New York bankruptcy exemptions recently increased

If you file bankruptcy in New York, you may worry that you will lose everything. However, this belief could not be further from the truth. In fact, many people who file bankruptcy are able to keep a great deal of their property.

For instance, federal bankruptcy law expressly permits you to exempt several assets and property from the bankruptcy estate – meaning it is protected and you get to keep it.

Recently, the bankruptcy exemptions allowed under New York law were amended to reflect changes in the economy. Understanding these recent changes is crucial if you want to make informed legal decisions during your own New York bankruptcy filing.

Making the right choice: New York or federal bankruptcy exemptions

In New York, you can use two different sets of bankruptcy exemptions: the ones created under federal law or the ones created under New York law. However, once you select either the federal or New York exemptions, you must stick with that system throughout. You cannot mix and match between the two.

Interestingly, the Department of Financial Services in New York is required by law to adjust the state bankruptcy exemptions every three years to reflect changes in the consumer price index, with the most recent adjustment taking effect on April 1, 2015. Some of the current bankruptcy exemptions allowed under New York law include:

• Homestead exemption, which protects the equity you own in your home up to a predetermined amount that varies by county. In the four counties that make up Long Island – Nassau, Suffolk, Kings and Queens – the homestead exemption is $165,550
• Motor vehicle exemption up to $4,425, which increases to $11,025 if your car is specially equipped to accommodate your disability
• Cash exemption of $5,525, which often only applies if you do not use the homestead exemption
• Retirement benefit exemption, which has no dollar limit
• Exemption of certain types of personal property that has no dollar limit, including clothes, furniture, one fridge, one television, one computer, one cellphone, all tableware and utensils necessary for you and your family
• Exemption for your tools of trade, up to a value of $3,300
• Personal injury benefit exemption, up to a value of $8,275
• Pet exemption, up to a value of $1,100
• Exemption for your wedding ring, plus an exemption up to a value of $1,100 for your watch, other jewelry and art
• “Wildcard” exemption that can be used on any personal property, up to a value of $1,100

It is also important to remember that married couples can double their homestead exemption if they are filing a joint bankruptcy – meaning they can protect up to $331,100 in home equity if they live on Long Island.

Alternatively, some of the more common bankruptcy exemptions permitted under the federal bankruptcy code include:

• Homestead exemption, up to a value of $23,675
• Motor vehicle exemption, up to a value of $3,675
• Exemption for household furniture/goods, up to a value of $12,250
• Retirement benefit exemption, which has no dollar limit
• Personal injury benefit exemption, up to a value of $23, 675
• Jewelry exemption up to a value of $1,600
• There is a wildcard exemption that allows individuals to protect assets to be applied to any non-exempt asset depending upon your home ownership up to an additional $13,100.00

Whether or not you should use the federal or New York bankruptcy exemptions largely depends on your circumstances. Every situation is different, and you need to make sure you select the option that is most advantageous for you, which is why it is often best to speak to an experienced New York bankruptcy attorney. A skilled attorney can answer your questions and help you determine what route is best for you and your family.