What Are the New Jersey State Exemptions in a Chapter 7 Bankruptcy?
As a consumer, when filing for bankruptcy protection, you can seek to reorganize your debt under Chapter 13 or, if you qualify, you can permanently rid yourself of some of your obligations through Chapter 7. If you meet the requirements to discharge your debts under Chapter 7, you’ll also have to relinquish property to be sold by the bankruptcy trustee, with the proceeds going to your creditors.
What Exemptions Are Available in a New Jersey Chapter 7 Bankruptcy Filing?
A person filing for Chapter 7 protection can claim exemptions under either state law or federal law, but not both. As a general rule, for people filing in New Jersey, the federal exemptions protect more property and are typically recommended. Here are some key differences between the New Jersey and federal exemptions:
- The homestead exemption— This protects the value of your home. Unlike most states, New Jersey does not offer any type of homestead exemption. Under the federal exemptions, you can protect up to $27,900 in equity in your principal residence.
- The motor vehicle exemption— Likewise, New Jersey does not have a specific exemption for the value of a car, truck, or motorcycle. You can exempt up to $4,450 of the value of your vehicle under the federal exemptions.
- Personal property— New Jersey allows a $1,000 exemption for personal property, which may include value in a vehicle or other types of personal property. The federal exemptions allow a maximum of $700 per item, with a total personal property exemption of up to $14,875. You can also claim up to $1,875 for jewelry, $2,800 for tools of your trade, and exemptions for health aids.
- The “wildcard” exemption— New Jersey offers a $1,000 “wildcard” exemption, which may be used for any personal property, investments, or corporate interests. The federal exemption, which can be used in New Jersey, is $1,475 plus any unused portion of your federal homestead exemption, up to a maximum of $13,950. If you are filing jointly with a spouse, that amount is doubled.
Contact Attorney Howard N. Sobel
At the office of Howard N. Sobel, we provide personal bankruptcy counsel to people throughout the state of New Jersey. Contact our office online or call us at 856-424-6400 to set up a free initial consultation. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.
