All You Need to Know About NJ Bankruptcy Exemptions

What Are Bankruptcy Exemptions in New Jersey?

When debts become overwhelming, filing for bankruptcy can be an excellent option to get a fresh start.

However, bankruptcy can be a daunting process, especially if you’re unfamiliar with state laws and regulations.

Filing for bankruptcy doesn’t mean the debtor must give up everything to cover their debts. Certain properties can be claimed as “exempt” from bankruptcy proceedings. That means the exempt property is not considered a part of a bankruptcy estate. It also can’t be used to pay back creditors.

In other words, bankruptcy exemptions are the assets you can keep despite filing for bankruptcy. The exemptions vary from state to state. That being said, bankruptcy exemptions can include:

  • Personal property
  • Investments
  • Bank accounts

It is important to note that the list is not exhaustive. We’ll explore the bankruptcy exemptions in New Jersey in this article.

Struggling With New Jersey Bankruptcy? Law Offices of Scott J. Goldstein Can Help

Bankruptcy proceedings can be challenging for people, especially regarding exemptions. Exemptions provide crucial protection for individuals filing for bankruptcy. By keeping certain assets, they can bounce back from their situation quicker.

In New Jersey’s bankruptcy system, exemptions are essential to the process. Understanding them can make a huge difference in how you approach your case. By learning more about them, you can make the best decisions in your bankruptcy case. In addition, an experienced personal bankruptcy attorney can help you navigate the complex system and achieve the most favorable outcome possible.

For more questions about New Jersey bankruptcy exemptions, contact the Law Office of Scott J. Goldstein and schedule a free consultation.

How Do I Determine Which Exemptions Apply to My Case?

Exemptions depend on individual circumstances. These circumstances can include the type of bankruptcy you’re filing for and the assets you have.

You must first understand that New Jersey does not have a homestead exemption, which means that you cannot exempt any part of your home’s value. It is also not possible to exempt motor vehicles or tools of the trade.

State exemptions protect a portion of earned but unpaid wages in certain cases. However, military wages are exempt in full.

The following property and benefits are also protected in full:

  • Clothing
  • Crime victims’ compensation awarded by the court
  • Unemployment compensation
  • Military personnel disability or death benefits
  • Civil defense workers’ disability, medical, or death benefits
  • Group life or health policy
  • Life insurance proceeds if the policy forbids its use to pay creditors

The complete list of New Jersey exemptions is long and can be challenging to comprehend. In some cases, the rules are very specific.

A bankruptcy attorney can help you determine which exemptions apply to your case. So, consulting one can be beneficial for your case. The attorney can also help you avoid common mistakes made before filing for bankruptcy.

How Can Someone Claim Bankruptcy Exemptions?

Bankruptcy exemptions are claimed on the Schedule C form. It is one of the forms you must submit to the bankruptcy court as part of a bankruptcy case. It lists all of the properties you claim as exempt. For each item, the amount of the exemption has to be specified.

Types of Bankruptcy in New Jersey

Two common types of bankruptcy for individuals in New Jersey include:

  1. Chapter 7 bankruptcy
  2. Chapter 13 bankruptcy

One of the greatest concerns for people considering Chapter 7 bankruptcy is whether they will have to give up all their property. Chapter 7 bankruptcy is a liquidation bankruptcy where your assets are sold. Though you might still be wondering, “Which assets can I keep?” You can keep exempt assets. Non-exempt assets will be sold off, and proceeds will be paid to creditors. On the plus side, most of your unsecured debts will be discharged.

On the other hand, Chapter 13 bankruptcy is a reorganization bankruptcy. It allows you to keep your exempt assets while paying off your debts through a repayment plan.

What Is the Wildcard Exemption in New Jersey?

A wildcard exemption in New Jersey allows you to protect personal property that is not included in other exemptions up to $1,000.

Most exemptions in New Jersey apply to a specific property. However, you can list anything you want to keep under the wildcard exemption. That can include stocks or corporate interests. However, you cannot include real estate.

You can also combine the wildcard exemption with another exemption. For example, you can combine household and wildcard exemptions if your furnishings are worth over $1,000 but under $2,000. You can also apply wildcard exemption to the equity in your car.

Can I Lose My Exempt Assets During Bankruptcy?

You retain ownership of exempt assets once they are exempt under bankruptcy laws. Therefore, knowing what your exemptions are is essential if you want to avoid having your exempt assets included in your estate and sold off.

Struggling With New Jersey Bankruptcy? Law Offices of Scott J. Goldstein Can Help

Bankruptcy proceedings can be challenging for people, especially regarding exemptions. Exemptions provide crucial protection for individuals filing for bankruptcy. By keeping certain assets, they can bounce back from their situation quicker.

In New Jersey’s bankruptcy system, exemptions are essential to the process. Understanding them can make a huge difference in how you approach your case. By learning more about them, you can make the best decisions in your bankruptcy case. In addition, an experienced personal bankruptcy attorney can help you navigate the complex system and achieve the most favorable outcome possible.

For more questions about New Jersey bankruptcy exemptions, contact the Law Office of Scott J. Goldstein and schedule a free consultation.

 

Call the Law Office of Wenarsky & Goldstein

At the Law Offices of Wenarsky & Goldstein, LLC, our New York and New Jersey attorneys are experienced and knowledgeable in bankruptcy, estate planning and probate, guardianship, special needs planning, and real estate law. To learn more about how we can assist you with your legal needs, call us today at 973-453-2838.

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