Updated: April 26, 2019
If you file for bankruptcy in New York, you’ll use New York’ bankruptcy exemptions to protect your property. It’s not uncommon for filers to keep everything they own, but that’s not always the case.
Get detailed information about filing for bankruptcy in New York.
New York Debtors’ Exemption Choice
New York is one of the states that lets you choose between the state exemption list and the federal bankruptcy exemption scheme. You won’t be able to select exemptions from each list—you must pick the system that will work best. If you choose the New York exemptions, you can also use the federal nonbankruptcy exemptions.
Most people will do better using New York exemptions; however, the federal wildcard exemption is more generous and will allow you to protect any property you’d like to keep. It can be useful if you don’t own a home—the New York homestead exemption is much larger than the federal exemption—and would like to protect property that isn’t explicitly covered by a New York exemption, such as a boat, equity in a vacation home, or collectibles.
To learn more, go to Bankruptcy Exemptions.
Couples Can Exempt More Property
Married couples filing together in a joint bankruptcy can double most exemption amounts if both spouses have an ownership interest in the exempt property.
New York Bankruptcy Exemption List
Unless indicated otherwise, all references are to the New York Code Civil Practice Law and Rules (NYCPLR). You can find New York’s laws on the New York State Senate website.
New York Homestead Exemption
A debtor can protect the equity in a house, condominium, co-op, or mobile home used as a residence up to the following values:
- $170,825 in Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and, Putnam counties.
- $142,350 in Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties, and
- $85,400 in all remaining counties.
(§§ 5206 (a), (d), and (e).)
To learn more, see The New York Homestead Exemption.
New York Motor Vehicle Exemption
A filer can exempt the equity in one motor vehicle up to $4,550 in value or up to $11,375 if the vehicle is equipped for use by a disabled debtor.
If you have more vehicle equity than you can exempt, and you don’t use the homestead exemption, you can add the wildcard exemption and protect an additional amount. (§§ 5205 (a)(8).)
New York Wildcard Exemption
Exemptions protect necessary items that you’ll need to work and live. The New York wildcard exemption allows you to protect any personal property of your choice (not real estate) or cash up to a value of $1,150. This exemption is available only if you don’t use the homestead exemption. (§§ 5205 (a) (9).)
Other New York Exemptions
You can protect up to $11,375 of the following items under § 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; other books up to $575 in value; seat or pew used for religious worship; domestic animals and food for you and your family for 120 days up to $1,150 per person; clothing, furniture, refrigerator, radio, television, computer, cell phone, kitchenware, prescribed health aids; wedding ring; watch/jewelry/art up to $1,150 in value.
- Property or damages arising from the loss or damage to 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.
- All property held in a spendthrift trust for a debtor if the trust was created by or proceeded from someone other than the debtor.
- Uniforms, arms, and equipment used in military service and pensions and awards awarded for military service.
- A debtor who doesn’t claim the homestead exemption can exempt cash up to the lesser of $11,375 minus the value of property exempted under 5205, or $5,700 cash if not using the homestead exemption. (Debtor & Creditor Law § 283(2).)
Other Personal Property
- § 5205 - Security deposits 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 $11,375 of value if you own the account; cash surrender value of insurance policies.
- § 5206 - Burial plot no larger than 1/4 acre with no building or structure (other than headstone or monument) on it.
- Banking § 407 - $600 on deposit with a savings and loan association.
Tools of the Trade
- § 5205 - Tools necessary for your profession up to $3,400 in value.
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 to the extent reasonably needed for support.
Pensions and Public Benefits
- § 5205, Debtor & Creditor § 282 – IRA, 401(k), Keogh, or another qualified retirement plan; Social Security, unemployment, disability, public assistance, workers’ compensation or veterans' benefits.
- Debtor & Creditor § 282 – Benefits from crime victim’s reparations laws, payment for the wrongful death of your dependent or a person upon whom you were dependent and up to $8,550 for personal bodily injury.
- Debtor & Creditor § 282 - Aid to blind, aged, disabled, crime victim's compensation, home relief, local public assistance, Social Security benefits, unemployment compensation, veterans' benefits, workers' compensation.
Qualified retirement accounts are exempt under the federal rules and can be used in every state, regardless of the exemption scheme used. For current amounts, see Your Retirement Plan in Bankruptcy.
Lawsuit Awards and Settlements
- $8,550 in damages compensating you for a personal injury if your settlement or lawsuit award must state that the money is compensation for bodily injury; otherwise, the trustee may argue that the exemption does not apply. This law does not protect lawsuit money that you receive for pain and suffering. (Debtor & Creditor § 282(3)(iii).)
- Lawsuit money for stolen, lost, or damaged property if you could have exempted the property you’re your bankruptcy filing is within one year from the date you received the funds. (NYCPLR § 5205(b).)
- Lost future earnings that compensate you or someone upon whom you depend for support and compensation for the wrongful death of someone you relied on for support is exempt up to an amount reasonably necessary to support you and your dependents. (Debtor & Creditor § 282(3)(ii),(iv).)
Confirming New York Bankruptcy Exemptions
You should be aware that additional exemptions exist. Also, New York’s exemption amounts adjust every three years with the last adjustment occurring on April 1, 2018. You can find the most recent figures on New York’s Department of Financial Services website (search for “Exemption from Application to the Satisfaction of Money Judgments”) or by consulting with a local bankruptcy lawyer.
What Will Happen to Nonexempt Property
Whether you’ll lose or keep nonexempt property depends on the bankruptcy chapter you file.
- In Chapter 7 bankruptcy, the bankruptcy trustee appointed to your case sells any property you can’t exempt and uses the funds to pay debts, such as credit card balances, personal loans, and utility bills.
- In Chapter 13 bankruptcy, you don’t lose your nonexempt property. Instead, you’ll pay the value of nonexempt property to unsecured creditors through your three- to five-year repayment plan in return for being able to keep all of your assets.
Not sure which chapter to file? Start by reading When Chapter 7 Bankruptcy Is Better than Chapter 13 Bankruptcy.
The Trustee Can Object to Your Exemptions
If you don’t exempt your property carefully, you could lose it, or pay for it, depending on the bankruptcy chapter. You’ll want to steer clear of these common issues.
- Do I get to exempt property automatically? In most cases, you’ll be allowed to exempt property that you’ll need to maintain a job and household, such as furnishings, clothing, and some equity in a vehicle. You must list the assets you can protect official bankruptcy form Schedule C: The Property You Claim as Exempt and file it along with other required paperwork.
- Will someone check my exemptions? The bankruptcy trustee—the court-appointed official responsible for managing your case—will review Schedule C to ensure that you have the right to protect the claimed property.
- What if I make a mistake? Most trustees won’t file an objection unless it’s clear that the debtor is trying to pull something over on the court—at least not without trying to resolve the issue first. If there’s a minor exemption problem, the trustee will likely call you to work the issue out informally. If unsuccessful, the trustee will file an objection with the bankruptcy court. The judge will decide the outcome.
Example. Mason owns a rare, classic car worth $15,000 but the state vehicle exemption won’t adequately protect it. Believing that the car qualifies as art—at least in his mind—Mason exempts it using his state’s unlimited artwork exemption. The trustee reviews Schedule C disagrees with Mason’s characterization and files an objection to the exemption with the court. After consideration, the judge will likely side with the trustee and determine that the vehicle doesn’t qualify as a piece of art.
Penalties for Bankruptcy Fraud
It’s worth noting that it’s not a good idea to finesse exemptions. Not only do you have an obligation to supply correct information on your bankruptcy forms, purposefully making inaccurate statements could be considered fraudulent. Bankruptcy fraud is punishable by up to $250,000, 20 years in prison, or both.
Learn more about bankruptcy fraud and how to prove bankruptcy fraud.