New Jersey Federal Bankruptcy Exemptions
Although a person files for bankruptcy and is able to wipe out most of his debts, the Code does not intend to leave a consumer with absolutely no assets. The majority of New Jersey Chapter consumer cases use the federal exemptions scheme provided by the United States Bankruptcy Code. New Jersey law provides for exemptions also but state exemptions in New Jersey are not quite as good as the Federal Exemptions. Since each debtor has the choice of which exemption schedule to use, most choose the federal exemptions. If the net value of your property is less than the amount of your permitted exemptions, your property will not be affected and all of your creditors will be wiped out. Many people are surprised to find out that they can keep all of their property and still wipe out or discharge all of their debt.
A listing of the Federal Exemptions used in the State of New Jersey is as follows:
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Property |
Allowable Exemption Amount under 11 U.S.C. Section 522 |
Section of § 522 Allowing Exemption |
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Home |
Value in Real property, home, mobile home, co-op, or burial plot: up to $20,200. Up to $10,125 of this amount may be used as a wildcard and applied to any kind of property. Thus if you do not use the $20,200 for Real Estate you can use the wildcard of $10,125 to protect any asset. |
(d)(1); (d)(5) |
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Insurance |
Life insurance policy (not yet matured) |
(d)(7) |
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Life insurance policy accrued dividends: up to $10, 755. You can have cash surrender value in Life Insurance policy up to this amount. |
(d)(8) |
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Any and all Unemployment, disability, and illness benefits. |
(d)(10)(C) |
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On a policy taken out from someone that the debtor depended upon, the entire amount that is necessary for support is exempt. |
(d)(11)C) |
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Child Support |
Any child support and alimony that is necessary for support. |
(d)(10)(D) |
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Pensions |
All amounts in retirement accounts that are tax exempt. Accounts such as 401(k)s, 403(b)s, SEP, SIMPLE IRAs, Erisa qualified pension plans are completely exempt. |
(b)(3)(C) |
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IRAs and Roth IRAs: up to $1,095,000 per person. |
(b)(3)(C) |
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Car |
Car or automobile up to $3,225 is exempt. |
(d)(2) |
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Household goods, furnishings, clothing, etc. up to $525 per item and up to $10,775 total. |
(d)(3) |
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Jewelry: up to $1,350. |
(d)(4) |
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Health aids: all. |
(d)(9) |
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Recovery for the wrongful death of a person on whom the debtor depended: all. |
(d)(11)(8) |
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Recoveries for personal injury (excluding amounts for pain and suffering and pecuniary loss): up to $20,200. |
(d)(11)(D) |
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Payments for lost earnings: all. |
(d)(11)(E) |
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Public Benefits |
Public assistance benefits: all. |
(d)(10)(A) |
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Social Security benefits: all. |
(d)(10)(A) |
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Unemployment compensation benefits: all. |
(d)(10)(A) |
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Veterans' benefits: all. |
(d)(10)(A) |
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Crime victim compensation: all. |
(d)(11)(A) |
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Tools of Your Trade |
Implements, tools, and books: up to $2,025. |
(d)(6) |
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Wages |
No exemption. |
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Wildcards |
Any property: up to $1,075. |
(d)(5) |
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Any property: up to $10,125 of the unused homestead exemption. |
(d)(5) |
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These exemptions are accurate as of the April 1, 2010.
In addition there are unlimited exemptions available for the following items:
Life Insurance Policy - Unmatured
Health Aides
Government Benefits: Social Security, Unemployment, Public Assistance
Veterens Benefits
Disability, Illness or Unemployment Benefits
Alimony and Child Support
Pensions
Crime Victims Compensation
Wrongful Death Payments
Life Insurance Payments Needed for Support
Lost Earnings Compensation Payments
Certain Retirement Accounts Defined by the Internal Revenue Code
