New Jersey Bankruptcy Exemptions
Electing Homestead Status Under New Jersey Exemption Laws
The State of New Jersey stands out because of one rather odd provision of state law. The New Heresy bankruptcy exemptions do not exempt homesteads, where\as all other state provide at least a modest allowance to save the family home from creditors. Alternatively, if filing, New Jersey does however permit state residents to claim the Federal exemption list provided by the Code. The homestead allowance under the Code is $18,5000 for equity owned in land, real estate, improvements and attached property.
Owners of multiple homes and real estate
To avoid unnecessary complications, all people who own multiple homes, tracts of land, or interests in real estate, should consider filing a formal designation of homestead with the county clerk. Once entered into the county real estate records, the filing has the effect of an election of property that carries through to any subsequent bankruptcy case. If proof designation is not available, creditors may file objections seeking to avoid homestead status and seek foreclosure if the court sustains the objection. Dilatory motions, hearings and ancillary investigations easily result in adversary proceedings. The designation then acts as a policy of insurance, yet must be filed for record before instigating any bankruptcy proceedings.