Bankruptcy filers could protect home value from forced sale

An owner filing for bankruptcy may exempt some of a homestead’s value from attachment, seizure, or forced sale. A homestead must be a primary residence. It can be a house, condominium, or manufactured home, with related land and appurtenances; vacation homes and rental properties do not qualify. The exemption applies by law without a written claim or recording. It does not apply to claims for unpaid association charges tied to the property or to judgments concerning fraud, fraudulent transfers, duress, or fraud, deceit, or manipulation in a fiduciary role. An owner may abandon the exemption by a recorded waiver, transferring the property, or permanently leaving New Jersey. Leaving for up to two years does not count as abandonment. The exemption amount is set when the bankruptcy petition is filed, or when later property becomes part of the bankruptcy estate. The limits adjust every three years starting January 1, 2027.