New Jersey Bankruptcy Guide

Complete guide to filing bankruptcy in New Jersey, including current median income requirements, New Jersey's homestead exemption of $26,450, tenancy by the entirety protection for married couples, bankruptcy court information, and how to find qualified bankruptcy attorneys throughout New Jersey.

New Jersey Median Income for Bankruptcy (2026)

To qualify for Chapter 7 bankruptcy in New Jersey, your household income must be below these median income levels. If your income exceeds these amounts, you may still qualify through the means test or need to file Chapter 13 instead.

Household Size	Annual Median Income	Monthly Median Income
1 person	$72,865	$6,072
2 people	$89,159	$7,430
3 people	$107,895	$8,991
4 people	$130,470	$10,873
5 people	$139,470	$11,623
6 people	$148,470	$12,373

Note: For households larger than 4, add $9,000 per additional person. These figures are updated annually by the U.S. Trustee Program. New Jersey has some of the highest median incomes in the nation.

Calculate Your New Jersey Eligibility

New Jersey Bankruptcy Exemptions

New Jersey does not allow bankruptcy filers to choose federal exemptions. All New Jersey bankruptcy filers must use New Jersey state exemptions. However, New Jersey does recognize tenancy by the entirety protection, which can provide unlimited protection for certain jointly-owned property.

New Jersey Homestead Exemption

Up to $26,450.

New Jersey's homestead exemption protects up to $26,450 of equity in your primary residence. This is one of the lower homestead exemptions in the country. The exemption applies to real property including houses, condominiums, mobile homes, and co-ops that serve as your principal residence.

The property must be your principal residence at the time of filing bankruptcy. For many New Jersey homeowners with significant equity, the limited homestead exemption means that Chapter 13 bankruptcy may be necessary to protect their homes, or they may benefit from tenancy by the entirety protection if married.

Tenancy by the Entirety (Married Couples)

Unlimited protection for jointly-owned property when only one spouse files.

New Jersey recognizes tenancy by the entirety, a form of property ownership available only to married couples. When property is held as tenancy by the entirety and only one spouse has debts, that property may be fully protected from the filing spouse's creditors in bankruptcy, regardless of the amount of equity.

This powerful protection applies to:

• Primary residence owned jointly by married couple
• Other real estate owned jointly as tenancy by the entirety
• Bank accounts titled as tenancy by the entirety
• Investment accounts held as tenancy by the entirety

Requirements for tenancy by the entirety protection:

• You must be legally married
• Only one spouse is filing bankruptcy (not a joint filing)
• The property must be titled as "tenancy by the entirety" or equivalent
• The debts are the filing spouse's individual debts, not joint debts

If both spouses file bankruptcy jointly, or if the debts are joint debts owed by both spouses, tenancy by the entirety protection does not apply and you must rely on New Jersey's regular exemptions.

New Jersey Vehicle Exemption

None under state law.

New Jersey does not have a specific vehicle exemption under state law. However, New Jersey has a personal property exemption of $1,000 that can be applied to a vehicle or other personal property. If you owe more than your vehicle is worth or have minimal equity after applying the personal property exemption, you can typically keep it by continuing to make loan payments through a reaffirmation agreement in Chapter 7.

Many New Jersey bankruptcy filers find that their vehicles have little or no equity after subtracting the loan balance, making it easier to keep their cars.

New Jersey State Exemptions

New Jersey bankruptcy exemptions include:

• Homestead: $26,450
• Vehicle: None (must use personal property exemption)
• Personal Property: $1,000 total
• Household Goods and Furniture: No specific limit, but must be necessary for living
• Clothing: All necessary wearing apparel
• Tools of Trade: None specifically listed
• Wildcard: None (no general wildcard exemption in New Jersey)
• Wages: 90% of earned wages (or 250% of federal poverty level, whichever is greater)
• Security Deposits: Security deposits for rental housing

Other Protected Assets

• Retirement Accounts: Fully protected including 401(k), IRA, pension plans, and government retirement benefits under federal law
• Public Benefits: Social Security, unemployment, workers' compensation, veteran's benefits, disability benefits, public assistance
• Life Insurance: Life insurance proceeds if policy prohibits use to pay creditors; group life insurance policy or proceeds
• Education Savings: New Jersey 529 college savings plan contributions
• Personal Injury Awards: Personal injury compensation
• Health Aids: Prostheses and other health aids

Filing Bankruptcy in New Jersey

Chapter 7 Bankruptcy in New Jersey

Chapter 7 bankruptcy is commonly filed throughout New Jersey despite the state's relatively low exemptions. The process typically takes 3-4 months from filing to discharge and eliminates most unsecured debts including credit cards, medical bills, personal loans, and past-due utility bills.

To qualify for Chapter 7 in New Jersey, you must pass the means test by having income below the New Jersey median (which is high compared to other states) or by showing that after allowable expense deductions, you lack sufficient disposable income to fund a Chapter 13 repayment plan. You must also complete credit counseling from an approved agency within 180 days before filing.

Given New Jersey's limited exemptions, many filers with significant assets or home equity may need to file Chapter 13 instead. However, married couples with property held as tenancy by the entirety may have strong protection even with New Jersey's low exemption limits.

Learn more about Chapter 7 bankruptcy →

Chapter 13 Bankruptcy in New Jersey

Chapter 13 bankruptcy is particularly popular in New Jersey due to the state's limited exemptions. Chapter 13 allows New Jersey residents to keep property while repaying some or all debts through a court-approved 3-5 year payment plan. This option is particularly beneficial if you're behind on mortgage or car payments and want to catch up while stopping foreclosure or repossession.

Chapter 13 is especially useful in New Jersey if your income is too high to qualify for Chapter 7 (New Jersey's high median income thresholds can be difficult to meet), if you have non-exempt assets you want to protect (particularly home equity exceeding $26,450), or if you have priority debts like recent taxes or past-due child support. Your monthly payment is based on your disposable income after allowable living expenses.

Many New Jersey homeowners with significant equity choose Chapter 13 to keep their homes, paying unsecured creditors through the plan based on the value of non-exempt equity.

Learn more about Chapter 13 bankruptcy →

Bankruptcy Court in New Jersey

New Jersey has one federal bankruptcy court district:

District of New Jersey

Main Courthouses: Newark, Trenton, Camden

The U.S. Bankruptcy Court for the District of New Jersey covers the entire state. The court has three vicinages (divisions) corresponding to New Jersey's three main regions:

Newark Vicinage (Northern New Jersey): Serves Bergen, Essex, Hudson, Hunterdon, Middlesex, Morris, Passaic, Somerset, Sussex, Union, and Warren counties. This is the busiest division, covering the densely populated northern portion of the state including Newark, Jersey City, Paterson, and Elizabeth.

Trenton Vicinage (Central New Jersey): Serves Mercer, Monmouth, and Ocean counties. This division covers the state capital area and central coastal region.

Camden Vicinage (Southern New Jersey): Serves Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, and Salem counties. This division covers southern New Jersey including Camden, Cherry Hill, and the southern coastal areas.

You must file in the district where you have lived for the greater part of the 180 days before filing. Since New Jersey has only one district, all New Jersey residents file in the District of New Jersey, but your case will be assigned to the appropriate vicinage based on your county of residence.

New Jersey Residency Requirements

To use New Jersey bankruptcy exemptions, you must have been domiciled (legally residing) in New Jersey for at least 730 days (2 years) before filing. If you've lived in New Jersey for less than 2 years, you must use the exemptions from the state where you lived for the 180 days immediately before the 2-year period.

New Jersey does not allow the choice of federal exemptions, so once you meet the residency requirement, you must use New Jersey state exemptions (though tenancy by the entirety protection may still apply if you're married).

Find a New Jersey Bankruptcy Attorney

Most New Jersey bankruptcy attorneys offer free initial consultations. Given the complexity of bankruptcy law, New Jersey's limited exemptions, and the importance of tenancy by the entirety planning for married couples, consulting with an experienced New Jersey bankruptcy attorney is highly recommended.

What a New Jersey Bankruptcy Attorney Can Do

• Determine which bankruptcy chapter is right for your financial situation
• Maximize New Jersey exemptions and tenancy by the entirety protection
• Evaluate whether you should file individually or jointly if married
• Calculate whether you qualify for Chapter 7 using the New Jersey means test
• Navigate New Jersey-specific bankruptcy procedures and local court rules
• Complete and file all required bankruptcy paperwork correctly
• Represent you at the 341 meeting of creditors
• Handle any objections from creditors or the bankruptcy trustee
• Guide you through the entire process from filing to discharge

Cost of Filing Bankruptcy in New Jersey

Chapter 7 bankruptcy attorney fees in New Jersey vary by location and complexity:

• Northern New Jersey (Newark, Jersey City, Bergen County): $1,500 to $2,200 plus $338 filing fee
• Central New Jersey (Trenton, Middlesex, Monmouth): $1,300 to $1,900 plus $338 filing fee
• Southern New Jersey (Camden, Cherry Hill, Atlantic City): $1,200 to $1,800 plus $338 filing fee

Chapter 13 attorney fees typically range from $3,500 to $5,000 plus a $313 filing fee. In Chapter 13, attorney fees are usually paid through your repayment plan rather than upfront.

New Jersey bankruptcy attorney fees tend to be higher than the national average due to the state's high cost of living and complex property ownership issues (tenancy by the entirety analysis, high property values). Many attorneys offer payment plans for Chapter 7 to make bankruptcy more accessible.

New Jersey-Specific Bankruptcy FAQs

Can I keep my house in New Jersey bankruptcy?

It depends on your equity and marital status. New Jersey's $26,450 homestead exemption is relatively low. If you're single with more equity than this, you may need Chapter 13 to keep your home. If you're married and file individually (not jointly), tenancy by the entirety may provide unlimited protection if your home is titled correctly and the debts are individual debts of the filing spouse only.

What is tenancy by the entirety and how does it help in bankruptcy?

Tenancy by the entirety is a special form of property ownership available only to married couples in New Jersey. When property (especially a home) is held as tenancy by the entirety, and only one spouse files bankruptcy with individual debts, the property may be completely protected from creditors regardless of the amount of equity. This can be more powerful than the homestead exemption. Consult with a New Jersey bankruptcy attorney to determine if this applies to your situation.

Can I keep my car in New Jersey bankruptcy?

New Jersey has no specific vehicle exemption, but you can use the $1,000 personal property exemption. Most New Jersey filers have car loans, and if the vehicle equity is less than $1,000 after subtracting the loan balance, you can typically keep it by continuing payments through a reaffirmation agreement. If you have significant vehicle equity, tenancy by the entirety may protect jointly-owned vehicles (if only one spouse files).

Why are New Jersey bankruptcy exemptions so low?

New Jersey has some of the lowest bankruptcy exemptions in the country. The state legislature has not updated exemption amounts significantly in recent years. However, New Jersey does recognize tenancy by the entirety protection, which can provide strong protection for married couples. Many New Jersey filers with significant assets choose Chapter 13 to protect non-exempt property.

Should my spouse and I file jointly or individually in New Jersey?

This is a crucial strategic decision in New Jersey. If you file jointly, you double your exemptions ($52,900 homestead) but lose tenancy by the entirety protection. If one spouse files individually, you may get unlimited tenancy by the entirety protection for jointly-owned property, but only the filing spouse's debts are discharged. An experienced New Jersey bankruptcy attorney can analyze your specific situation and recommend the best approach.

How does New Jersey's high cost of living affect bankruptcy?

New Jersey's high cost of living has both positive and negative effects. On the positive side, New Jersey has high median income thresholds, making it easier to qualify for Chapter 7 even with substantial income. Additionally, New Jersey filers can claim higher living expense deductions on the means test. On the negative side, property values are high, often exceeding the modest exemptions available.

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