New Jersey Bankruptcy Exemptions

For many who file for bankruptcy, bankruptcy exemptions are the most important aspect of the process. Under a Chapter 7 bankruptcy, exemptions are those assets that a person’s bankruptcy trustee cannot sell to pay back creditors. In other words, exemptions protect property, so it is to your benefit to use exemptions as fully as possible.

Bankruptcy filers have two choices for bankruptcy exemptions either the state or the federal ones. Some states opt out of the federal exemptions and require their residents to use the state ones, but New Jersey is one of the states that allows its residents to choose either New Jersey state bankruptcy exemptions or the federal ones. Deciding which set of exemptions to use is an important decision, as the state exemptions may protect property that the federal ones do not and vice versa. A Morris County bankruptcy lawyer can help you make the best bankruptcy decision for your situation.

New Jersey Bankruptcy Exemptions

Below are some of the bankruptcy exemptions available under New Jersey law:

  • All disability and health benefits
  • All pensions
  • All clothing
  • Personal property and company stock up to $1,000
  • Furniture and other household goods up to $1,000
  • All public benefits such as workers’ compensation or unemployment benefits
  • Wages unpaid but already earned (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)


The following are some of the federal bankruptcy exemptions that a New Jersey resident may opt for instead of the state exemptions:

  • Up to $18,450 in a house or real property (this is the biggest difference between the state and federal exemptions, as there is no state exemption for a home)
  • Spousal and child support money
  • All pensions
  • Jewelry up to $1,225
  • Motor vehicles up to $2,950
  • All public benefits such as workers’ compensation or unemployment benefits
  • Tools of the trade (items used in your business) up to $1,850
  • Wild card exemption up to $925 plus an additional $9,250 of any unused portion of the home exemption

Any property that exceeds an exemption amount will transfer to the bankruptcy trustee who will then sell that property in order to pay back your creditors. The trustee will look closely at any property that you claim is exempt, which is why it is important to file exemptions and value property in an accurate and detailed manner. To learn more about using bankruptcy exemptions to your advantage, contact a Morris County bankruptcy attorney at Ast & Schmidt, PC.

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