New Jersey Bankruptcy Exemption Statutes

NOTE: Federal Bankruptcy exemptions ARE available for New Jersey filers.  But filers must claim either federal bankruptcy exemptions or state ones – no mixing and matching between the two systems.

Homestead

No exemption for homestead property in New Jersey. However, if filer has property held as a tenancy by the entirety (i.e. a form of joint ownership of property between spouses), the survivorship interest in the property is exempt from creditors of the debts of a single spouse.

Personal Property

The following personal property may be exempt, either wholly or up to the dollar amount given:

  • $1,000 of furniture and household goods
  • $1,000 of personal property and possessions of any kind, stock or interest in corporations
  • Clothing
  • Burial plots

Insurance

  • $500 per month of annuity contract proceeds
  • Life, endowment or annuity proceeds, if policy includes a clause prohibiting proceeds from being used to pay the creditors of the beneficiary
  • Life insurance proceeds or avails if filer is not the insured
  • Disability benefits for any filer
  • Health benefits
  • Group life or health policy or proceeds
  • Disability or death benefits for members of the military
  • Disability, death, medical or hospital benefits for civil defense workers

Pensions (note: tax-exempt retirement accounts such as 401(k)s, 403(b)s, defined benefit plans, and traditional and Roth IRAs up to $1,095,000 are exempt under federal law)

  • IRAs
  • ERISA-qualified benefits for city employees
  • Trust containing personal property created pursuant to federal tax law, including IRAs, Roth IRAs, 401(k) plans & higher education (529) savings plans.
  • Pensions for the following occupations are exempt under NJ law:
    • Alcohol beverage control officers
    • City boards of health employees
    • Civil defense workers
    • County employees
    • Firefighters, police officers, traffic officers
    • Judges
    • Municipal employees
    • Prison employees
    • Public employees
    • School district employees
    • State police
    • Street and water department employees
    • Teachers

Public Benefits

  • Permanent disability or old age assistance
  • Unemployment benefits
  • Workers’ compensation

Miscellaneous

  • Wages:
    • 90% of earned, unpaid wages if annual income is less than 250% of federal poverty level; 75% of earned, unpaid wages if annual income is more
    • Wages or allowances received by military personnel are exempt

Links to Exemption Related Statutes in the New Jersey Code

Real Property

Freda v. Commerical Trust Co. of New Jersey, 570 A.2d 409 (N.J. 1990) None, but survivorship interest of a spouse in property held as tenancy by the entirety is exempt from creditors of a single spouse.

Personal Property

N.J. Code 45:27:21 Burial plots

N.J. Code 2A:17-19 Clothing

N.J. Code 2A:26-4 Furniture and household goods to $1000

N.J. Code 2A:17-56 90% of earned but unpaid wages if annual income is less than 250% of federal poverty level; 75% if annual income is higher

N.J. Code 38A:4-8 Wages or allowances received by military personnel

Insurance Exemptions

N.J. Code 17B:24-7 Annuity contract proceeds to $500 per month

N.J. Code 17:18-12 Disability Benefits

N.J. Code App. A:9-57.6 Disability, death, medical, or hospital benefits for civil defense workers

N.J. Code 38A:4-8 Disability or death benefits for military member

N.J. Code 17B:24-9 Group life or health policy or proceeds

N.J. Code 17:18-12; 17B:24-8 Health or disability benefits

17B:24-10 Life insurance proceeds if clause prohibits proceeds from being used to pay beneficiary's creditors

17B:24-6b Life insurance proceeds or avails if you're not the insured

Retirement Benefits

11 U.S.C. 522(b)(3)(C) Tax-exempt retirement accounts, includiing 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAS, and defined-benefit plans

11 U.S.C. 522(b)(3)(C);(n) Traditional and Roth IRAs to $1,095,000 per person

N. J. Code 43:8A-20 Pensions-Alcohol beverage control officers

N.J. Code 43:18-12 Pensions-City boards of health employees

N.J. Code 43:10-57; 43:10-105 Pensions-County employees

N.J. Code 43:15A-53 Pensions-Public employees

N.J. Code 43:13-9 ERISA-qualified benefits for city employees

N.J. Code App. A:9-57.6 Pensions-Civil Defense workers

N.J. Code 43:16-7; 43:16A-7 Pensions-Firefighters, police officers, traffic officers

In re Yuhas,  104 F.3d 612 (3d Cir. 1997) IRAs

N.J. Code 43:6A-41 Pensions-Judges

N.J. Code 43:13-44 Pensions-Municipal employees

N.J. Code 43:7-13 Pensions-Prison employees

N.J. Code 18A:66-116 Pensions-School district employees

N.J. Code 53:5A-45 Pensions-State police

N.J. Code 43:19-17 Pensions-Street & Water Department employees

N.J. Code 18A:66-51 Pensions-Teachers

N.J. Code 25:2-1; In re Yuhas,  104 F.3d 612 (3d Cir. 1997) Trust containing personal property created pursuant to to federal tax law, inlcuding 401(k) plans, IRAs, Roth IRAs, an higher education (529) savings plans

Public Benefits

N.J. Code 44:7-35 Old age, permanent disability assistance

N.J. Code 43:21-53 Unemployment compensation

N.J. Code 34:15-29 Workers' compensation

Please note: Laws may have changed since our last update. For the latest publication, please visit the state legislature sites directly, or speak with a bankruptcy attorney near you.