New York Bankruptcy Exemptions

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

Like all states, New York has a set of exemptions you can use to protect property when filing for bankruptcy, such as a home, car, and retirement account. In this article, you'll learn:

  • how long you must live in New York before using its exemptions
  • whether New York exemptions will protect all of your property, and
  • what will happen to any property you can't exempt.

If you have more questions, read How Does New York Bankruptcy Work? Not only will you find answers, but it includes helpful checklists and a link to an interactive bankruptcy quiz. Or, try the start-to-finish bankruptcy guide, What You Need to Know to File for Bankruptcy in 2021.

How New York Bankruptcy Exemptions Work

You can protect property covered by an exemption regardless of whether you file for Chapter 7 or 13. But each chapter treats nonexempt property—things not covered by an exemption—differently.

  • In Chapter 7 bankruptcy, the bankruptcy trustee sells nonexempt property and distributes the proceeds to creditors.
  • In Chapter 13 bankruptcy, you keep everything you own. However, you must pay the value of the nonexempt property equity in your repayment plan, or your disposable income, whichever is more.

The different approaches ensure that creditors receive the same amount regardless of the chapter filed.

When You Can Use New York Bankruptcy Exemptions

You can file for bankruptcy in New York after living there for more than 180 days. However, you must live in New York much longer before using New York exemptions—at least 730 days before filing, to be exact. Otherwise, you'd use the previous state's exemptions.

But suppose you weren't living in any particular state during the two years before filing for bankruptcy. In that case, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing. (11 U.S.C. § 522(b)(3)(A).) Learn more about filing for bankruptcy after moving to a new state.

Choosing the Best Exemption System

New York is one of the handfuls of states that let 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.

Common New York Bankruptcy Exemptions

Here are some of the most commonly used New York exemptions. Keep in mind that 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 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:

  • $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).) 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 $4,825 in value or up to $11,975 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. (CPLR §§ 5205 (a)(8).)

New York Wildcard Exemption

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).)

Other New York 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) on it.

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.

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.
  • 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

  • $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 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).)

Avoiding Exemption Issues in New York

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

Do I automatically get to keep exempt property? Generally, no. In most cases, you can exempt property needed to maintain a job and household, such as furnishings, clothing, and some vehicle equity. You'll select the New York exemption set that best protects your property, list your assets on 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 tasked with managing your case—will review Schedule C to ensure that 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 won't adequately protect it. Believing that the car qualifies as art—at least in his mind—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 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 out the issue informally.

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.

Confirming New York Bankruptcy Exemptions

Unless indicated otherwise, all references are to the New York Code Civil Practice Law and Rules (NYCPLR), and New York's laws on the New York State Senate website.

You should be aware that additional exemptions exist and New York's exemption amounts adjust every three years (the last adjustment occurred on April 1, 2021). While you can read the statutes on the New York State Senate website, you'll 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.

Need More Help?

You might not know this, but Nolo has been making the law easy for DIYers for over fifty years. If you have questions, use the links we've included throughout for more details. Otherwise, you'll find the answers to almost all of your bankruptcy questions at nolo.com/legal-encyclopedia/bankruptcy.

This overview cannot provide all of the information you'll need to file a bankruptcy case. For more detailed information, consider buying a self-help book such as How to File Chapter 7 Bankruptcy by Attorney Cara O'Neill and Albin Renauer J.D.

Updated July 6, 2021

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