N.J. Stat. Ann. § 40:43-10

Whenever any municipality may be hereafter created or incorporated, it shall have and own all the property, assets and liens which at the time of its creation or incorporation belonged to or were vested in any municipality existing within its limits, and a proportionate amount of the property, assets and liens belonging to any municipality, any portion of whose territory is included within its limits; it shall also be liable to pay the bonded and other indebtedness of any municipality which before its creation or incorporation existed within its limits, and a proportionate amount of the bonded or other indebtedness of any municipality, a portion of the territory of which was included therein. The said proportionate amount of said property, assets and liens, and said proportionate amount of said bonded and other indebtedness, shall be ascertained in the manner hereinafter provided.