21 Oct Bankruptcy Exemptions in New York State
When filing bankruptcy, a clients first question often involves whether or not they can keep things they own, like their home, their car, or their 401(k).
These questions are important, and the answer to the question is two-fold:
1. Is there a lien against the property?
2. If no lien exists, what Bankruptcy Exemptions are available?
If there is a lien against the property, which is equal to, or more than the value of the property, as long as you remain current on the payments for that house or car, you will be able to keep the property.
If there is no lien, or the lien is less than the value of the property, you have some equity in the property. When you have equity in property, your attorney must review the exemptions available to you, and determine if there is an exemption available which will protect that asset.
Individual states have the right to use the Federal Bankruptcy Exemptions, or to set their own. In New York State, debtors in Bankruptcy are usually entitled to use the New York State Exemptions. There are rules regarding debtors who have not resided in New York for all of the last two years, and the exemptions they are required to use, so if you have recently moved to New York, discuss with your attorney what exemptions will be available to you.
Below is a list of the common exemptions available in New York State:
- $50,000 in equity in the home, condo or mobile home that you live in; a married couple will be entitled to a $100,000 exemption
- If you do not own a home, or if you have no equity in your home and do not need the homestead exemption, you may exempt $2,500 in cash or deposits in the bank, $5,000 for a couple
- $2,400 in equity in a vehicle
- 100% of valid 401(k), 403(b), IRA accounts, and other ERISA qualified retirement savings accounts
- Up to $5,000 in household goods, valuing those household goods with a craigslist or yard-sale value
- 100% of funds on deposit in a valid college tuition savings program trust fund for a child
- A wedding ring, no matter the value (though not an engagement ring)
- Tools necessary for your trade or business, up to $600
- Pension, social security or workers compensation benefits
- Child support and alimony payments, to the extent necessary for the support of the debtor and his or her children
- Up to $7,500 in a recovery from a personal injury action
- Domestic animals, and 60 days of food up to a value of $450
Additional exemptions do exist, so if you have an interest in any other types of property you are concerned about, be sure to discuss those assets with a qualified attorney, such as one of the attorneys on the Bankruptcy Law Network.
Bankruptcy exists to provide debtors with an opportunity to obtain a fresh start. Thanks to the Bankruptcy Exemptions, that fresh start should include your home, your car, your favorite arm chair, and even or especially Fido the dog.
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