If you file for Chapter 7 bankruptcy in New York, you can use New York’s bankruptcy exemptions to protect your property. New York’s bankruptcy exemptions also play a role in Chapter 13 bankruptcy. Continue reading to learn about what property is protected by New York’s bankruptcy exemptions.
The Bankruptcy Exemptions in New York
Exemptions are specific laws that allow you to protect certain property from your creditors, such as your car or home. If you file a Chapter 7 bankruptcy, you can keep the items that are protected by New York’s bankruptcy exemptions. If you file for Chapter 13 bankruptcy, New York’s bankruptcy exemptions play a role in how much you repay your creditors through your Chapter 13 plan.
Federal Exemptions Available in New York
New York, like other states, has its own exemptions that you can use when you file a bankruptcy. There is also a set of bankruptcy exemptions established by federal law (called the federal bankruptcy exemptions). In 2010, New York amended its laws to allow you to choose between the state and federal exemptions. However, you may not mix and match the New York Bankruptcy exemptions and the federal bankruptcy exemptions. If you file bankruptcy in New York, you must choose either the New York or the federal exemptions.
If you choose to use the New York bankruptcy exemptions, you may also use any of the applicable federal non-bankruptcy exemptions. The federal non-bankruptcy exemptions protect items such as federal and military retirement accounts and veteran’s benefits. (To figure out which exemptions are better for you, see Which Should I Use: New York or Federal Bankruptcy Exemptions?)
Married Couples May Double New York Exemptions
Married couples who file a joint bankruptcy in New York are allowed to “double” the exemption amounts, meaning they each may claim the full exemption amount for any property belonging to them. Bear in mind that you may only claim an exemption and protect property that belongs to you.
To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see Nolo’s Bankruptcy Exemptions topic page.
Commonly Used New York Bankruptcy Exemptions
Below is a list of commonly used New York bankruptcy exemptions. Unless otherwise indicated, all references are to the New York Code Civil Practice Law and Rules.
Property Exemptions Under §5205 Are Limited to $10,000
You may only protect up to $10,000 worth of total value in items listed under Civil Practice Law and Rules §5205 (see below). If you fully utilize your exemptions under §5205 and have claimed exemptions in less than $10,000 worth of property, you may use the remaining amount, or up to $5,000, whichever is less, to protect additional cash or the right to receive income tax refunds.
5206(a) - House, condominium, co-op, or mobile home used as a residence, up to the following values, based on the county in which the property is located:
$150,000 in Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and, Putnam counties
$125,000 in Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties
$75,000 in all other remaining counties of the state
To learn more, see The New York Homestead Exemption.
Banking 407 - $600 on deposit with a savings and loan association
5205 – Stoves and heating equipment for use in your home and fuel for 120 days, sewing machine, religious texts, family photos and portraits, school books, books up to $500 in value, seat or pew used for religious worship, domestic animals up to $1,000 in value, food for you and your family for 120 days, clothing, furniture, refrigerator, radio, tv, computer, cell phone, kitchenwares, prescribed health aids, wedding ring, watch/jewelry/art up to $1,000 in value
5205, Debtor & Creditor §282 – One motor vehicle up to $4,000 in value or up to $10,000 if equipped for use by a disabled debtor (To learn more, see The New York Motor Vehicle Exemption in Bankruptcy). The motor vehicle exemption does not protect your vehicle from debt owed for domestic support obligations or to the State of New York.
5205 – Property or damages arising from the damage of exempt personal property, for up to one year after collection of proceeds. For example, an insurance claim for a damaged vehicle or a cause of action against someone who vandalized your home.
5205 – All property held in a spendthrift trust for a debtor if the trust was created by or proceeded from someone other than you
5205 - Uniforms, arms, and equipment used in military service and pensions and awards awarded for military service
Pensions and Public Benefits
5205, Debtor & Creditor §282 – IRA, 401(k), Keogh, or other qualified retirement plan; Social Security, unemployment, disability, public assistance, workers’ compensation or veteran’s benefits
Debtor & Creditor §282 – Benefits from crime victim’s reparations laws, payment for wrongful death of your dependent or a person upon whom you were dependent and up to $7,500 for personal bodily injury
Wages and Income
5205 - 90% of income received within 60 days before filing bankruptcy; 90% of earnings from the sale of milk on your farm; 100% of pay to a noncommissioned officer, private, or musician in the armed forces of the U.S. or N.Y.
5205 – Court-ordered alimony, maintenance or child support
In re Wiltsie, 463 B.R. 223 (Bankr .N.D. N.Y. 2011)
5205 - Security deposits being held for rental real estate or utilities; service animals; necessary medical and dental accessories; New York State college choice tuition savings program trust fund payments for the benefit of a minor or up to $10,000 of value if you own the account; cash surrender value of insurance policies
Debtor & Creditor §283 – Non-tax deferred annuity contract benefits, up to $10,000, due to you if you purchased the contract within the 6 months before filing bankruptcy
5206 - Burial plot no larger than 1/4 acre with no building or structure (other than headstone or monument) upon it
Tools of the Trade
5205 - tools necessary for your profession up to $3,000 in value $2,175 of value in implements, books, and tools of your trade, occupation, or business
5205 - $1,000 of any personal property or cash if you don’t use the homestead exemption
Confirming the New York Bankruptcy Exemptions
This list includes some of the more commonly used New York bankruptcy exemptions, but there are numerous other exemptions available to protect specific property. Additionally, New York updates its exemptions every three years (the next update will take place in April 2015). You can verify the current exemption amounts at the website of the New York Legislature or by checking the statutes yourself. (To learn how to do this, see Nolo’s Legal Research Center).