New Jersey Bankruptcy Exemptions

Updated February 5, 2019

You won’t lose all of your assets when filing for bankruptcy in New Jersey. You can use New Jersey’s bankruptcy exemptions to protect property you’ll need to work and maintain a household, such as household furnishings, clothing, and a retirement account.

Your other choice—using the federal bankruptcy exemptions—could provide more protection, depending on the assets you own. This is especially true if you have equity in a home or vehicle because the New Jersey state statutes don’t have a homestead or motor vehicle exemption.

Learn more about filing a New Jersey bankruptcy case.

New Jersey Exemptions v. Federal Bankruptcy Exemptions

Some states, including New Jersey, allow residents to choose between the state and federal bankruptcy exemptions. You can’t protect property by using exemptions from both lists—you must pick the system that will work best for you. If you elect to use New Jersey’s state exemptions, the federal nonbankruptcy exemptions will be available to you, too.

Common New Jersey Bankruptcy Exemptions

Here are some of the more common exemptions in New Jersey. When reviewing them, you’ll want to keep these things in mind:

• Joint filing. Unless otherwise noted, when spouses file together in New Jersey, each spouse can claim the full amount of the exemption (informally called “doubling”) as long as each spouse has an ownership interest in the property.
• List and verify your exemptions. You must claim an exemption by listing it in the official bankruptcy forms. You might qualify for exemptions not included in this article, or be required to meet qualification requirements. Consulting with a local bankruptcy attorney is the best way to ensure that you’re protecting your assets.
• Legal citations. You’ll find each of the statutes in the New Jersey Statutes or the federal law.

New Jersey Homestead Exemption

None; however, survivorship interest of a spouse in property held as tenancy by the entirety is exempt from creditors of the other spouse.

New Jersey Motor Vehicle Exemption

None.

New Jersey Wildcard Exemption

2A:17-19 - You can protect up to $1,000 in general personal property.

Other New Jersey Exemptions

Personal Property

2A:17-19 – Clothing.

2A:17-19 – Stocks and interest in corporations.

2A:26-4 - Household goods and furniture up to $1,000.

45:27-21 - Burial plots.

Wages

2A:17-56 - 90% of earned but unpaid wages if your annual income is less $7,500. The percentage decreases if the filer’s income is higher.

38A:4-8 Military personnel wages and allowances.

Pensions

11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).

11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to maximum (amount changes).

A:9-57.6 - Civil defense workers.

18A:66-51 - Teachers.

18A:66-116 - School district employees.

25:2-1 – A trust containing personal property if it was created under federal tax law.

43:6A-41 - Judges.

43:7-13 - Prison employees.

43:8A-20 - Alcohol beverage control officers.

43:10-57 & 43:10-105 - County employees.

43:13-9 - City workers' ERISA-qualified benefits.

43:13-44 - Municipal employees.

43:15A-53 - Public employees.

43:16-7 & 43:16A-17 - Police officers, firefighters, and traffic officers.

43:18-12 - City boards of health employees.

43:19-17 - Street and water department employees.

53:5A-45 - State police.

Public Benefits

34:15-29 - Workers' compensation.

43:21-53 - Unemployment compensation.

44:7-35 - Old-age and permanent disability assistance.

52:4B-64 - Crime victims' compensation.

Insurance

A:9-57.6; App. A:9-57.6 - Civil defense workers' disability, death, medical or hospital benefits.

17:18-12 & 17B:24-8 - Health and disability benefits.

17B:24-6b - Life insurance proceeds, dividends, interest, loan, cash, or surrender value, if not the insured.

17B:24-7 - Annuity contract proceeds up to $500 per month.

17B:24-9 - Group life or health policy or proceeds.

17B:24-10 - Life insurance proceeds if policy prohibits use to pay creditors.

38A:4-8 - Military member disability or death benefits.

17:44B-1 - Fraternal benefit society benefits.

Other

42:1A-11 - Partnership property.

Add any applicable federal nonbankruptcy exemptions.

Nonexempt Property—Property You Can’t Protect With a New Jersey Exemption

Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:

• In a Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case will sell nonexempt property and distribute the proceeds to creditors. Find out more about the bankruptcy process and the Chapter 7 documents you'll need at each stage.
• In a Chapter 13 bankruptcy, it works differently. You can keep everything you own, but you’ll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through your Chapter 13 repayment plan.

You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?

Confirming New Jersey Exemptions

This list includes the majority of bankruptcy exemptions available in New Jersey, but not all. Specific exemptions could have qualification requirements, and amounts might have changed since this list was last updated. Check the New Jersey Statutes or with a local bankruptcy lawyer.

To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?