New Jersey bankruptcy exemptions help you understand which items such as a house or car are at risk of losing if you file bankruptcy.
Unfortunately, bankruptcy exemptions in New Jersey are complex.
The purpose of this article is to present the New Jersey bankruptcy exemptions in an understandable format.
There is a list of exemptions for New Jersey, but it can be difficult to parse through. If you prefer to answer a simple set of questions, feel free to use the New Jersey bankruptcy exemptions calculator below to estimate which belongings are at risk.
Bankruptcy exemptions can help you keep specific belonging when filing Chapter 7 bankruptcy. In many states, there are bankruptcy exemptions that cover your home, vehicle, jewelry, tools of your trade, etc. The bankruptcy exemptions can also help guide your Chapter 13 plan payment.
Here’s a couple of things to note:
Below are some of the most common bankruptcy exemptions for New Jersey. Let’s get into the numbers. Please note the below is the best estimate at the time of writing, but check the actual legal text for the most accurate exemption data.
The homestead exemption is often broken down by age and whether you are married.
Single and under 65: $0
Single is 65 or older: $0
Married and under 65: $0
Married is 65 or older: $0
New Jersey specific homestead bankruptcy exemption text: “Survivorship interest of a spouse in property held as tenancy by the entirety is exempt from creditors of a single spouse” (Source)
The automobile bankruptcy exemption in New Jersey is $0.
The jewelry bankruptcy exemption in New Jersey is $0.
The tools of the trade bankruptcy exemption in New Jersey is $0.
The wildcard bankruptcy exemption in New Jersey is $0.
The personal property bankruptcy exemption in New Jersey is $1,000.
Below is specific special handling of bankruptcy exemptions in New Jersey.
Here are other common exemptions. There may be limits to the amount of the bankruptcy exemption, so please be sure to check each one individually.
Not covered here include less common exemptions such as illness benefits, firefighter pensions, retirements involving stock. However, we encourage you to research the official New Jersey legal text for more information.
You may have too much equity in a belonging, which makes you consider other options. For example, let’s say you own a boat outright that is valued at $100,000. With the wildcard exemption in New Jersey, you may be at risk of losing that vehicle.
There’s an opportunity to still do the Chapter 7 bankruptcy, but the trustee may liquidate the boat to pay off some of the creditors. You have a couple more prominent options:
The Chapter 13 Bankruptcy in New Jersey is called wage earner's bankruptcy where you pay a monthly payment plan. You would be set up on a 3 or 5-year plan that would be a set monthly rate based on what you can afford. This option is generally more expensive than a Chapter 7 after legal fees, but it is a valid option for many folks who are above the exemptions
Debt Settlement is where a company or you would negotiate a lower amount owed with the creditors directly because of the financial hardship that is preventing you from paying your bills. For example, a debt settlement company would try to negotiate a $10,000 credit bill down to $5,000. This option would still negatively affect your credit and there are fees associated with this option, but it is a valid option for many and can be quicker than a Chapter 13 bankruptcy depending on how aggressive you are with negotiating and paying off the debt.
Debt Management is where a company would negotiate a lower interest rate with your creditors because of financial hardship. For example, a debt management company would try to negotiate a credit card’s interest rate from 22% to 8%. This option is often the most expensive of the debt relief options and can work best for credit cards, but debt management is a valid option for many folks.
Understand what items you may lose when filing bankruptcy to help you make a more informed decision. The bankruptcy exemptions in bankruptcy exemptions calculator or reach out to us directly at support@tryascend.com if you have any questions.
