New York Bankruptcy Exemption Laws
(Portions reprinted by permission from How
to File for Chapter 7 Bankruptcy, Nolo © 1989-2015 )
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Real property including co-op, condo, or mobile home, to $165,550 for the counties of Kings, New York, Queens, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, and Putnam; $131,325 for the counties of Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster; $82,775 for the remaining counties in the state. (husband & wife may double) (more...)
Motor vehicle to $4,425. $11,025 if vehicle equipped for a disabled person (husband & wife may double) (more...)
Clothing, furniture, refrigerator, TV, radio, computer and cell phone, crockery, cooking utensils & tableware, dishes necessary for family;
Stoves and home heating equipment with fuel to last 120 days;
Wedding ring, jewelry and art to $1,100;
Religious texts, schoolbooks, other books to $550;
Church pew or seat;
Domestic animal with food to last 120 days, to $1,100;
(NY CPLR § 5205)
In bankruptcy, these personal property exemptions claimed under NY CPLR § 5205 may not exceed $11,025 total (including tools of trade & limited annuity) (NY DEBT & CRED § 282) (more...)
$1,100 if no homestead claimed (more...)
90% of earned but unpaid wages received within 60 days before & anytime after filing
100% of pay of noncommissioned officer, private, or musician in U.S. or N.Y. state armed forces (more...)
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Protecting Your Assets in Bankruptcy: New York Property Exemption Laws
Property you get to keep*
The law of what has come to be called
"Asset Protection" is actually a mixture of laws that allow
you to keep certain property no matter what, even if you owe money to
others. Every state has laws that designate specific property you
get to keep so that you can continue living a productive life. That is,
even if you owe a trillion dollars to someone, the law won't make you
sell the shirt off your back to pay it. And in Texas and Florida, they
won't even make you sell your million dollar mansion, or in Nevada, your
gun.
These rules are called "property exemptions." They vary from state to
state. They designate what property is off limits to your 'creditors '-- the legal name for those who claim you owe them money.
Citations to exemptions
When you fill out your bankruptcy forms (Form
6, Schedule C), you
will be asked what property you claim as exempt -- and a citation
of the law that allows it.
This page gives you those citations and gives a brief summary of the exemption.
The help topics on the right provide additional information.
It is up to you to apply the correct citation to your property. If you have any questions, consult an attorney. If you own real estate, you should consult with an attorney about how the exemptions apply to your property.
*Exemptions & "secured debts"
Note that property that is collateral for a purchase-money loan (such
as a car securing a car loan or a home securing a first mortgage) is
not protected by exemptions from repossession actions by that lender. Any equity you may own in the property is protected and may give you certain
rights against holders of judgment liens and second or third lien holders.
Let's repeat that first point before
we go further: Exemption laws do NOT protect you from losing
property if you've voluntarily pledged the property as security for
a loan and you don't make the payments.
Example:
Unsecured vs Secured Debts
So... for example. If you owe $30,000 to credit card companies, that
debt is "unsecured". There is no collateral attached to it.
No matter what they threaten, the credit card company can't take any
of your exempt property. Likewise, most medical bills and
lawsuit settlements are "unsecured" debts. If an unsecured
creditor bothers to go to court get a judgment against you, they can
get the court to attach a "judgment
lien" to your property. But if the property is exempt, you
typically can (and should) ask the bankruptcy court to remove that
lien from your property (but you have to ask -- its not automatic).
Continuing the example ... If you were persuaded to pay off your
credit cards and other unsecured debts with a lower interest, "secured"
loan, say, from a loan consolidation company, you probably pledged
your home equity or other property as collateral.
As a general principle, once you've voluntarily
(i.e. through a contract or signing something) pledged your property as security for a loan, the exemption laws no
longer protect you. The creditor can repossess the property you pledged
regardless of whether it is protected by an exemption.
Note that this is a general principle, among other factors -- more than we can go into here.... That's why we wrote a book... Specific facts might lead the court to apply other principles to, for example, undo a recent transaction if it unfairly benefited a single specific creditor at the expense of many others.
See Chapters 3, 4 and 5 of the How to File for Chapter 7 Bankruptcy for more about this.
Conditions of use & common sense advice before you use
this information — Permission to use these materials
is given only on the condition that the user will be solely responsible
for verifying the accuracy of the information contained here.
This list was last updated, January 2015. Laws can and do change.
Before relying on this or ANY information you find on the internet,
confirm that it is current. (If you find something incorrect or out
of date, please report it here. Thanks.
)
Every effort has been made to report these laws accurately. However,
there could be errors or omissions which could change the effect of
the law in a particular case.
If you see a law listed here and want to know how it applies to you
-- that's what lawyers are for. A lawyer can tell you whether and how
a law would apply to your specific situation, and give you other
ideas of how the laws might work in your favor, in your particular
case. There are resources on this website to help you locate
a lawyer in your area.
Laws are interpreted and applied by trustees and judges, and often
even the judges don't agree on what the law means and when it applies.
Over time, and hundreds of cases, there develops a pretty clear
picture of what exemptions are allowed or routinely challenged within
the local bankruptcy practice. Local customs can vary one
district to the next, or even depend on the trustee. An experienced
local bankruptcy professional should have a good sense of what flies
and what doesn't with your local judge and trustee.
See the disclaimer, for other important
limitations regarding this information.
The Long Tradition of Property Exemptions
The most famous asset protection law is the "unlimited homestead
exemption " invented
in the 1800s by the Republic of Texas as a way of attracting settlers.
Other states across the plains, and Florida added unlimited homesteads
to their laws and today several states still have them. Several years
ago Nevada greatly expanded its exemption laws in hopes
of becoming a haven for those seeking asset protection. Its generous
homestead protection may be partly responsible for the Las Vegas
real estate boom. Unfortunately for debtors in the rest of the country,
most states offer far less protection.
Excerpt from
Special
Rules for Retirement Accounts