New Jersey Bankruptcy Law: Home and Car Exemptions

There are no New Jersey bankruptcy law exemptions.  New Jersey law allows you to claim the federal bankruptcy exemptions  for your home, car and personal items.  The federal bankruptcy exemptions are as follows:

• Homestead 21,625 for real property, including a co-op or mobile home
• $3,450 for a motor vehicle
• $550 per item for any household goods up to a total of $11,525
• Jewelry $1,450
• Tools of trade, books and equipment $2,175

However, your spouse’s survivorship interest is protected in property held as tenancy by the entirety in New Jersey and is exempt under New Jersey bankruptcy law from creditor’s trying to collect a debt against you.  If your home has a mortgage or you have a car loan, you would have to reclaim the debt or the property.  Otherwise, your bank could foreclose on your house and/or repossess your car.  It may be better for you to file for Chapter 13 bankruptcy if you have substantial assets and you want to keep them, including your home or car.  Chapter 13 allows you to enter into a reduced debt court-approved payment plan with your creditors.  It takes about 3-5 years for most people to complete the plan.  You should speak with a New Jersey bankruptcy attorney to find out which bankruptcy Chapter you should file under.

Debts that You Cannot Get Rid of in Bankruptcy

Bankruptcy will not eliminate certain debts such as:

• Alimony or spousal support
• Child Support
• Student loans
• State or federal taxes, except you may be able to discharge federal taxes 3 years or older
• Fraudulent debts
• Large purchases bought within 90 days of filing for bankruptcy
• Government fines or penalties

Filing for bankruptcy is serious, and should be used as a last resort only when your debts are overwhelming.  Other options may be to speak to a credit counselor or negotiate a debt reduction plan with your creditors.  If your mortgage debt is overwhelming, but your other debt is manageable, you may want to speak to your lender about obtaining a loan modification, modifying your existing mortgage by lowering your interest rate and extending your loan term to make your payments more affordable.  Your bankruptcy attorney will be able to advise you on the best options for your financial situation.    

Getting Legal Help in New Jersey

Bankruptcy laws and exemptions are complicated, and you should seek the advice of a New Jersey bankruptcy attorney if you are thinking about filing for bankruptcy.  The attorney can explain the laws to you, and answer your questions.  A bankruptcy attorney can assist you with filing a bankruptcy petition and can represent you in court.