The New York Homestead Exemption

If you're considering filing for bankruptcy in New York, the New York homestead exemption will help you protect the equity in your home. This article explains how much the New York homestead exemption is and how to apply it when you want to keep your house in a New York bankruptcy case.

How Much Is New York's Homestead Exemption?

New York lets filers use either the federal exemption system or New York's state exemption system. However, you can't mix exemptions from both lists, so you'll want to select the system that will protect your most important assets.

To help you make an informed choice, we've listed the federal and state exemption amounts below. We've also included links to more complete federal and state exemption lists so you'll have an easier time deciding which set will work best for you.

Protecting Property With the New York Homestead Exemption

In New York, the homestead exemption applies to real property, including a home, condominium, co-op, or mobile home used as your primary residence. Learn more about filing for bankruptcy in New York.

Other Requirements for Keeping a Home in Bankruptcy

If you can't protect all of your home equity, you might not be able to keep your home. Typically, the Chapter 7 trustee appointed to your case would sell the house, return the exemption amount to you, pay off the mortgage, and pay creditors with the amount remaining after deducting the trustee's fee.

In Chapter 13, the trustee doesn't sell property, so you could keep it. However, that doesn't mean Chapter 13 filers get a break regarding how much equity they can retain. Instead, you'd need to pay creditors the value of the nonexempt equity through the Chapter 13 plan.

But that isn't all. Keeping your home requires being current on the mortgage when filing for Chapter 7. Otherwise, you could lose it to the lender through foreclosure, possibly even during the Chapter 7 case. If you're behind on payments when filing for Chapter 13, you have an option not available in Chapter 7. You can catch up on the payments over time through the plan.

Learn about other requirements you must meet in Your Home in Chapter 7 and Your Home in Chapter 13. Also, find out why filing for Chapter 13 is better than Chapter 7 when you're behind on payments and don't want to lose your house.

Claiming the Homestead Exemption

When completing your bankruptcy forms, you'll do the following:

• disclose your home on Schedule A/B: Property
• list your home and the homestead exemption law on Schedule C: The Property You Claim as Exempt, and
• if filing for Chapter 7, explain whether you plan to keep or surrender the home on Statement of Intention for Individuals Filing Under Chapter 7.

Because your home is likely your most valuable asset, consider consulting with a bankruptcy lawyer to ensure you can protect it in bankruptcy.

Where to Find the Homestead Exemption Statute

New York's homestead exemption is in the New York state statutes, Code Civil Practice Law and Rules § 5206, on the New York State Senate website. The exemption amounts adjust every three years (the figures reflect the April 1, 2024 changes).

But you won't find the most recent homestead amount in the statute. Go to New York's Department of Financial Services website and search for "Exemption from Application to the Satisfaction of Money Judgments." Learn about finding state statutes in Laws and Legal Research.

When You Can Use 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 filing to use the current state's exemptions. Otherwise, you'd use the previous state's exemptions.

If you lived in multiple states during the two years before filing for bankruptcy, you'd use the exemptions of the state you lived in for most of the 180 days before the two years immediately preceding your filing. (11 U.S.C. § 522(b)(3)(A).)

Also, you must own your home in the exemption state for at least 40 months before bankruptcy to avoid the homestead exemption being capped by federal law at $214,000 (amount adjusts on April 1, 2028). Homestead exemption use is also precluded when a filer engages in certain felonious or fraudulent acts. (11 USC §§ 522(p), (q).)

Learn more about filing for bankruptcy after moving to a new state and timing your bankruptcy case. Also, spouses can double some exemption amounts if both parties own the property, but not all of them. Learn about other filing considerations for spouses.

Need More Bankruptcy Help?

Did you know Nolo has made the law accessible for over fifty years? It's true, and we wholeheartedly encourage research and learning. You can find many more helpful bankruptcy articles on Nolo's bankruptcy homepage. Information needed to complete the official downloadable bankruptcy forms is on the Department of Justice U.S. Trustee Program.

However, online articles and resources can't address all bankruptcy issues and aren't written with the facts of your particular case in mind. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.