Most people want to know whether they can keep valuable property before filing for bankruptcy—especially a home. If you qualify to use a homestead exemption in a New Jersey bankruptcy, you can protect some or all of the equity in your house. In this article, we explain:
For more bankruptcy information, read Filing Bankruptcy in New Jersey.
New Jersey lets filers use either the federal exemption system or New Jersey's state exemption system, which is good news because New Jersey doesn't offer a state homestead exemption. However, you can't mix exemptions from both lists, so you'll want to select the system that will protect your most important assets.
To help you make an informed choice, we've listed the federal exemption amount below. We've also included links to more complete federal and state exemption lists so you'll have an easier time deciding which set will work best for you.
If you're married, keep in mind that spouses can double some exemption amounts, but not all. Also, if you hold property as tenancy by entirety with your spouse and one spouse files for bankruptcy—not both—the bankruptcy trustee might be prevented from using the property equity to pay off debts. However, this area is tricky. Before filing, talk with a local bankruptcy attorney to ensure that you don't lose valuable property and learn about other filing considerations for spouses.
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Federal Homestead Exemption |
New Jersey Homestead Exemption |
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Homestead exemption amount |
$27,900 |
$0 |
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Can spouses who file a joint bankruptcy double the exemption? |
$55,800 is available to spouses who co-own property. |
Not applicable. |
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Homestead exemption law |
11 U.S.C. § 522(d)(1) |
Not applicable. |
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Other information |
Amounts will adjust on April 1, 2025. |
None. |
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Compare other federal and state exemptions. |
In New Jersey, using the federal homestead exemption is automatic. You don't have to file a homestead declaration with the recorder's office to use the federal homestead exemption in bankruptcy.
Instead, you'll list your homestead exemption on Schedule C: The Property You Claim as Exempt when completing your bankruptcy forms. You can find out about other requirements you'll need to meet in Your Home in Chapter 7 or Your Home in Chapter 13.
You can file for bankruptcy in New Jersey after living there for more than 180 days. However, you must live in New Jersey much longer before using New Jersey exemptions (if that's the set you choose to use)—at least 730 days before filing, to be exact. Otherwise, you'd use the previous state's exemptions.
But suppose you lived in multiple states during the two years before filing for bankruptcy. In that case, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing. (11 U.S.C. § 522(b)(3)(A).) Learn more about filing for bankruptcy after moving to a new state.
Did you know Nolo has been making the law easy for over fifty years? It's true—and we want to make sure you find what you need. Below you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!
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We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.
Updated April 7, 2025