What Are the New York Bankruptcy Exemptions?

What Are New York’s Bankruptcy Exemptions and Why Are They Important in Chapter 7 Bankruptcy?

Bankruptcy exemptions help you keep your essential belongings when you file for bankruptcy. When you file Chapter 7 bankruptcy, your goal is to get a fresh start. Many people mistakenly think that filing for bankruptcy means losing all of their property. Fortunately, this isn’t true. Exemptions let you keep your property so you can maintain a basic standard of living.

Bankruptcy laws don’t let you keep luxury items like high-end cars or expensive jewelry. But most of the things you use daily can be protected by exemptions.

Does New York Allow Filers To Use Federal Bankruptcy Exemptions?

Yes. If you are a New York resident filing Chapter 7 bankruptcy, you get to choose whether to use  federal bankruptcy exemptions or the state’s exemptions. You have to choose one or the other, though. You can’t use both. To use the New York state exemptions, you must be a resident for at least two years before you file your case.

This article can help you get an idea of which set of exemptions will be most beneficial to you. Compare the exemptions for property you own to see which will best protect the things you own and care about. If you aren’t sure which to choose, you can schedule a free consultation with a bankruptcy attorney to get some personalized advice.

New York State Bankruptcy Exemptions

Bankruptcy exemptions fall into three broad categories:

• Real property, like your home

• Personal property, like household goods and your car

• Intangible property, like pensions and insurance

In the following sections, we’ll explore exemptions in each category.

Real Property: The New York Homestead Exemption

The homestead exemption protects the equity you have in your home up to a certain amount. In New York, this amount varies based on where you live.

• If you live in Queens, Kings, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, or Putnam counties, you can exempt up to $170,825 of equity in your home. 

• If you live in Dutchess, Albany, Columbia, Orange, Saratoga, or Ulster counties, you can exempt up to $142,350 of equity in your home. 

• If you live in any other county within the state other than the ones listed above, you are allowed to protect up to $85,400 of equity in your home. 

Remember that equity is equal to your home’s current market value minus what you have left to pay on your mortgage. Also, keep in mind that married couples can double these exemptions as long as they both are on the deed to the home. You can also protect a burial plot no larger than a quarter-acre with no building or structure (other than a headstone or monument) on it.

No matter where you live in New York, the state homestead exemption is much more generous than the $27,900 federal homestead exemption. So if you own a home in New York state, you will likely want to use the state’s exemptions.

Personal Property Exemptions 

Consumers filing bankruptcy can keep all personal property that’s covered by exemptions. The following household goods and furnishing are fully protected under state exemptions unless otherwise noted:

• Appliances, including stoves, 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 $500 in value

• Seat or pew used for religious worship 

• Domestic animals

• Food necessary for you and your family for 120 days, up to $1,000

• Clothing and household furnishings, including one refrigerator, radio, one television, one computer, one cell phone, kitchenware, prescribed health aids, wedding ring, watch, and jewelry 

• Art up to $1,000 in value

• Necessary tools for your trade (if you work or own a business), up to $3,000 in value

• Uniforms, arms, and equipment used in military service and pensions and awards awarded for military service

• Service animals and necessary medical and dental accessories

Source: NY CPLR § 5205(a)(1) through (5), NY CPLR § 5205(a)(6), NY CPLR § 5205(a)(7)

Motor Vehicle Exemption 

Filing bankruptcy doesn’t mean you have to give up your car. New York bankruptcy exemptions allow you to exempt the equity in one vehicle as long as it does not exceed $4,825. If the vehicle is equipped for a disabled person then you can protect $11,975 of equity in the motor vehicle.

Most filers are worried about whether they’ll get to keep their car if they have a car loan. To learn more about that check out Can I Keep My Car If I File Chapter 7 Bankruptcy?

Source: NY CPLR § 5205(a)(8) and NY CPLR § 5205(a)(8)

Wildcard Exemption

The $1,100 wildcard exemption in New York allows you to keep property — except real property — that isn’t otherwise protected by exemptions. But you can only use this exemption if you haven’t used the homestead exemption. 

Source: NY CPLR § 5205(a)(9)

Money Benefits & Other New York Exemptions 

There are several different types of money benefits that are exempt in New York. The following are fully exempt unless otherwise noted:

• Security deposits for rental real estate or utilities

• College tuition: New York State College Choice Tuition Savings Program payments for the benefit of a minor or up to $11,375 of value if you own the account

• Banking: $1,740 on deposit in any bank account

• All property held in a spendthrift trust for a debtor if the trust was created by someone other than the debtor

• Retirement accounts: IRA, 401(k), Keogh, or another qualified retirement plan 

• Public assistance

• Damages owed to you for damaged property, for up to one year after collection of proceeds 

Source: NY CPLR § 5205(g), NY CPLR § 5205(j), NY Banking Law § 236, NY CPLR § 5205(c), NY CPLR § 5205(c)(2), NY CPLR § 5205(b)

Wages 

New York law allows you to protect:

• 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 U.S. armed forces or New York military forces

• Court-ordered alimony, maintenance, or child support to the extent reasonably needed for support

Source: NY CPLR § 5205(d),(e),(f)

Public Assistance 

Filers can protect the following types of public assistance: 

• Aid to blind, aged, disabled

• Crime victim's compensation

• Home relief

• Local public assistance

• Social Security benefits

• Unemployment compensation

• Veterans' benefits

• Workers' compensation

Source: NY CPLR § 5205(I)

Lawsuit Settlements

You can exempt $8,550 in damages compensating you for a personal injury. This exemption is only allowed if the award specifically states that the money is being given for compensation for bodily injury. This doesn’t allow you to protect any money that you receive for pain and suffering.

You can exempt future earnings that compensate you or someone upon whom you depend for support up to an amount reasonably necessary to support you and your dependents. 

Source: NY CPLR § 5205(a)(11)(e)

Bodily Injury

You can protect 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.

Source: NY CPLR § 5205(a)(11)(e)

Comparing the Federal Exemptions

As previously mentioned, you’ll have to compare New York’s exemptions with the federal exemptions to decide which set you want to use to protect your property. Here’s a list of the most commonly used federal exemption for your reference:

Source: 11 U.S.C. § 522(d)(1), 11 U.S.C. § 522(d)(2), 11 U.S.C. § 522(d)(4), 11 U.S.C. § 522(d)(3), 11 U.S.C. § 522(n), 11 U.S.C. § 522(d)(8), 11 U.S.C. § 522(d)(6), 11 U.S.C. § 522(d)(11)(D), and 11 U.S.C. § 522(d)(11)(D)

Need Help Filing Chapter 7 Bankruptcy?

If you’re feeling overwhelmed trying to understand exemptions and the other rules of bankruptcy, it might be time to enlist some help. Take our screener to see if you’re eligible to file your case using Upsolve’s free filing tool. You can also schedule a free consultation with a bankruptcy attorney if you have questions about exemptions or how to protect your property.