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If you're filing bankruptcy in New Jersey, one of the first questions is:
“Will I lose my home, car, or other property?”
That’s where bankruptcy exemptions come in.
Bankruptcy exemptions determine:
This guide breaks down how exemptions work in New Jersey and what you can realistically expect.
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 allow you to protect certain property when filing bankruptcy.
These apply to:
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 impacted by whether you are married.
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 the 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, and retirement 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, prompting you to 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 still an opportunity to file Chapter 7 bankruptcy, but the trustee may liquidate the boat to pay some creditors. You have a couple more prominent options:
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 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 negotiates a lower interest rate with its 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 the bankruptcy exemptions calculator or reach out to us directly at support@tryascend.com if you have any questions.
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