use these laws to protect your property, like your car and your house.

Federal Bankruptcy Exemptions Under Section 522 —
an Alternative System Available in 19 States

In 19 states you have the option of using the Federal Bankruptcy Exemptions  found in (11 U.S.C. Section 522(d)) AlaskaArkansas, Connecticut, District of Columbia, Hawaii, Kentucky, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, New Mexico, Texas, Vermont, Washington, Wisconsin.

Which exemptions system you should choose may depend on the particular facts of your situation, where you live, and what kinds of property you own. 

Exemption Categories

We have categorized state and federal exemptions by category

Real Estate: Homestead

Personal Property: Personal Property, Tools of Trade, Wildcard

Retirement, & Insurance,  Public Benefits

Doubling Exemptions for Joint Filers?

When a married couple files for bankruptcy jointly, federal law and the laws of many states allow them each to claim the full amount of an exemption.
(11 U.S.C. § 522.) Because a couple gets to claim twice the amount available to those who file alone, this practice is informally known as “doubling.”

Not all states allow doubling, however. (California, for example, does not.) And some states allow married couples to double only certain exemptions (for example, they might be able to double personal property exemptions but not the homestead exemption). In the charts that follow, we indicate exemptions that cannot be doubled (and states that don’t allow doubling at all). Unless you see a note stating that you cannot double, assume that you can.

How Bankruptcy Exemptions Work in New Jersey

Since the federal exemptions ARE available, New Jersey residents are not stuck with their state law exemptions. And that's good, because the New Jersey state law exemptions are so lame, everyone uses the the federal exemptions in New Jersey.

There is no homestead exemption, no specfic Vehicles exemption and only a $1,000 wildcard exemption for any property. And no exemption for in tools of trade.

New Jersey Exemptions Discussed On The Web

Both UpSolve and Nolo have discussions of New Jersey bankruptcy exemptions.

Does New Jersey Adjust Exemptions for Inflation?

New Jersey does not adjust exemption amounts for inflation. 

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Homestead

New Jersey Homestead Exemption

Homestead Exemptions - State System

Homestead Exemption Under New Jersey Law

None, but survivorship interest of a spouse in property held as tenancy by the entirety is exempt from creditors of a single spouse. And New Jersey residents can use the Federal Bankruptcy exemptions.

Amount Joint amount

25,150 (federal exemption)

50,300 (federal exemption)

NOTE: Residency Requirement Caps Maximum Homestead at $189,050 if you've recently moved to a State that allows more than that

Under the 2005 bankruptcy law, you must be have lived in the state for at least 40 months (3 years + 4 months) before you can claim any homestead protection greater than $189,050. (If your state's exemption offers less than this amount, the law is irrelevant to you.) .

IF you are moving to another state, OR you moved to New Jersey within in the last two years, click here.

Federal Non-Bankruptcy Homestead Exemptions

These are exemptions under federal law, but and are NOT part of the bankruptcy code list of exemptions in 522(d), so states cannot "opt out" from these exemptions. These exemptions available in every State ONLY IF you are using the state exemptions. You cannot use these exemptions if you are using the federal bankruptcy exemption scheme under § 522(d)

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Homestead Exemptions - Federal System § 522(d)

Can New Jersey debtors use the Federal Bankruptcy exemptions instead of New Jersey exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Home Valuation tool

Just add your street address to get an estimate of the value of your house, and all others in your neighborhood. (Note: Does not serve all areas, and valuations are imperfect estimates only.)

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Tenancy By The Entirety

Does New Jersey Recognize Tenancy by the Entirety?

New Jersey recognizes TBE for all types of property.

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Personal Property

New Jersey Motor Vehicle Exemption & Other Personal Property Exemptions

New Jersey Personal Property Exemptions — State System

Personal Property Exemptions Under New Jersey Law

CAR:

no specific exemption

Federal Non-Bankruptcy Personal Property Exemptions
(available only if using State System)

Personal Property Exemptions — Federal System § 522(d)

Can New Jersey debtors use the Federal Bankruptcy exemptions instead of New Jersey exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Personal Property Exemptions in Other States

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Tools of Trade

New Jersey Tools of Trade Exemptions

Tools of Trade Exemptions — State System

New Jersey Law Tools of Trade Exemptions

Federal non-bankrupcty Tools of Trade Exemptions

Tools of Trade Exemptions — Federal System § 522(d)

Can New Jersey debtors use the Federal Bankruptcy exemptions instead of New Jersey exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Tools of Trade Exemptions in Other States

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WildCard

New Jersey WildCard Exemption

Wildcard Exemptions — State System

New Jersey Law Exemptions

None (see personal property)

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Federal Non-Bankruptcy Wildcard Exemptions (none)

Wildcard Exemptions -- Federal System § 522(d)

Can New Jersey debtors use the Federal Bankruptcy exemptions instead of New Jersey exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

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WildCard Exemptions in Other States

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Wages

New Jersey Wage Garnishment Exemption

 New Jersey collections law and federal labor law (a federal non-bankruptcy exemption) set limits on what wages can be garnished.
 
The Wage Garnishment exemption in bankruptcy is for "earned by unpaid wages"... that is wages you'd earned as of the date you filed, but hadn't been paid for yet.
In a few states, the exemption protects earlier wages deposited in a bank account.
 
As the NCLC pointed out in a 2019 survey of state wage garnishment laws, some states fail to guarantee that a debtor can earn a poverty wage, free of garnishment.

See also on LegalConsumer.com

From Elsewhere on the web:

Wage Exemptions -- State System

New Jersey Law Wage Garnishment Limits

New Jersey garnishment law protects 90% of wages if under 250% of poverty.

New Jersey scored an "D" in the the NCLC grading of state wage garnishment protections, because it preserves more of a worker’s wages than the minimum required by federal law.

Federal Non-Bankruptcy Law
(available only if using State System)

Federal "non-bankruptcy" law also offers exemption protection for wages.

Wage Garnishment — Federal System § 522 (no exemption)

Can New Jersey debtors use the Federal Bankruptcy exemptions instead of New Jersey exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Wage Garnishment in Other States

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Insurance

New Jersey Insurance Exemptions - Life, Disability, Survivors Benefits

Insurance Exemptions — State System

New Jersey State Law Insurance Exemptions

Federal Non-Bankruptcy Insurance Exemptions
(available if using State System of exemptions)

Federal System § 522(d) — Insurance Exemptions 

Can New Jersey debtors use the Federal Bankruptcy exemptions instead of New Jersey exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

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Pensions & Retirement Assets

New Jersey Pension and Retirement Exemptions
Will I Lose My Retirement Savings If I File For Bankruptcy?

Virtually all types of tax-exempt retirement accounts are exempt in bankruptcy, whether you use the state or federal exemptions. You can exempt 401(k)s, 403(b)s, profit-sharing and money purchase plans, IRAs (including Roth, SEP, and SIMPLE IRAs), and defined-benefit plans.

These exemptions are unlimited—that is, the entire account is exempt, regardless of how much money is in it—except in the case of traditional and Roth IRAs. For these types of IRAs only, the exemption is limited to a total value of $1,512,350 per person (this figure will be adjusted every three years for inflation). If you have more than one traditional or Roth IRA, you don’t get to exempt $1,512,350 per account; your total exemption, no matter how many accounts you have, is $1,512,350.

  • If you are using the federal bankruptcy exemptions, you can find this retirement account provision at 11 U.S.C. § 522(d)(12) and the current exemption amount in 11 U.S.C. § 522(n).
  • If you are using state exemptions, cite 11 U.S.C. § 522(b)(3)(C) as the applicable exemption when you complete your bankruptcy papers.

Pension & Retirement Exemptions — State System

Pension & Retirement Exemptions under New Jersey Law 

Federal Non-Bankruptcy Pension & Retirement Exemptions
(available only if using State System)

Pension & Retirement Exemptions — Federal System § 522(d)

Can New Jersey debtors use the Federal Bankruptcy exemptions instead of New Jersey exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Pension & Retirement Exemptions in Other States

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Public Benefits

Public Benefits Exemptions for New Jersey

Public Benefits Exemptions — State System

New Jersey Law — Public Benefits Exemptions

Federal "Non-Bankruptcy" Public Benefits exemptions
(available in if using state system)

Public Benefits Exemptions — Federal System §522(d)

Can New Jersey debtors use the Federal Bankruptcy exemptions instead of New Jersey exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Public Benefits Exemptions in Other States

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Miscellaneous

New Jersey Miscellaneous Exemptions

Miscellaneous Exemptions -- State System

Miscellaneous Exemptions Under New Jersey Law

See also, "Wildcard"

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Miscellaneous Exemptions Under Federal Non-Bankruptcy Law

Miscellaneous Exemptions -- Federal System § 522

Can New Jersey debtors use the Federal Bankruptcy exemptions instead of New Jersey exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

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Miscellaneous Exemptions in Other States

New Jersey Exemptions