New Jersey Bankruptcy Exemptions

New Jersey's bankruptcy exemptions allow you to protect property in Chapter 7 bankruptcy.

If you file for Chapter 7 bankruptcy in New Jersey, you can protect some or all of your property with New Jersey’s bankruptcy exemptions. The bankruptcy exemptions in New Jersey also play a role in a monthly Chapter 13 bankruptcy payment. Read on to learn about property covered by New Jersey’s bankruptcy exemptions.

For a general overview of bankruptcy exemptions, see Bankruptcy Exemptions.

Debtors in New Jersey Can Choose Between State and Federal Exemptions

New Jersey is one of the few states that allow debtors to choose between state and federal bankruptcy exemptions. Bankruptcy filers can examine both sets and elect the exemptions that better protect their assets, but they can't mix and match between the two exemption schemes.

Common New Jersey Exemptions

Here are some of the most common exemptions available under New Jersey law:

Cemeteries and Burial Funds

All cemetery property is 100% exempt. In addition, lands held for burial purposes by a cemetery company, charitable religious or fraternal organization and the trust funds and securities and income of any cemetery property are 100% exempt. N.J. Stat. Ann. §§ 8A:5-9, 8A:5-10, 8A:5-11.

Crime Victims’ Compensation

A debtor’s crime victims’ compensation is 100% exempt but does not include expenses resulting from the injury that is the basis for the claim. N.J. Stat. Ann. § 52:4B-18.

Homestead or Residential Property

New Jersey does not have a homestead exemption. However, the survivorship interest of a spouse in property held as tenancy by the entirety is exempt from creditors of the other spouse. 11 U.S.C. § 522(b)(3)(8).

For more details about how to protect your homestead or residential property in New Jersey, see The New Jersey Homestead Exemption.

Insurance Benefits

A debtor may exempt the following insurance benefits:

  • Life insurance proceeds are exempt if a clause in the insurance policy prohibits proceeds from being used to pay the beneficiary’s creditors. Life insurance proceeds in favor of a person other than the insured are exempt from both the debts of the insured and the beneficiary.
  • Up to $500 a month in annuity benefits, unless the annuity was fraudulently obtained.
  • Proceeds of health insurance, disability provisions in life insurance contracts, and other disability benefits are exempt. This exemption does not include claims for necessities contracted for during the period of disability.
  • Proceeds of group life and group health insurance are exempt. This does not include claims for necessities contracted for during a period of disability.

N.J. Stat. Ann. § § 17:18-12, 17B:24-6, 17B:24-7, 17B:24-8, 17B:24-9.

Motor Vehicles

New Jersey does not have a specific motor vehicle exemption. You may, however, exempt up to $1,000 in equity in your car or another vehicle by using the general personal property exemption.

To learn more about exempting equity in your car in New Jersey Motor, see The New Jersey Motor Vehicle Exemption in Bankruptcy.

Pension and Retirement Benefits

Public employees’ pensions are 100% exempt. N.J. Stat. Ann. § 43:15A-53. Also exempt are pensions for teachers, judiciary members, prison employees, alcohol control officers, city employees, county workers, probation officers, court interpreters, police officers, and firefighters. N.J. Stat. Ann. §§ 18A:66-51, 18:13-112.53, 18A:66-116, 18:5-80, 43:6A-41, 43:7-13, 43:8A-20, 43:10-14, 43:13-9, 43:13-22.60, 43:10-18.22, 43:10-18.71, 43:10-57, 43:10-105, 43:13-37.5, 43:13-44, 43:15A-53, 43:18-12, 43:19-17, 43:16-7, 43:16A-17, 53:5A-45.

Personal Property

You may exempt the following personal property:

  • clothing is 100% exempt
  • up to $1,000 in household goods and furnishings, and
  • pay and benefits owed to a debtor for participating in the state militia.

N.J. Stat. Ann. § § 2A:17-19, 2A:26-4, 38A:4-8.

Public Assistance

Old age assistance is 100% exempt. N.J. Stat. Ann. § 44:7-35.

Tenancy by the Entirety

Tenancy by the entirety is not exempt but is subject to rights of the non-debtor spouse. See King v. Greene, 30 N.J. 395, 153 A.3d 49 (1959).

Unemployment Compensation

Unemployment compensation is 100% exempt. N.J. Stat. Ann. § § 43:21-15, 43:21-53.

Wildcard Exemption

You may exempt up to $1,000 of any personal property, stocks, or corporate interests. N.J. Stat. Ann. § § 2A:17-19. (To learn more, see The New Jersey Wildcard Exemption.)

Workers’ Compensation

Workers’ compensation is 100% exempt. N.J. Stat. Ann. § 34:15-29.

Confirming the Status of New Jersey’s Bankruptcy Exemptions

New Jersey’s exemption amounts are adjusted periodically. To make sure you have the most recent figures, be sure to check for any updates at the official website of the New Jersey Legislature at (Go to "Laws and Constitution" in the left-hand column and click on "Statutes.")

For more information on how to research and find the latest exemption amounts, see our Legal Research Center.

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