New Jersey Chapter 7 Bankruptcy Attorney Daniel Straffi, Jr. Clarifies How Much Home Equity Can Be Protected In New Jersey

Toms River, NJ - Daniel Straffi, Jr. of Straffi & Straffi Attorneys at Law (https://www.straffilaw.com/how-much-equity-can-i-have-in-my-home-and-still-file-for-chapter-7-bankruptcy-in-new-jersey) issued guidance on how much home equity can be protected when filing for Chapter 7 in New Jersey, addressing key rules, exemption choices, and timing considerations that determine whether a residence may be retained. The announcement provides practical direction for homeowners evaluating liquidation bankruptcy and highlights the options available under federal and New Jersey law. As a New Jersey Chapter 7 bankruptcy attorney, Mr. Straffi outlines how exemption elections and domicile rules influence outcomes for filers seeking a fresh start while preserving a primary residence.

Under Chapter 7, a trustee evaluates non-exempt assets and may liquidate property to pay creditors. New Jersey affords an election between the state exemption scheme and the federal exemptions, but mixing lists is not permitted. Because New Jersey does not provide a stand-alone homestead exemption, many households rely on the federal system. Effective for cases filed on or after April 1, 2025, the federal homestead exemption is $31,575 per debtor or $63,150 for spouses filing jointly. Additional federal protections include a motor vehicle exemption of $5,025, household goods up to an aggregate $16,850 with a per-item cap, jewelry up to $2,125, a tools-of-the-trade exemption of $3,175, and significant safeguards for retirement accounts. The 730-day domicile rule governs which state's laws apply, making filing dates and moving history decisive factors. In each scenario, selecting the optimal exemption set is critical, and consultation with a New Jersey Chapter 7 bankruptcy attorney can help align the filing strategy with household goals.

Home equity equals market value minus mortgages and liens. If equity falls within available exemptions, a trustee typically has no financial incentive to sell the property. If equity exceeds the protected amount, several lawful approaches may reduce risk. Accurate valuation through an appraisal or comparative market analysis can confirm whether equity actually fits inside the federal homestead cap. The federal wildcard can add protection, consisting of $1,675 plus up to $15,800 of any unused homestead, for a potential $17,475 that can be applied to otherwise non-exempt value. Where modest non-exempt equity remains, trustees sometimes accept a negotiated buyback funded by exempt assets or third-party contributions. If equity is substantially higher than available exemptions, a Chapter 13 repayment plan may preserve ownership by paying the non-exempt portion over time. These tools, combined with careful attention to the means test, mandatory credit counseling, and debtor education, allow many households to navigate Chapter 7 while protecting a residence under the guidance of a New Jersey Chapter 7 bankruptcy attorney.

Beyond homestead-related choices, New Jersey's state exemptions protect categories such as clothing, up to $1,000 in household goods, a general personal property allowance of $1,000, limited wage protections, and burial plot interests. Federal exemptions further protect certain insurance values, public benefits, and personal injury recoveries, including a $31,575 cap for specific bodily injury claims excluding pain and suffering or monetary loss. Each item must be accurately listed and claimed on Schedule C to preserve the protection.

About Straffi & Straffi Attorneys at Law:

Straffi & Straffi Attorneys at Law serves clients across Southern and Central New Jersey in bankruptcy, family law, and criminal defense matters. Led by the father-and-son team of Daniel Straffi, Sr. and Daniel Straffi, Jr., the firm brings more than four decades of combined courtroom and negotiation experience to each case. The practice focuses on practical solutions, steady guidance, and diligent representation tailored to each client's circumstances. For consultations, contact (732) 341-3800 to schedule an appointment and discuss options for debt relief and Chapter 7 planning.

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Company Name: Straffi & Straffi Attorneys at Law
Contact Person: Daniel Straffi, Jr.
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Phone: (732) 341-3800
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City: Toms River
State: New Jersey 08755
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Website: https://www.straffilaw.com/

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