New Jersey bankruptcy laws provide protection for debtors who simply cannot pay their bills, while offering creditors the chance to get some of what is owed to them through the debtor’s assets.

Bankruptcy Exemptions

New Jersey allows its residents to choose one of two exemption schemes. Under the federal option, residents may keep:

• Up to $20,200 for your home
• Up to $1,075 for any property as a wild card
• Up to $20,200 for tools of the trade
• Up to $10,125 of the value of unused homestead exemption, applied toward other property
• Up to $3,225 for a vehicle
• Up to $20,200 for personal injury compensation
• Up to $1,350 for jewelry
• Up to $10,775 in a loan value life insurance policy
• Up to $10,775 for household goods, $550 per item
• Alimony or child support
• Life insurance contract that has not matured
• ERISA qualified benefits and retirement benefits
• Wrongful death, crime victims’ compensation, or public benefits or compensation
• Health aids
• Life insurance payments you receive from someone you depended on, like a parent
• Lost earnings payments

Under the New Jersey plan, residents may keep:

• Up to $1,000 in value for shares of stock in a company, goods and chattels, or interest in a corporation
• Your clothes
• Burial plots
• Public employees’ pension
• ERISA qualified pensions
• Up to $1,000 in value for furniture and household goods
• Group life or health insurance
• Up to $500 per month for annuity contract proceeds
• Property in a business partnership
• Public compensation
• Disability or death benefits for those in the military
• Health or disability benefits and fraternal benefit society
• Life insurance proceeds from a third party
• Life insurance proceeds if there is a no payment to creditors clause
• 90 percent of unpaid wages for income less than $7,500 per year.

If your income is more than $7,500 per year, your wage exemption is left up to the judge.

Chapter 7 Bankruptcy Information

Those looking to file bankruptcy in an attempt to discharge most of their debts will want to apply for Chapter 7. They must pass a means test in order to do this, but if they qualify, most of their debts will be erased after assets are sold.

Chapter 13 Bankruptcy Information

Those who cannot or do not wish to file Chapter 7 can file Chapter 13 bankruptcy. This form of bankruptcy allows them to repay their debts under a court supervised repayment plan.