Protect Your Assets With New York Bankruptcy Exemptions
New York is no exception with regards to bankruptcy procedures as well as making exceptions to certain limited assets being exempted from liquidation or distribution by the bankruptcy court, as bankruptcy lawyers in Brooklyn, NY, see on a regular basis.
In all cases where the filer has pursued a Chapter 7 filing or similar, the federal bankruptcy court then makes an inventory of all assets still owned and determines what can be liquidated to settle outstanding debts before releasing the filer entirely. This means savings accounts, jewelry, real property, and anything of value becomes eligible for the court’s review.
What To Reasonably Expect Will Qualify
The most common exemptions are intended to allow the filer to retain the ability to live in a home for immediate personal use as well as have transportation to get to work or find income-earning work. So, when filing a Chapter 7 bankruptcy filing and requesting release, one can expect some basic exceptions within reason. No one should expect to keep multiple cars, substantial bank accounts, or a sizable home that can be replaced with a smaller one for basic living and shelter.
Both Chapter 7, full release, and Chapter 13, reorganization, affect a filer’s property. Again, Chapter 7 determines whether it can be used for liquidation, and Chapter 13 tends to require that the filer repay the value of the property that could be used within the repayment plan. Either way, declared creditors are going to get their balance of what the property is worth via the court’s decision and review.
New York Bankruptcy Exemptions Criteria
There are basic criteria that must be met prior to filing for bankruptcy and exemptions. These include:
- The filer must have been a resident in New York for at least 180 days to file.
- The filer must have been a resident in New York for at least 730 days to request approval of allowed exemptions. If less, then the filer’s status falls under the state that they last lived in. If out of the country prior, then it would be whichever state one lived in most of the prior 180 days.
New York also allows various miscellaneous exemptions totaling $11,975 for various personal assets ranging from fixtures, educational materials, personal computers, clothing, personal jewelry, and furniture. Cash and bank accounts can be exempted up to $6,000 as well.
Multiple specific exemptions are also available for rental security deposits, tools of the trade, income received before filing up to 60 days prior, pension and disability benefits, IRAs and retirement accounts, and limited amounts of judgments or settlements won prior to bankruptcy.
Anything not specifically exempted and approved by the court can be subject to liquidation or be included as the value in a required repayment plan. The bankruptcy trustee, a financial officer of the court, verifies the information provided by the filer and has the power to investigate the filer’s assets. Lying is a criminal offense under the perjury laws of NY state and the federal government as well, which could result in a hefty fine and prison time.
What Assets Are Protected in Bankruptcy?
Interestingly, filers in New York get to choose between the state exemptions or the federal system. Only one choice can be used, so it’s smart to do one’s research and plan out the implications of either before making a selection. Under New York state exemptions, the following property can be protected from bankruptcy:
- A home worth $89,975 to $179,950, depending on the county. Different values apply to different NY counties, so be sure to check your residence location first to know the exact value that applies.
- A vehicle worth up to $4,825 or, if disabled, up to $11,975.
- A wildcard exemption allows another $1,175 to a single, specific asset aside from real estate or a cash amount equaling the same if the homestead exemption (house) is not used.
Note that these figures double in value if the filer and spouse file for bankruptcy jointly.
Protect Your Assets With Our Brooklyn Bankruptcy Attorney
The Ursulova Law Offices can help. You don’t need to struggle with filing for bankruptcy alone. The paperwork involved in filing and requesting exemptions can be extremely confusing, and filing the wrong information can be a serious mistake.
