New Jersey Bankruptcy Exemptions

What are Bankruptcy Exemptions?

Exempt property is personal property you are permitted to retain after filing for bankruptcy in New Jersey. In the event that your property is secured by a loan, like a car loan or mortgage, and you are current on those payments, any equity that you have in that asset may be covered by exemptions, allowing you to keep making payments on the loan and retain the property through the bankruptcy proceeding.

Your creditors or trustee of your bankruptcy filing can object to any of your claimed exemptions within thirty (30) days after the Meeting of Creditors (a.k.a. the “341 Meeting”). New Jersey is one of fourteen (14) states that allow you to elect either the state or federal bankruptcy exemptions. The proper utilization of the bankruptcy exemptions under the Bankruptcy Code are very important in that they may enable you to protect some or all of your assets in the event of a New Jersey bankruptcy filing.

NJ Bankruptcy Exemptions & Federal Bankruptcy Exemptions

New Jersey bankruptcy exemptions include household furniture and goods totaling $1,000, disability benefits, retirement benefits, workers compensation benefits and personal property totaling $1,000. In addition to New Jersey bankruptcy exemptions, there are also federal bankruptcy exemptions that apply as well. The federal bankruptcy exemptions per debtor include a home or residence in the amount of $21,625, a car in the amount of $3,450, household furnishing in the amount of $11,525, jewelry in the amount of $1,450, personal injury settlements and awards in the amount of $21,625, life insurance loan value in the amount of $11,525 and wild card exemptions in some cases which can equal $11,975.

When filing for bankruptcy and utilizing exemptions, one must choose either the New Jersey exemptions or the federal exemptions. The State of New Jersey does not have what is known as a “Homestead” exemption. Therefore, those filing for bankruptcy in New Jersey are able to utilize the federal Homestead exemption of up to $21,625 for real property, including a co-op, mobile home or burial plot. In the event a residence has less than $20,200 in equity, it is exempt from being seized by the Bankruptcy Court.

Bank Accounts and College Tuition are Exempt in NJ Bankruptcy

Under federal law, all retirement accounts are protected from seizure in a bankruptcy proceeding. New Jersey also has an exemption for bank accounts and college tuition. In all probability, the federal exemption will allow you to retain more of your property than the New Jersey exemptions. An important fact to remember is that the federal bankruptcy exemptions can be doubled if you are filing bankruptcy jointly with your spouse.

Contact an Experienced Bankruptcy Lawyer About NJ Bankruptcy Exemptions

Bankruptcy law is quite complex.  If you are considering filing for bankruptcy in Ocean County or Monmouth County, New Jersey, it is recommended that you seek the advice of a knowledgeable Toms RiverPoint Pleasant or Wall Township bankruptcy attorney in order to determine how you can best benefit from the proper utilization of the exemptions that you are entitled to. The most important thing to remember about bankruptcy exemptions is that the debtor is entitled to retain possession of any exempt asset in the bankruptcy so long as the value of that asset does not exceed the value of the exemption that the debtor is entitled to.

Should you have any questions about the bankruptcy process or more specifically the exemptions you may be entitled to if you file for bankruptcy in New Jersey, call the bankruptcy attorneys at Villani & DeLuca today for your free bankruptcy consultation. Contact an experienced NJ bankruptcy lawyer by calling (732) 965-3390 today!