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A1020
ASSEMBLY, No. 1020
STATE OF NEW JERSEY
222nd LEGISLATURE
�
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Assemblyman BALVIR SINGH
District 7 (Burlington)
SYNOPSIS
���� Increases debt execution exemption amounts for
household goods, establishes for persons in debt homestead, bank account, and
disposable earnings exemptions, and caps medical debt interest rate.
CURRENT VERSION OF TEXT
���� Introduced Pending Technical Review by Legislative
Counsel.
��
An Act
concerning debt executions, amending
N.J.S.2A:17-19 and supplementing Title 2A of the New Jersey Statutes and Title
31 of the Revised Statutes.
����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:
���� 1.��� N.J.S.2A:17-19 is
amended to read as follows:
���� 2A:17-19.� Amount; exceptions
����
a.
� Goods and chattels,
shares of stock or interests in any corporation and personal property of every kind
designated by the debtor,
not exceeding in value, exclusive of wearing
apparel,
[
$1,000.00
]
$15,000 or
$25,000 for a debtor with a physical disability, all essential and ordinary
household goods
, and all wearing apparel,
[
the
property of a debtor
]
shall be reserved, both before and after
[
his
]
death, for
[
his
]
the
debtor�s
use or that of
[
his
]
the
debtor�s
family or
[
his
]
estate, and
shall not be liable to be seized or taken by virtue of any execution or civil
process whatever, issued out of any court of this State
, without the need
for the judgment debtor to make a claim of exemption
.
���� Nothing
[
herein
contained
]
in P.L.��� , c.��� (C.������� ) (pending before the Legislature as this
bill)
shall be deemed or held to protect from sale under execution or other
process any goods, chattels or property,
[
for
]
the purchase
[
whereof
]
of which
gave rise to
the debt or demand for which the judgment on which such
execution or process was
[
issued,
shall have been contracted, or to
]
obtained.� P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill) shall not
apply to process issued for the collection of taxes or
assessments.
����
b.��� In addition to any
other funds exempt under this section, $5,000 in cash, or in a deposit account
or other account of the debtor, shall be reserved, both before and after death,
for the debtor�s use or that of the debtor�s family or estate, and shall not be
liable to be seized or taken by virtue of any execution or civil process issued
by any court of this State. �A garnishment order issued against a bank or other
account shall instruct the garnishee that it is to garnish only the amount
exceeding $5,000. �If the judgment debtor has grounds to claim that more than
$5,000 is exempt, the judgment debtor is entitled to file a petition in a court
of competent jurisdiction to that effect. �The exemption described in this
subsection shall be adjusted annually beginning on first day of January of each
successive year following the enactment of P.L.��� , c.�� (C.�������� )
(pending before the Legislature as this bill) by the increase in the cost of
living, which shall be measured by the percentage increase, as of August of the
previous year, of the consumer price index or its successor index as published
by the United State Department of Labor, the federal Bureau of Labor
Statistics, or its successor agency, with the amount of the exemption rounded
up to the nearest $100.
����
c.��� Except as provided in
subsection d. of this section, the maximum part of the disposable earnings of a
debtor for any workweek that is subject to execution or civil process may not
exceed 10 percent of disposable earnings for that week or the amount by which
disposable earnings for that week exceed 60 times the applicable minimum hourly
wage in effect at the time the earnings are payable, whichever is less.� The
applicable minimum hourly wage is the minimum wage required by federal, State,
or local law, whichever is highest.
����
d.��� The exemptions
provided in subsection c. of this section shall not apply in the case of any
order for the support of any person. In such case, one-half of the disposable
earnings of a debtor for any pay period is exempt from execution or civil
process.
����
e.��� The exemptions
provided in this section shall not apply to the orders of any court of
bankruptcy under 11 U.S.C. s.1301 et al. or any debt due for any State or
federal tax.
����
f.���� As used in this
section, �disposable earnings� means that remaining portion of a debtor�s
wages, salary, or compensation for the debtor�s personal services, including
bonuses and commissions, or otherwise, and includes payments pursuant to a
pension or retirement program or deferred compensation plan, after deducting
from the earnings those amounts required by law to be withheld.
(cf: P.L.1973, c.162, s.1)
���� 2.��� (New section) a.� Any
person aged 18 or over, married or single, who resides within the State may
hold as a homestead exempt from attachment, execution, and forced sale, not
exceeding $400,000 in value, any one of the following:
���� (1)� the person�s interest in
real property upon which exists a dwelling house in which the person resides;
���� (2)� the person�s interest in
one condominium or cooperative in which the person resides; or
���� (3)� a manufactured home as
defined pursuant to section 2 of P.L.1990, c.61 (C.54:4-8.58), including the
land on which the manufactured home is situated.
���� b.��� Only one homestead
exemption may be held by a married couple or a single person under this
section.� The value as specified in this section refers to the equity of a
single person or married couple.� If a married couple lived together in a
dwelling house, a condominium or cooperative, or a manufactured home and are
then divorced, the total exemption allowed for that residence to either or both
persons shall not exceed $400,000 in value.
���� c.��� The homestead exemption,
not exceeding the value provided for in subsection a. of this section and as
further adjusted pursuant to subsection d. of this section, automatically
attaches to the person�s interest in identifiable cash proceeds from the voluntary
or involuntary sale of the property.� The homestead exemption in identifiable
cash proceeds continues for 18 months after the date of the sale of the
property or until the person establishes a new homestead with the proceeds,
whichever period is shorter.� Only one homestead exemption at a time may be
held by a person under this section.
���� d.��� The homestead exemption
provided by this section shall be adjusted annually beginning on January 1,
2024 and thereafter on January 1 of each successive year by the increase in the
cost of living. The increase in the cost of living shall be measured by the
percentage increase as of August of the immediately preceding year over the
level as of August of the previous year of the consumer price index (all urban
consumers, United States city average for all items) or its successor index as
published by the United States Department of Labor, the federal Bureau of Labor
Statistics, or its successor agency, with the amount of the exemption rounded
up to the nearest $100.
���� 3.��� (New section) a.� The
maximum interest rate on medical debt shall be the lesser of the following:
���� (1)� the annual rate equal to
the weekly average one-year constant maturity Treasury yield, as published by
the Board of Governors of the Federal Reserve System, for the calendar week
preceding the date when the consumer was first provided with a bill; or
���� (2)� three percent a year.
���� The maximum interest rate
provided pursuant to this subsection shall also apply to any judgments on
medical debt.
���� b.��� As used in this section:
���� �Health care services� means a
health care service as defined pursuant to section 2 of P.L.1971, c.136
(C.26:2H-2).
���� �Medical debt� means a loan,
indebtedness, or other obligation arising directly from the receipt of health
care services or of medical products or devices.
���� 4.��� This act shall take
effect on the 90th day next following enactment.
STATEMENT
���� This bill increases the debt
execution exemption amounts for household goods, establishes for persons in
debt homestead, bank account, and disposable earnings exemptions, and places a
cap on the medical debt interest rate.
���� Under the bill, any person
aged 18 or over, married or single, who resides within the State may hold as a
homestead exempt from attachment, execution, and forced sale, not exceeding
$400,000 in value any of the following: an interest in real property upon which
exists a dwelling house in which the person resides; an interest in a
condominium or cooperative in which the person resides; or a manufactured home,
including the land on which the manufactured home is situated.� The homestead
exemption will automatically attach to the person�s interest in identifiable
cash proceeds from the voluntary or involuntary sale of the property.� The
homestead exemption in identifiable cash proceeds continues for 18 months after
the date of the sale of the property or until the person establishes a new
homestead with the proceeds, whichever period is shorter.� Only one homestead
exemption at a time may be held by a person under the bill.
���� The bill additionally
increases the total value of household goods that are exempt from debt
collection from $1,000 to $15,000 or $25,000 for a debtor with a physical
disability.� The bill also provides for an exemption from garnishment of up to
$5,000 for cash held in a deposit account or other account of the debtor and
limits the amount of disposable earnings subject to execution to no more than
10 percent of disposable earnings for that week or the amount by which
disposable earnings for that week exceed 60 times the applicable minimum hourly
wage in effect at the time the earnings are payable, whichever is less.� For
the purpose of this bill, �disposable earnings� means the remaining portion of
a debtor�s wages, salary, or compensation for the debtor�s personal services,
including bonuses and commissions, or otherwise, and includes payments pursuant
to a pension or retirement program or deferred compensation plan, after
deducting from the earnings those amounts required by law to be withheld.
���� Finally, the bill places a cap
on the interest rate for medical debt. The maximum interest rate on medical
debt will be the lesser of the following:
���� (1)� the annual rate equal to
the weekly average one-year constant maturity Treasury yield, as published by
the Board of Governors of the Federal Reserve System, for the calendar week
preceding the date when the consumer was first provided with a bill; or
���� (2)� three percent a year.