Establishes homestead and bank account exemptions for persons in debt.

A4279

ASSEMBLY, No. 4279

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED FEBRUARY 19, 2026

Sponsored by:

Assemblyman� DAN HUTCHISON

District 4 (Atlantic, Camden and Gloucester)

Assemblyman� CODY D. MILLER

District 4 (Atlantic, Camden and Gloucester)

SYNOPSIS

���� Establishes homestead and bank account exemptions for
persons in debt.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

concerning exemptions from debt execution or
attachment, supplementing Title 2A of the New Jersey Statutes and amending
N.J.S.2A:17-19.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� (New section)� As used
in this act:

���� �Condominium� means the same
as defined pursuant to section 3 of the �Condominium Act,� P.L.1969, c.257
(C.46:8B-3).

���� �Dwelling house� means any
residential property assessed as real property; but, the term shall not include
a unit in a condominium or a horizontal property regime.

���� �Homestead� means any of the
following if it is the primary residence of the owner, the owners� family
members, or anyone who has an interest in the property:

���� (1)�� a dwelling house,
appurtenances, and any land on which that dwelling house and any appurtenances
are located;

���� (2)�� a condominium unit or a
unit in a horizontal property regime; or

���� (3)�� a manufactured home as
defined pursuant to section 2 of P.L.1990, c.61 (C.54:4-8.58), including any
appurtenances and land on which the manufactured home and any appurtenances are

situated.

���� Notwithstanding section 2 of
P.L.1990, c.61 (C.54:4-8.58), manufactured homes constructed before 1974 shall
be included in the definition of homestead even if they were not manufactured
in accordance with the National Manufactured Housing Construction and Safety
Standards Act of 1974.

���� �Horizontal property regime�
means the form of real property ownership provided for under the �Horizontal
Property Act,� P.L.1963, c.168 (C.46:8A-1 et seq.).

���� �Owner� means, but is not
limited to, a natural person who is a sole owner, joint tenant, tenant by the
entirety, tenant in common, life estate holder, a holder of a beneficial
interest in a trust, a purchaser under a deed of trust, mortgage, or contract,
or a holder of a remainder interest.

���� �Principal residence� means a
homestead occupied by the owner or a member of the owner�s immediate family as
the owner's or family�s primary residence, as distinguished from a vacation
home, property owned and rented or offered for rent by the owner, and other
secondary real property holdings.

���� 2.
�����
(New
section) a.� In the case of bankruptcy, each owner may exempt from attachment,
execution, and forced sale a homestead as defined pursuant to section 1 of
P.L.��� , c.��� (C.������� ) (pending before the Legislature as this act).

���� b.��� An owner who is entitled
to a homestead exemption shall hold that exemption by operation of law and no
written claim or recording shall be required.

���� c.���� The owner's exemption
allowed pursuant to this section shall be determined on the date the bankruptcy
petition is filed or, with respect to property that becomes property of the
estate after that date, the date the property becomes property of the estate.

���� d.��� The exemption allowed
pursuant to this section shall not apply to real property
that is part of and subject to a community association;
condominium association; homeowners� association; cooperative; or any other
common interest association that may be subject to the
�Planned Real Estate Development Full Disclosure Act,�
P.L.1977, c.419 (C.45:22A-21 et seq.), but only with respect to claims
regarding unpaid assessments; special assessments; rent, in the case of a
proprietary lease; cooperative shares; and other charges due and owing the
community association arising out of the real property for which the homestead exemption
is sought.

���� 3.��� (New section) a.� A
homestead exemption may be abandoned by any of the following:

���� (1)�� a declaration of
abandonment or waiver;

���� (2)�� a transfer of the
homestead property by deed of conveyance; or

���� (3)�� a permanent removal of
the owner as a resident of this State.� The owner may be removed from the
homestead for up to two years without an abandonment or a waiver of the
exemption.

���� b.��� A declaration of
abandonment or waiver pursuant to paragraph (1) of subsection a. of this
section shall be executed by the owner and acknowledged.� A declaration of
abandonment or waiver is effective only from the time of its recording in the
office of the county clerk.

���� 4.��� (New section)� The
homestead exemption provided pursuant to P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill) shall not affect or apply to attachments,
executions and sales in connection with court judgments concerning:

���� a.���� fraud;

���� b.��� fraudulent transfers or
conveyances;

���� c.���� duress; or

���� d.��� fraud, deceit, or
manipulation in a fiduciary capacity.

���� 5.��� N.J.S.2A:17-19 is
amended to read as follows:

���� 2A:17-19.� Amount; exceptions

����
[
Goods and chattels, shares of
stock or interests in any corporation and personal property of every kind, not
exceeding in value, exclusive of wearing apparel, $1,000.00, and all wearing
apparel, the property of a debtor shall be reserved, both before and after his
death, for his use or that of his 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.

���� Nothing herein contained shall
be deemed or held to protect from sale under execution or other process any
goods, chattels or property, for the purchase whereof the debt or demand for
which the judgment on which such execution or process was issued, shall have
been contracted, or to apply to process issued for the collection of taxes or
assessments.
]

����
a. (1) It shall be required
that $3,500 in cash, in a deposit account or other account of the debtor, or

in
a joint account, shall be reserved if the debtor receives approval of a
petition for protection of those funds by a court of competent jurisdiction.�
The funds 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 from any court of
this State, and shall be accessible to the debtor regardless of whether the
debtor files for bankruptcy.� A garnishment order issued against a bank or
other account that has received an order of protection pursuant to this
subsection shall instruct the garnishee that it is to garnish only the amount
exceeding $3,500 in a joint account.� If the judgment debtor has grounds to
claim that more than $3,500 is exempt, the judgment debtor is entitled to file
a petition in a court of competent jurisdiction to that effect.

����
(2)�� The garnishee shall
be served with a notice from the judgment creditor instructing the garnishee to
protect the exempt amount, to preserve the judgment debtor�s access to the
exempt amount, and to notify the judgment debtor of the garnishment or attempted
garnishment, including information about the procedure by which the judgment
debtor may object to the seizure of any funds that exceed the amount made
exempt by this subsection.� In addition to the notice to debtor required to be
sent by R.4:59-1(h) and R.6:7-1(c) of the New Jersey Rules of Court, the
Department of Banking and Insurance shall draft and publish a form that the
judgment creditor shall be required to use to give the notice required by this
subsection.

����
(3)�� An institution that
is served with an execution or other civil process on funds held in a judgment
debtor�s account shall charge no fee to the judgment debtor regardless of any
terms of agreement, or schedule of fees, or other contract between it and the
judgment debtor if:

����
(a)�� the judgment debtor�s
funds are entirely exempt pursuant to paragraph (1) of this subsection; or

����
(b)�� funds are garnished
or executed upon in violation of any section of P.L.��� , c.��� (C.��������� )
(pending before the Legislature as this bill).

����
b. The amount

set
forth in paragraph (1) of subsection

a. of this section shall be automatically adjusted to reflect
changes by the percentage change, if any, from January 1st to December 31st of
the preceding year, in the Consumer Price Index for All Urban Consumers, the
Annual City Average, for the Mid-Atlantic Region, or any successor indexes, as
published by the Bureau of Labor Statistics within the United States Department
of Labor, or its successor agency, beginning January 1st, 2024 and every three
years thereafter.� The Department of Banking and Insurance shall triennially
publish the three-year adjustment on April 1st of the following year.�
Adjustments made pursuant to this paragraph shall be rounded up to the next
$50.

����
c. Payments made pursuant
to sections 24 or 32 of the "Internal Revenue Code of 1986" (26
U.S.C. s.24 or 26 U.S.C. s.32) are exempted from seizure on execution whether
the payment has been received or is pending.

(cf: P.L.1973, c.162, s.1)

���� 6.��� This act shall take
effect on January 1, 2027, except that the Commissioner of Banking and
Insurance may take such anticipatory administrative action in advance thereof
as shall be necessary for the implementation of this act.

STATEMENT

�����
This bill establishes homestead and bank
account exemptions for persons in debt.
� Under the bill, an owner who has declared bankruptcy can
exempt from an attachment, execution, and forced sale a homestead.� �Homestead�
is defined in the bill to
mean any of the following if it is
the primary residence of
the owner, the
owners� family members, or anyone who has an interest in the property: 1) a
dwelling house, appurtenances, and

any
land on which that

dwelling house and any appurtenances are
located; 2) a condominium unit or a unit in a horizontal property regime; or 3)
a manufactured home, including any appurtenances and land on which the
manufactured home
and any appurtenances are

situated.� �Homestead� excludes personal property.� The exemption does not
apply to real property
that is
part of and subject to a common interest association that may be subject to
other current statutory provisions,
but

only with respect to claims

for charges due and owing the community association arising out of the real
property for which the exemption is sought.

����� The bill provides that, in a bankruptcy case, the
owner�s exemptions shall be determined on the date the bankruptcy petition is
filed or, with respect to property that becomes property of the estate after
that date, the date the property becomes property of the estate.

����� Additionally, the bill updates current law by
removing the exemption for certain goods, chattels, shares of stock or
interests in any property of every kind up to a certain dollar amount and
adding a bank account exemption, regardless of whether a debtor files for
bankruptcy, of up to $3,500 in cash for a deposit account or other account of a
debtor, or a joint account.� The funds in a bank account are to be exempt from
execution
after the debtor receives
approval of a petition for reservation of the funds by a court of competent
jurisdiction.
� The
bill further establishes a process by which a person is to be notified to
protect the exempt amount and by which the person can object to the seizure of
any funds.�