New York Bankruptcy Exemptions – Part Three – The Homestead Exemption

11 Aug New York Bankruptcy Exemptions – Part Three – The Homestead Exemption

The Homestead Exemption is the most important New York State bankruptcy exemption for home-owners. Shortly before the new bankruptcy law (BAPCPA) went into effect in 2005, the New York State Legislature increased the homestead exemption from $10,000 to $50,000 per debtor. This was an attempt by the legislature to offset some of the harsh anti-consumer provisions of BAPCPA. (They failed, however, to increase any other exemption amount.)

What a $50,000 homestead exemption means is that you can have up to $50,000 of equity in your residence ($100,000 for a married couple) and your home will not be taken or threatened by the bankruptcy trustee. Of course, if you have a mortgage, you must keep paying it, or the mortgage holder can foreclose on the home.

As a result of increasing the homestead exemption a number of people can now file a Chapter 7, where previously they could not because they would lose their homes. This is particularly important for the elderly who have paid off the mortgage on their inexpensive home but cannot afford to file a chapter 13 because of their limited fixed income.


Go to Part Four Protecting Non-Exempt Assets in Chapter 13


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Peter Orville is a bankruptcy lawyer in Binghamton, located in the Southern Tier of New York. He is a member and New York co-chair of the National Association of Consumer Bankruptcy Attorneys.
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