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New Jersey Bankruptcy Exemptions for 2019


(Portions reprinted by permission from How to File for Chapter 7 Bankruptcy, Nolo © 1989-2019 )

New Jersey Bankrupcty Exemptions Summary

(details below...)

Federal Bankruptcy Exemptions Also Available
(see below)

Homestead

None, but survivorship interest of a spouse in property held as tenancy by the entirety is exempt from creditors of a single spouse   (more...)

Auto/Truck (aka Motor Vehicle)

no specific exemption   (more...)

Personal Property

Personal property & possessions of any kind, stock or interest in corporations to $1,000 total
Clothing
Furniture & household goods to $1,000    (more...)

Wild Card

None (see personal property)   (more...)

Wage Garnishment Law

90% of earned but unpaid wages if annual income under 250% of the poverty level for family size; 75% if annual income is more than that amount
Wages or allowances received by military personnel   (more...)

More New Jersey Exemptions...

[Click here for more info & citations...]

Disclaimer

Disclaimer

Citations and links to primary law and secondary sources are provided for those who wish to do further research. Every effort has been made to make this information up to date and accurate, but laws can and do change without notice. Persons relying on this information are responsible for confirming its timeliness and accuracy before relying on it. (This information was updated for April 2019.)

Also bear in mind that these brief summaries do not list every detail or exception to these exemptions. For example, there are often exceptions for collection of child support debt and/or taxes. These listings are designed to inform you of laws that exist for your benefit, so that you may exercise what rights you may have.

Finally, this website is intended to provide information only. It cannot answer whether your property does or does not qualify for a specific exemption.

more...  

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New Jersey Homestead | Insurance | Retirement | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |

New Jersey Bankruptcy Exemptions

New Jersey Offers a Choice of Federal or State Exemptions

New Jersey law allows you to use the exemptions found in the U.S. bankruptcy code (11 U.S.C. § 522(d)) or the exemptions provided under New Jersey law. However, you cannot mix and match exemptions from the federal bankruptcy code and state law. You must choose one system or the other.

However, if you use the state law exemptions, there are a few U.S. 'non-bankruptcy' exemptions (that is, exemptions that exist outside of federal bankruptcy code) that you can use in addition to your state law exemptions. The four most significant non-bankruptcy exemptions are for:

  • Wages (a general cap on what percentage of your wages can be garnished)
  • Social Security benefits
  • Civil Service benefits, and
  • Veterans Benefits

Other non-bankruptcy exemptions mostly deal with various benefits to government and military personnel, with a few odd laws regarding specially regulated labor markets such as railroad workers, merchant sailors, and longshoremen.

NOTE: Federal Exemption amounts listed below reflect the April 1, 2019 adjustment for inflation every three years, and therefore do not match the figures shown in the federal exemption statutes. Click here for the April 1, 2019 inflation adjustments to Federal bankruptcy exemption amounts, published in the Federal Register.

Can you double exemptions for joint filers? (General principles)

If you are married and filing together, you and your spouse must use the same law; one cannot use federal law while the other uses state law. However, the exemption law chosen applies separately to each spouse. Thus, it is generally possible to double the amount of state law exemptions, Cheeseman v. Nachman, 656 F.2d 60 (4th Cir. 1981) (married couple filing a joint petition was entitled to double the Virginia homestead exemption), unless state law (e.g. California) specifically prohibits a couple from doubling certain exemptions. See First National Bank v. Norris, 701 F.2d 902 (11th Cir. 1984)(Alabama); Granger v. Watson, 754 F.2d 1490 (9th Cir. 1985)(California).

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New Jersey Homestead Exemption

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Yahoo Real Estate offers comparable home sales in your neighborhood.

Almost every state provides protection for equity in the family home, and many states have increased the amount of protection in recent years. Seven states offer unlimited protection. Most states are not as generous.

New Federal Residency Requirement

Under the new bankruptcy law, you must be have lived in the state for at least 40 months (three years and four months) before you can claim any homestead protection greater than $160,375. (If your state's exemption offers less than this amount, the law is irrelevant to you.) The law is poorly worded but seems to say that if you move from one home to another in the same state, you can claim that state's homestead protection.

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

Federal Exemptions

  • Real property, including co-op or mobile home, or burial plot to $25,150; unused portion of homestead to $12,575 may be applied to any property
    11 U.S.C. 522 (d)(1), (d)(5)




    (retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986)
    (For assets in individual retirement accounts described in section 408 or 408A of the Internal Revenue Code of 1986, other than a simplified employee pension under section 408(k) of such Code or a simple retirement account under section 408(p) of such Code)









    (Earned Income Tax Credit is federal no local, so not exempt)








New Jersey Exemptions

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Tenancy by Entirety Exemption

Tenancy by the Entirety (TBE) is a form of property ownership, based on traditional English common law, that is still recognized in about 1/2 of states and the most common form of martial property ownership in many of them.

It protects property that is jointly owned by a married couple as an "entirety" -- which is to say, as a single marital entity, not as individuals.

Tenancy by the Entirety (TBE) was originally conceived as a debt shield -- a way of protecting wives and children from being left homeless and penniless as a result of the debts of a husband. Under the English common law TBE doctrine, a husband could not sell property owned by "the entirety", or give it away, or pledge it as security for a loan without the consent of his wife.

Today, 25 states still recognize some form of tenancy by the entirety, but they differ on the extent to which the property is exempt.

Special notes about New Jersey Tenancy by the Entirety Exemptions: New Jersey recognizes TBE, but debtors individual interests may be reached by creditors. However, non-debtor spouse retains ownership rights, including posession.

Federal Exemptions

New Jersey Exemptions

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New Jersey Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


New Jersey Insurance exemptions

Virtually all states protect life insurance proceeds in some manner or another. Some restrict it to proceeds paid to a dependent. Many states also protect the cash-value or loan-value of insurance policies.

If a substantial amount of your assets are in life insurance, you may want to consult a professional to determine the extent to which those policies are exempt. The website AssetProtectionBook.com does particularly thorough job of covering New Jersey insurance exemptions.

Federal Exemptions

New Jersey Exemptions

  • Annuity contract proceeds to $500 per month
    N.J. Stat. Ann. 17B:24-7
  • Disability benefits
    N.J. Stat. Ann. 17:18-12
  • Disability or death benefits for military member
    N.J. Stat. Ann. 38A:4-8
  • Disability, death, medical, or hospital benefits for civil defense workers
    N.J. Stat. Ann. App. A:9-57.6
    N.J. Stat. Ann. App. A:9-57.2
  • Fraternal benefit socieity benefits
    N.J. Stat. Ann. 17:44B-1
  • Group life or health policy or proceeds
    N.J. Stat. Ann. 17B:24-9
  • Health or disability benefits
    N.J. Stat. Ann. 17B:24-8
  • Life insurance proceeds if clause prohibits proceeds from being used to pay beneficiary's creditors
    N.J. Stat. Ann. 17B:24-10
  • Life insurance proceeds or avails if you're not the insured
    N.J. Stat. Ann. 17B:24-6 (b)

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New Jersey Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


Miscellaneous other exemptions for New Jersey

This category covers items like partnership property, alimony & support payments.

Federal Exemptions

New Jersey Exemptions

  • Partnership property
    N.J. Stat. Ann. 42:1A-11

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New Jersey Pensions & Retirement Savings Exemptions

The new federal bankruptcy law now automatically exempts a virtually all tax-exempt pensions and retirement savings accounts from bankruptcy, even if you are using state law exemptions. 11 U.S.C. § 522(b)(3)(C). (See Help Topic: Special Rules For Retirement Accounts.)

The law protects up to $1,283,025 of any pension or retirement fund that qualifies for special tax treatment under Internal Revenue Code sections 401, 402, 403, 408, 408A, 414, 457, or 501(a).

Federal Exemptions

  • All types of retirement funds and accounts that tax-exempt under IRC section 401, 403, 408, 408A, 414, 457, or 501(a) ; IRAs & Roth IRAs limited to $1,362,800 (excluding rollover contributions); limitation can be overidden by judge.
    11 U.S.C. 522 (d)(12)
    11 U.S.C. 522 (n)

New Jersey Exemptions

  • Alcohol beverage control officers
    N.J. Stat. Ann. 43:8A-20
  • City boards of health employees
    N.J. Stat. Ann. 43:18-12
  • Civil defense workers App. A:9-57.6
    N.J. Stat. Ann. App. A:9-57.6
  • County employees
    N.J. Stat. Ann. 43:10-105
    N.J. Stat. Ann. 43:10-57
  • ERISA-qualified benefits for city employees
    N.J. Stat. Ann. 43:13-9
  • Firefighters, police officers, traffic officers
    N.J. Stat. Ann. 43:16A-17
    N.J. Stat. Ann. 43:16-7
  • IRAs
    In re Yuhas, 104 F.3d 612 (3rd Cir. 1997)
    Hill v. Dobin, 358 B.R. 130 (D.N.J. 2006)(Declined to Extend Yuhas)
  • Judges
    N.J. Stat. Ann. 43:6A-41
  • Municipal employees
    N.J. Stat. Ann. 43:13-44
    N.J. Stat. Ann. 43:13-9
    N.J. Stat. Ann. 43:13-37.5
  • Prison employees
    N.J. Stat. Ann. 43:7-13
  • Public employees
    N.J. Stat. Ann. 43:15A-53
  • School district employees
    N.J. Stat. Ann. 18A:66-116
  • State police
    N.J. Stat. Ann. 53:5A-45
  • Street & water department employees
    N.J. Stat. Ann. 43:19-17
  • Teachers
    N.J. Stat. Ann. 18A:66-51
  • Trust containing personal property created pursuant to federal tax law, including 401(k) plans and higher education (529) savings plans, IRAs, Roth IRAs Excluded from bankruptcy estate
    N.J. Stat. Ann. 25:2-1

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New Jersey Personal Property Exemptions

Auto Valuation Tools:

Kelley Blue Book

Edmunds

Both of these websites offer interactive tools to determine the current value of your used car.

This category covers your car, your non-retirement bank accounts, and most of your other personal possessions, other than your house.

States vary widely on how generous they are in this area. Some exemptions may be for any combination of property up to an aggregate amount. Other exemptions apply only to specific items, such as jewelry.

Remember that an exemption will not protect your car from being repossessed by the holder of the car loan you used to purchase the vehicle if you pledged the vehicle as security for the loan. To keep the car, you will have to pursue other options such as 'redemption' or 'reaffirmation.' See the help topics and How to File for Chapter 7 Bankruptcy for more on this.

Federal Exemptions

New Jersey Exemptions

  • Burial plots
    N.J. Stat. Ann. 45:27-21
  • Clothing
    N.J. Stat. Ann. 2A:17-19
  • Furniture & household goods to $1,000
    N.J. Stat. Ann. 2A:26-4
  • Personal property & possessions of any kind, stock or interest in corporations to $1,000 total
    N.J. Stat. Ann. 2A:17-19

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New Jersey Public Benefits Exemptions

Most states exempt public benefits, consistent with the notion that such benefits are intended as a safety net for the recipient.

Federal Exemptions

New Jersey Exemptions

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New Jersey Tools of Trade Exemptions

These are the things you use to make a living. An automobile or truck can be a tool of trade if you use it as such. Commuting to work doesn't count, but if driving is a necessary component of transacting your business, you can claim your vehicle is a tool of trade.

Federal Exemptions

New Jersey Exemptions

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New Jersey Wage Garnishment Laws

Most states have a wage garnishment law. In some states, wage garnishment laws can be used in bankruptcy as an exemption to protect income that you had coming due, but not yet received, as of the day you filed, for work you had already done -- so called "earned but unpaid wages".

In some states, the wage garnishment law protects not only wages owed to you, but also wages already in your possession and saved over time preferably holding it in a separate bank account. In other states wage garnishment laws do not protect wages once they are they are in your possession.

There is a federal wage garnishment protection found in the CCPA (Consumer Credit Protection Act), 15 U.S.C. § 1673, which limits how much of your pay can be taken for collection purposes. But this law law is generally found not to be an exemptions in bankrupty. See, e.g. IN RE HORTON, Case No. 10-53495., Bankr. ED Kentucky, 3/4/2011

Some courts have also held that some state wage garnishment laws do not create an exemption in bankruptcy. See, eg. Utah, Tennessee, Vermont, Missouri.

Other courts have held that state garnishment statutes DO create an exemption. See, e.g., Oregon, Iowa, Ohio, Kansas, Indiana.

And in Illinois there are recent published bankruptcy court opinions going both ways on the issue of whether Illinios wage garnishment law can be used as an exemption in bankruptcy.

Click here for collected case law on the question: Do wage garnishment laws create an exemption in bankruptcy?

Finally, if you live in a state that lets you use the Federal bankruptcy exemptions in 522(d), and you choose to use them, then you get no exemption for earned but unpaid wages; the wildcard exemption is your only option. See, e.g. U.S. v. Christensen, 200 B.R. 869 (D.S.D. 1996) (applying FDCPA law, based on similar statutory structure to bankruptcy's opt-out law)

Federal Exemptions

New Jersey Exemptions

  • 90% of earned but unpaid wages if annual income under 250% of the poverty level for family size; 75% if annual income is more than that amount
    N.J. Stat. Ann. 2A:17-56
  • Wages or allowances received by military personnel
    N.J. Stat. Ann. 38A:4-8

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New Jersey Homestead | Insurance | Pensions | Personal Property | Public Benefits | Tools of Trade | Wage Garnishment | Wild Card |


New Jersey Wild Card Exemption

Most, but not all, states allow a so-called "wild-card" exemption that can apply to any property. The wild card exemption can be of particular help if one or more of your other exemptions falls short of protecting your equity. You may split your wild card exemption amount over multiple items and stack it atop other exemptions as needed to protect exposed equity.

Federal Exemptions

New Jersey Exemptions


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