When filing for bankruptcy, what property is exempt and what property is not exempt are important factors in protecting the quality of your future. What an exemption means depends largely on whether you decide to file for Chapter 7 bankruptcy or for Chapter 13 bankruptcy. How to determine your qualifying exemptions depends on if you file under federal standards or under the state standards of New York.
If you have lived in New York for two years or longer and are filing bankruptcy, you get the choice to file under New York exemption or federal exemption based on which one benefits your case the most. New York exemptions usually benefit debtors who have considerable equity in a primary residence, such as land ownership and home improvements. Federal exemptions can better benefit individuals who do not own a residence but have substantial equity in other possessions.
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The main benefit of filing under the New York set of exemptions is the generous homestead exemptions provided for by New York Debtor and Credit Law 282 & 283 and New York's Civil Practice Law and Rules 5205. The specific amounts for real property homestead exemption are different by county, and are:
• $125,000 - Ulster County, Saratoga County, Orange County, Columbia County, Albany County, and Dutchess County
• $150,000 - Putnam County, Rockland County, Westchester County, Richmond County, Bronx County, New York County, Kings County, Queens County, Suffolk County, and Nassau County
• $75,000 - all other counties
Additionally, there are homestead-related items that are exempt from bankruptcy seizure in New York. These are items that have to do with quality of life post-bankruptcy. This exempt property includes:
• Clothes
• $1,000 of personal jewelry items and art
• Wedding ring
• $500 of books in addition to any family pictures, religious texts, and school literature
• Home appliances such as a heater, a stove, and a fridge
• Special Electronics such as one TV., one computer, and one cell phone
• Household furniture, cooking utensils, and tableware
• $3,000 of necessary trade tools
• $1,000 of domestic animals
• Motor vehicle worth up to $4,000
• Certain monetary benefits such as social security, unemployment, or disability
Federal bankruptcy exemptions are defined in 11 USC 522 and generally provide for higher quality of life if one's equity is in individual possessions and not a homestead. Most of these exemptions are defined by monetary limits, and include:
• $21,560 in real or personal land property used for residence or burial
• $11,525 in household items, furniture, clothes, and other items of consistent use, but no individual item exceeding $550 in value
• $1,450 in personal jewelry
• A motor vehicle valued at $3,450 or less
• Prescribed necessary health aids
• Monetary benefits such as social security, pensions, and child support
Which exemption set is most beneficial will vary greatly from case to case. An experienced New York bankruptcy lawyer will be able to help you review your assets as well as take you through the bankruptcy process step-by-step.
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