The New Jersey Homestead Exemption

New Jersey does not have a homestead exemption, but you can use the federal homestead exemption. Married couples may have another option.

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:

  • how the federal homestead exemption works in New Jersey
  • how much the homestead exemption will cover, and
  • how to apply it in your bankruptcy case.

For more bankruptcy information, read Filing Bankruptcy in New Jersey. Not only will you find answers, but it includes helpful checklists and a link to an interactive bankruptcy quiz. Or, try the start-to-finish bankruptcy guide, What You Need to Know to File for Bankruptcy.

Homestead Exemption Available in a New Jersey Bankruptcy

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 without the use of an exemption. However, this area is tricky.

Talk with a local bankruptcy attorney before filing to ensure that you don't lose valuable property and learn about other filing considerations for spouses.

Federal Homestead Exemption

New Jersey Homestead Exemption

Homestead exemption amount

$25,150

$0

Can spouses who file a joint bankruptcy double the exemption?

$50,300 is available to spouses who co-own property.

Not applicable.

Homestead exemption law

11 U.S.C. § 522(d)(1)

Not applicable.

Other information

Amounts will adjust on April 1, 2022.

None.

Compare other federal and state exemptions.

Federal Bankruptcy Exemptions

New Jersey Bankruptcy Exemptions

Claiming the Federal Bankruptcy Homestead Exemption in New Jersey

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, if you choose to use the federal bankruptcy exemptions, when filing for bankruptcy, 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.

Timing Your New Jersey Bankruptcy

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.

Need More Help?

You might not know this, but Nolo has been making the law easy for DIYers for over fifty years. If you have questions, use the links we've included throughout for more details. Otherwise, you'll find the answers to almost all of your bankruptcy questions at nolo.com/legal-encyclopedia/bankruptcy or by consulting with a local bankruptcy lawyer.

This overview cannot provide all of the information you'll need to file a bankruptcy case. For more detailed information, consider buying a self-help book such as How to File Chapter 7 Bankruptcy by Attorney Cara O'Neill and Albin Renauer J.D.

Updated July 20, 2021

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