Bankruptcy

New Jersey Bankruptcy Exemptions

In this state, you have an option to use the federal set of exemptions instead of the New Jersey bankruptcy exemptions. However, it is important to note that federal supplemental exemptions can be used in conjunction with the state-specified exemptions only. New Jersey is the only state in the United State of America that does not offer any homestead exemption to debtors. Besides that, you are also not allowed to exempt any property under two more categories that include ‘wild card’ and ‘tools of trade’.

Wages

You can exempt seventy five percent of any unpaid but earned wages that are more than 2.5 times the federal poverty level. Ninety percent can be exempted if the wages are less than 2.5 times the federal poverty level. However, New Jersey bankruptcy exemptions can be availed in full (100%) for wages or allowances of military personnel.

Public Benefits

Three types of public benefits are exemptible in full value, including old age or permanent disability benefits, unemployment compensation benefits, and workers’ compensation benefits.

Personal Property

- 100% can be exempted in burial plots and clothing.
- Up to $1000 can be exempted in household goods, including furniture
- Up to an additional $1000 (aggregate total) in Interest or stock in any corporation and any other property

Pensions

New Jersey bankruptcy exemptions are available in full value for the following types of pensions.

- Civil defense worker pensions
- State police pensions
- Street and water department employee pensions
- City board of health employee pensions
- Traffic officer pensions
- Firefighter’s pensions
- Police officers pensions
- Public employee pensions
- Municipal employee pensions
- City employee ERISA-qualified benefits
- County employee pensions
- Alcohol beverage control officer pension
- Prison employee
- Judge pensions
- School district employee pensions
- Teacher pensions
- Federal pensions
- High-education trust funds
- IRAs

Insurance

Up to $500 per month is exemptible in annuity payments. New Jersey bankruptcy exemptions however can be availed in full for the following types of insurance policies or proceeds.

- Civil defense worker hospital, medical, death, and disability benefits
- Military death and disability benefits
- Life insurance proceeds provided the debtor I not the insured or provided there is a specific clause in the policy contract that prohibits the use of proceeds to pay the debts that the beneficiary owes to different creditors.
- Other disability and health benefits
- Disability benefits

Homestead

Though no exemptions are available in this category, the state laws strictly prohibit creditors from taking any real property that belongs to a married couple (where only one spouse is a debtor) that holds it as a tenancy by the entirety. When both the spouses share equal rights of possessions or equal interest in the property, it is referred to as ‘tenancy by the entirety’.

For a more accurate evaluation on what types of New Jersey bankruptcy exemptions you actually qualify for depending upon the specific nature of your case, you should consider consulting an experienced New Jersey bankruptcy attorney.


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One Response to “New Jersey Bankruptcy Exemptions”

  1. scott says:

    Federal set of exemptions can be used in the state of New Jersey, if you do not want to use state specific exemptions you can go for it. New Jersey allows you to use federal supplemental exemptions with state specific exemptions only. New Jersey exemptions can be taken for the certain limit of earned wages and up to 100% for some allowances of military people. New Jersey does not allow using any wild card category and tools of trade category. Some specific exemptions are allowed for the specific categories which come under the personal property. Some types of pensions also fully exempted according to New Jersey state laws. Pensions can be exempted fully like state police pensions, teacher pensions etc.

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