You need relief from the debt, but not at the price of losing the car you drive to work, the furniture in your home, or the retirement account you spent years building. That is the first property question in a New Jersey Chapter 7 case. Most filers keep everything they own because exemptions protect common categories of property up to specified limits.
That's because federal bankruptcy exemptions -- which NJ allows you to use -- protect most assets.
The federal figures below reflect the amounts in effect from April 1, 2025 through March 31, 2028. These federal exemption amounts are adjusted for inflation every three years, with the next adjustment scheduled for April 1, 2028.
What You Can Keep
Your Home
You can protect up to $31,575 in home equity ($63,150 for married couples). Most NJ homeowners don't exceed this amount, so their homes remain protected.
Your Car
You may exempt up to $5,025 in vehicle equity. If you have a loan, your equity is usually low enough to keep the car.
Personal Belongings
Furniture, clothing, electronics, and appliances are generally protected under exemptions totaling $16,850 (up to $800 per item). Since these items have low resale value, they are rarely taken.
Retirement Accounts
401(k)s, IRAs, pensions, and other retirement savings are fully or nearly fully exempt.
Life Insurance
Term policies are fully protected. Cash-value policies receive partial protection depending on the amount.
Jewelry
You may keep up to $2,125 in jewelry -- often enough to cover wedding rings and sentimental items.
Tools You Need for Work
You may protect up to $3,175 in tools or equipment.
Wildcard Exemption
You can use this flexible exemption to protect up to $1,675 in any property -- including cash or extra equity in a vehicle. If you don't use the full homestead exemption, you can add up to $15,800 of the unused portion to your wildcard.
Wages & Benefits
Your future wages, Social Security, disability benefits, unemployment, and public assistance are all fully protected.
Will You Lose Anything?
Most Chapter 7 cases in New Jersey are "no-asset" cases -- meaning the filer loses nothing. Only high-value, non-exempt property is at risk, and a bankruptcy attorney can often help you plan to protect it.
The Bottom Line
Chapter 7 gives many people a true fresh start while keeping:
- Their home
- Their car
- Their household belongings
- Their retirement accounts
- Their wages and benefits
Which exemptions apply depends on the property, its value, any liens, and the exemption system selected for the case.
The New Jersey Chapter 7 guide explains exemptions, trustee review, discharge, and the property questions that arise before filing.