September 25, 2017
If you file for Chapter 7 bankruptcy in New York, New York’s bankruptcy exemptions will help you protect some or all of your assets. New York’s bankruptcy exemptions also play a role in determining how much you’ll repay creditors in a Chapter 13 bankruptcy three- to five-year repayment plan (you must pay for nonexempt property). In this article, you’ll learn more about protecting your property in a New York bankruptcy.
Federal Exemptions Available in New York
All states, including New York, have a set of exemptions for use when filing for bankruptcy. Federal law has a set, as well. If you file for bankruptcy in New York, you can choose either the New York or the federal bankruptcy exemptions, but you can’t mix and match between the two. Filers who use the New York bankruptcy exemptions can also use the federal nonbankruptcy exemptions to protect assets such as federal and military retirement accounts and veterans' benefits.
In most cases, you’ll do better using New York’s exemption scheme; however, the more generous federal wildcard exemption will allow you to protect property of your choosing, and might help you protect property that isn’t specifically covered by a New York exemption, such as a boat, equity in a vacation home, or collectables.
(To learn more, go to Bankruptcy Exemptions.)
Common New York Bankruptcy Exemptions
Below is a list of commonly used New York bankruptcy exemptions. Married couples filing a joint bankruptcy in New York can “double” the exemptions, meaning they each can claim the full exemption amount for any property belonging to both of them. Unless otherwise indicated, all references are to the New York Code Civil Practice Law and Rules (NYCPLR).
You can protect 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 resides:
- $165,550 in Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and, Putnam counties
- $137,950 in Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties, and
- $82,775 in all remaining counties.
To learn more, see The New York Homestead Exemption.
- § 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 $11,025 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.
You can protect up to $11,025 of the following items (NYCPLR § 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 $550 in value; seat or pew used for religious worship; domestic animals and food for you and your family for 120 days up to $1,100 per person; clothing, furniture, refrigerator, radio, tv, computer, cell phone, kitchenware, prescribed health aids; wedding ring; watch/jewelry/art up to $1,100 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 you.
- Uniforms, arms, and equipment used in military service and pensions and awards awarded for military service.
- Up to $5,525 cash if not using the homestead exemption.
- $1,100 of any personal property or cash if you don’t use the homestead exemption (called a “wildcard exemption”).
One motor vehicle up to $4,425 in value or up to $11,025 if equipped for use by a disabled debtor. If you have more equity than you can exempt, and you don’t use the homestead exemption, you can use the wildcard exemption to protect up to $5,525.
Tools of the Trade
- § 5205 - Tools necessary for your profession up to $3,300 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 wrongful death of your dependent or a person upon whom you were dependent and up to $8,275 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.
Lawsuit Awards and Settlements
- $8,275 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 the New York Bankruptcy Exemptions
This list includes some of the more commonly used New York bankruptcy exemptions, but others exist and exemption amounts change, as well. You should independently verify all exemptions or speak with a bankruptcy attorney before filing for bankruptcy. (To learn how to do this, see Nolo’s Legal Research Center).