Bankruptcy Exemptions in New Jersey

Bankruptcy Exemptions in New Jersey

There are a variety of NJ bankruptcy exemptions available to those filing for bankruptcy in the state. These exemptions are an essential aspect of the bankruptcy process because they protect your property from creditors. This blog will educate you on the various New Jersey bankruptcy exemptions.

You have two choices when filing for bankruptcy in New Jersey. When you file bankruptcy, you can choose between using the state exemptions or federal exemptions. In some states, you can only use the state’s bankruptcy exemptions. In New Jersey, you can choose either, but they must be all state or all federal – you can’t “mix and match.” Deciding which set of exemptions to use is an important decision. Federal exemptions are almost always more favorable.

New Jersey Bankruptcy Exemptions

The following exemptions are available in New Jersey:

Disability and Health Benefits

Falling under the category of insurance, disability, and health benefits are one of the many NJ bankruptcy exemptions you can receive. Exemptions are available for any health or disability benefits. Life insurance proceeds if the filer is not insured. Exemptions can also include group life or health policies or proceeds, disability or death benefits for military members, disability, death, medical or hospital benefits for civil defense workers. 

Pensions

The following NJ bankruptcy exemptions can be made on pensions. Pension exemptions include IRA’s, Roth IRA’s 401(k) plans, higher education savings plans & qualified benefits for city employees. Under NJ bankruptcy exemption law exemptions can also be made for the following occupations, Alcohol beverage control officers, city board employees, civil defense workers, county workers, firefighters, police officers, traffic officers, judges, municipal workers, prison employees, public workers, school district employees, state police, street and water department workers, and teachers.

Clothing

Your personal property, such as clothing, is considered a NJ bankruptcy exemption. Your clothing can be exempt fully or up to the amount given to you.

Personal property and company stock up to $1,000 & furniture and other household goods up to $1,000

Just like clothing, this personal property can also be exempted. Up to $1,000 in personal property, company stock, furniture, and household goods can be claimed as an exemption in the state of New Jersey. 

Public Benefits 

NJ bankruptcy exemptions also include public benefits such as workers’ compensation, unemployment benefits, and permanent disability or old age assistance.

Wages 

Wage exemptions include unpaid but already earned income (if your income is more than 250% of the federal poverty level, you receive 75% of the income; you receive 90% of the income if it is below the 250% level). Wages or allowances received by military personnel are also exempt.

Federal Bankruptcy Exemptions

In addition to NJ bankruptcy exemptions, there are also a variety of federal bankruptcy exemptions one can receive. Below is a list of the federal bankruptcy exemptions that a New Jersey resident may use instead of the state exemptions:

    • Up to $25,150 in your residence (there is no state exemption for a residence)
    • Spousal and child support money
    • Pensions
    • Jewelry valued at up to $1,700
    • Motor vehicles valued at up to $4,000
    • Public benefits such as workers’ compensation or unemployment benefits
    • Items used in your business valued at up to $2,525
    • Wild card exemption up to $1,325 plus an additional $12,575 of any unused portion of the home exemption

I can guide you in choosing which exemption is best for your situation. To learn more about using bankruptcy exemptions to your advantage, contact me for a free consultation.