New York Bankruptcy Exemptions

Learn how New York's bankruptcy exemptions protect your home, car, personal property, and more.

By , Attorney · University of the Pacific McGeorge School of Law

Table of Contents

New York bankruptcy exemptions protect your property in bankruptcy, and becoming familiar with bankruptcy exemptions before filing will help you determine whether your assets will be at risk.

If you have more questions, read How to File for Bankruptcy in New York State (NY). You'll find answers, helpful checklists, and an interactive bankruptcy quiz link.

How Do Bankruptcy Exemptions Work?

Bankruptcy helps struggling people get back on their feet by lessening their debt burden, not stripping them of everything they own. Exemptions allow bankruptcy filers to keep things needed to maintain a home and employment.

But paying creditors is also an important consideration. Bankruptcy exemptions balance these interests by letting filers keep necessary property but not unnecessary luxury items. Creditors receive bankruptcy funds when a bankruptcy filer owns "nonexempt" property not covered by a bankruptcy exemption.

How Do I Use New York Bankruptcy Exemptions to Protect Property?

You'll compare your property to New York's exemption laws. In most states (not all), debtors can use exemption laws to keep property from a creditor's reach in and outside bankruptcy.

Example. Big Creditor sued Ronin and received a $5,000 money judgment. When Big Creditor attempted to "levy" or remove money from Ronin's bank account, Ronin objected in court. Because the state's exemption law allowed Ronin to protect $1,500 of funds in a bank account, Big Creditor could seize only $3,500.

Example. When Maria filed for bankruptcy, she also had $5,000 in her checking account. She listed the state's $1,500 cash exemption in her bankruptcy petition and gave the nonexempt $3,500 to the bankruptcy trustee.

Will New York Bankruptcy Exemptions Protect My Property?

Yes, but you have two choices in New York. You can use New York state exemptions and federal nonbankruptcy exemptions. Or you can use federal bankruptcy exemptions. You'll find both lists below. In many cases, married filers can double the exemption amount when filing together when they both own the property. Check with a local bankruptcy lawyer for specifics.

What Are Commonly Used Bankruptcy Exemptions in New York?

New York bankruptcy filers can protect home equity using the New York homestead exemption, equity in a car using the New York motor vehicle exemption, and more.

New York Homestead Exemption

Generally, the homestead exemption protects equity in the home you live in. A New York debtor can protect the equity in a house, condominium, co-op, or mobile home used as a residence up to the following values:

  • $179,950 in Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, and Putnam counties.
  • $149,975 in Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties, and
  • $89,975 in all remaining counties.

(CPLR §§ 5206 (a), (d), and (e).) Learn more about the New York homestead exemption and protecting your home in bankruptcy.

New York Motor Vehicle Exemption

You won't lose your transportation if you file for bankruptcy. In New York, you can protect up to $4,825 in value or up to $11,975 if the vehicle is equipped for use by a disabled debtor. (CPLR §§ 5205 (a)(8).)

Example. Jolene owns a 2008 Toyota Camry worth $12,000. She owes the dealer $10,000, leaving $2,000 of equity. She can file for bankruptcy in New York and use the $3,000 motor vehicle exemption to protect her vehicle fully.

Learn more about protecting cars in bankruptcy and how the motor vehicle exemption works in a Chapter 7 case.

New York Wildcard Exemption

A wildcard exemption protects any property of your choosing. 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 $1,175 if you don't use the homestead exemption. (CPLR §§ 5205 (a) (9).)

New York Pension and Retirement Benefits

Most tax-exempt pensions and retirement accounts are exempt, even if you choose the New York exemptions instead of the federal exemptions because federal law lets filers keep tax-exempt retirement accounts in bankruptcy. These retirement accounts include 401(K)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and traditional and Roth IRAs to $1,512,350 per person. (11 USC 522(b)(3)(C); (n); amounts valid for bankruptcy cases filed between April 1, 2022, and March 31, 2025.)

You can check with your fund to find out if it qualifies for tax-exempt status. Additionally, New York provides that IRA, 401(k), Keogh, or other qualified retirement plans are exempt under New York law.

More New York Bankruptcy Exemptions

You can protect up to $11,975 of the following items under CPLR § 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 $600 in value; seat or pew used for religious worship; domestic animals and food for you and your family for 120 days up to $1,175 per person; clothing, furniture, refrigerator, radio, television, computer, cell phone, kitchenware, prescribed health aids; wedding ring; watch/jewelry/art up to $1,175 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.
  • Cash and banking account balances to $6,000.

Other Personal Property

  • CPLR § 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.
  • CPLR § 5206 - Burial plot no larger than 1/4 acre with no building or structure (other than headstone or monument).

Tools of the Trade

  • CPLR § 5205 - Tools necessary for your profession up to $3,575 in value.

Wages and Income

  • CPLR § 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.
  • CPLR § 5205; Debt – Court-ordered alimony, maintenance or child support to the extent reasonably needed for support.

Public Benefits

  • Debtor & Creditor § 282 – Benefits from crime victim's reparations laws.
  • Debtor & Creditor § 282 - Aid to blind, aged, disabled, crime victim's compensation, home relief, local public assistance, Social Security benefits, unemployment compensation, veterans benefits, and workers' compensation.

Lawsuit Awards and Settlements

  • $9,000 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 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).)

How Do I Find New York Bankruptcy Exemptions?

New York's exemption amounts adjust every three years, and the amounts in this article reflect the April 1, 2021 adjustment. All New York statutory references are to the New York Code Civil Practice Law and Rules (NYCPLR).

You can read the statutes on the New York State Senate website, but the statutes aren't updated with the most recent amounts. Go to New York's Department of Financial Services website and search for "Exemption from Application to the Satisfaction of Money Judgments" for current figures or consult a local bankruptcy lawyer.

How Do Federal Bankruptcy Exemptions Compare to New York's Exemptions?

The exemption set best for you will depend on the property you own. You can't select exemptions from both lists, so choose the most advantageous set. You'll find some of the federal exemptions below. Federal exemption amounts will be adjusted on April 1, 2025.

Homestead Exemption

  • You can protect $27,900 of equity in your principal residence under federal exemptions. (11 USC § 522(d)(1).)
  • You must live in the home to use the homestead exemption.
  • The residential property can be a house or another dwelling, such as a condominium, or personal property used as a residence (such as a residential trailer).
  • This exemption doesn't cover investment or rental properties.

Personal Property

  • $4,450 for your motor vehicle. (11 USC § 522(d)(2).)
  • $1,875 for jewelry. (§ 522(d)(4).)
  • $700 per individual item with a $14,875 aggregate value on household goods, furnishings, appliances, clothes, books, animals, crops, musical instruments. (11 USC § 522(d)(3).)
  • $2,800 for tools of the trade, including implements and books
  • health aids. (11 USC § 522(d)(6).)
  • $14,875 in loan value, accrued dividends, or a life insurance policy interest. (11 USC § 522(d)(8).)

Domestic Support and Public Benefits

  • spousal support or child support you reasonably need for your support
  • life insurance payments required for your support, and
  • all Social Security benefits, unemployment benefits, veteran's benefits, public assistance, and disability or illness benefits.

Personal Injury Recoveries

  • $27,900 for personal injury except for pain and suffering or monetary loss. (11 USC § 522(d)(11)(D).)
  • any award for the loss of future earnings needed for support
  • any recovery for the wrongful death of the person relied on for support, and
  • all compensation received due to being a crime victim.

Retirement Accounts

If your retirement account is exempt from taxation, it's exempt in bankruptcy. The limits for IRAs and Roth IRAS is $1,512,350.

"Wildcard" Exemption

The federal wildcard exemption is $1,475 plus $13,950 of any unused portion of your homestead exemption is available to exempt any property of your choosing. (11 USC § 522(d)(5).)

What Happens to Property I Can't Exempt in a New York Bankruptcy?

One of two things will happen. You'll either lose nonexempt property or pay to keep it, depending on whether you file for Chapter 7 or Chapter 13. Here's how it works.

In Chapter 7, the bankruptcy trustee sells nonexempt property and distributes the proceeds to creditors. In Chapter 13, filers pay the value of the nonexempt property to unsecured creditors. Learn about secured and unsecured debt in bankruptcy.

The procedural differences are necessary because filers can keep all property in Chapter 13 but not in Chapter 7. Without different systems, creditors would receive less in Chapter 13 than in a Chapter 7 case.

Example. Suppose you couldn't exempt a motorcycle in Chapter 7, and the Chapter 7 trustee sold it and paid unsecured creditors $10,000 after deducting sales costs. If you filed for Chapter 13, you'd pay unsecured creditors at least $10,000 through the Chapter 13 repayment plan to keep the motorcycle.

What Are the Differences Between Chapters 7 and 13 Bankruptcy?

Chapter 7 works for people who can't afford to repay creditors. Chapter 13 filers typically earn too much to qualify for Chapter 7 and must pay into a five-year repayment plan. Before filing for bankruptcy, you'll take a "means test" to determine whether you qualify for Chapter 7 or 13.

Occasionally, people qualifying for Chapter 7 file for Chapter 13 to prevent a home foreclosure, car repossession, or wage garnishment. The Chapter 13 plan allows the filer to catch up on back payments over time, a benefit not available in Chapter 7.

How Long Does it Take to File for Bankruptcy in New York?

Most Chapter 7 cases close after four months, although the Chapter 7 bankruptcy trustee sometimes needs additional time to sell property or resolve a dispute. Chapter 13 cases take three to five years to complete.

How Long Do I Have to Live in New York Before I Can Use Its Bankruptcy Exemptions?

You can file for bankruptcy in New York after living there for over 180 days. However, you must live in New York for at least 730 days before using New York exemptions. Otherwise, you'd use the previous state's exemptions.

Suppose you hadn't lived in one state the entire two years before filing. In that case, you'd use the exemptions of the state you lived in the longest during the 180 days before the two years immediately preceding your filing. (11 U.S.C. § 522(b)(3)(A).)

More rules exist, including requirements for multiple bankruptcy filings. Find out more about filing for bankruptcy after moving to a new state and who can and can't file for bankruptcy.

How Can I Avoid Bankruptcy Exemption Problems in New York?

If you don't exempt your property carefully, you could lose it. Answers to these questions might help you steer clear of typical issues.

Do I automatically get to keep my exempt property? Generally, no. Here's the procedure you'll need to follow: Select the exemption set that best protects your property, list the exempt assets and applicable exemption laws on Schedule C: The Property You Claim as Exempt, and file it with your other required paperwork.

Will someone check my bankruptcy exemptions? The bankruptcy trustee, the court-appointed official tasked with managing your case, will review Schedule C to ensure you have the right to protect the claimed property. A trustee who disagrees with your exemptions will file an objection with the court. The judge will decide whether you can keep the property.

Example. Jeff owns a rare, classic car worth $15,000, but the state vehicle exemption will only partially protect it. Believing that the car qualifies as art, Jeff exempts it using his state's unlimited artwork exemption. The trustee reviews Schedule C, disagrees with Jeff's characterization, and files an objection with the court. After consideration, the judge will likely side with the trustee, determining that the vehicle doesn't qualify as a piece of art.

What Will Happen If I Make an Exemption Mistake in New York?

Most trustees will likely try to work out the matter informally by discussing it at the 341 meeting of creditors or by phone or email. If you can't resolve the problem, the trustee will file a motion with the bankruptcy court.

It's worth noting that it's not a good idea to finesse exemptions. Not only are you obligated to supply correct information on your bankruptcy forms, but purposefully making inaccurate statements could be fraudulent. Bankruptcy fraud is punishable by up to $250,000, 20 years in prison, or both.

Should I Hire a Lawyer to Help With Bankruptcy Exemptions in New York?

Chapter 13 bankruptcy filers will almost always want to hire a bankruptcy lawyer. Chapter 13 is too complicated for most people to navigate successfully.

Chapter 7 filers also benefit from hiring a bankruptcy lawyer. Still, it's more feasible to represent yourself if you have a relatively simple Chapter 7 case. But you should know that Chapter 7 filers can't dismiss a Chapter 7 matter without court approval, so it's prudent to consult a bankruptcy lawyer about potential issues. The extra step could help prevent unexpected property loss.

How Much Does It Cost to File for Bankruptcy in New York?

You can expect to pay $1,500 to $2,500 for the average Chapter 7 case and more for a Chapter 13 matter. Bankruptcy lawyers with more experience will charge higher fees than those practicing in large cities because of the costs associated with doing business.

Even so, most bankruptcy matters won't require a top-tier lawyer. But because of the specialized nature of bankruptcy rules, you will want someone who has filed many cases.

At the time of writing, filing fees are $338 for Chapter 7 and $313 for Chapter 13, and costs for mandatory credit counseling and debt management courses run $50 to $75.

Can I Make Payments to My Bankruptcy Lawyer?

No, not in a Chapter 7 case. Chapter 7 lawyers won't file your matter before you've paid in full because the bankruptcy court would erase any outstanding balance with other dischargeable debts. You can pay Chapter 13 attorneys' fees in installments through the Chapter 13 plan.

Need More Bankruptcy Help?

Did you know Nolo has made the law easy for over fifty years? It's true, and we want to ensure you find what you need. Below, you'll find more articles explaining bankruptcy and how it works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!

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We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.

Updated August 28, 2023

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