When you file for bankruptcy, you may claim certain property as exempt from your bankruptcy case. That exempt property does not become a part of your bankruptcy estate. It cannot be used to pay back your creditors. In New Jersey, you can choose between two sets of exemptions: the federal exemptions or the local New Jersey exemptions.
Federal rules exempt up to $22,975 of your interest in your residence and up to $3,675 of your interest in a car. You have an exemption of up to $12,250 in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor. (There is a $575 per item limit.) You may also claim up to $1,550 in jewelry. You have a wildcard exemption for any asset up to $1,225. If you don’t use your whole exemption for your residence, you may apply up to $11,500 of the unused part of that exemption for other personal assets. You also may exempt up to $2,300 in tools of the trade which you use in the course of your employment.
The federal rules exempt any life insurance contract you own, except credit life insurance contracts. Social Security benefits, unemployment compensation, local public assistance benefits, veteran’s benefits, disability or illness benefits, and as much alimony as you reasonably require for support are also exempt.
Under the state exemption scheme, no party of the value of your home is exempted. Also, New Jersey doesn’t have an exemption for tools of the trade. You can exempt up to $1,000 of personal property and up to $1,000 of furniture and household goods. If you work in the military, your wages are exempt.
Your attorney can provide you with the right guidance for your exemption choices.
Please contact Mr. Whelan at 732-214-0300 for a free initial consultation.