New York State exemptions

The New York Bankruptcy Exemptions Protect Most Assets Owned by Chapter 7 and Chapter 13 Bankruptcy Clients

Here is a list of some of the most important New York bankruptcy exemptions:

Homestead Exemption

An individual debtor may exempt from $75,000 to $150,000 in equity in their home. The exemptions are doubled for married couples. Since most people do not have much equity in their homes because of high mortgage balances and home equity loan balances, this exemption protects almost every client from losing their home. For the rare client with too much equity in their home, chapter 13 bankruptcy may be a good option . We will never allow a client to lose their home in a bankruptcy case so long as they are not in default on their mortgages or taxes.

Automobile Exemption

An individual debtor may exempt up to $4,000 in a single vehicle. Married debtors may choose to exempt $4,000 each in two separate vehicles or they may combine their exemptions and protect $8,000 in one vehicle. In our experience, we find that most people either own vehicles with loan balances that exceed the vehicle’s value or they own older vehicles that are fully protected by the exemption. Clients with excess equity in a vehicle or who own multiple vehicles can generally keep the vehicles by either striking a deal with the chapter 7 bankruptcy trustee (which we will negotiate for you) or by filing a chapter 13 bankruptcy.

Cash, Bank Accounts and Tax Refunds

If a homestead exemption is not required, then an individual debtor may protect $5,000 in cash, bank accounts and tax refunds and a married couple may protect up to $10,000. For most clients who do not own a home, this exemption is sufficient. However, for homeowners, great care must be taken to time the bankruptcy to make sure that cash assets are minimized. For example, if a client wants to file bankruptcy in December but expects a large tax refund, we may have to delay the bankruptcy filing until the following March or April.