What You Can Keep and Still Permanently Discharge Debts
When you file for bankruptcy protection under Chapter 7, you can permanently rid yourself of certain debts, but there’s a tradeoff—you must relinquish some of your assets to the bankruptcy court. Those assets are then sold, with the proceeds being used to pay your creditors. You are entitled, however, to claim certain property as exempt and not subject to sale through the bankruptcy proceeding. There are specific exemptions under federal bankruptcy law, and New Jersey has its own list of exemptions. You may choose the federal exemptions or the state exemptions, but you cannot mix and match from the two.
New Jersey Bankruptcy Exemptions
Under New Jersey law, you cannot claim any exemption for the value of your home, even if you have some equity. In addition, New Jersey does not allow you to protect tools of your trade. Here’s an overview of the allowed exemptions under New Jersey bankruptcy law:
- You can claim as exempt any amount awarded to you by a court for workers’ compensation, unemployment benefits, permanent disability benefits, or restitution for a crime.
- Military pay of all active-duty members of the armed forces is exempt. Non-military individuals who make less than $7,500 can claim up to 90% of their wages as exempt.
- There is a $1,000 exemption per spouse for personal property, and a $1,000 exemption for furniture. All clothing is exempt.
- Stocks and personal interests in corporations are exempt.
- Burial plots are exempt.
- All tax-exempt retirement accounts are also exempt from bankruptcy.
Contact Attorney Howard N. Sobel
At the office of Howard N. Sobel, we work closely with people in New Jersey in personal bankruptcy filings. Contact our office online or call us at 856-424-6400 to set up a free initial consultation. We are currently available by phone, text message, or videoconference only. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.
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