Since 2010, New York bankruptcy rules have permitted debtors to choose between the state’s exemptions and the federal exemptions. Before then, New Yorkers could only use the state’s exemptions, and back then they weren’t nearly as strong as now. The state improved the bankruptcy exemptions because the legislature hadn’t given them much attention since the 1980s, when debtors didn’t have computers or cell phones, and their homes were worth much less.
All this raises the question I haven’t directly addressed yet: Just how do New York’s exemptions differ from the federal exemptions? Here’s a table to answer the question, but be warned it’s not exhaustive. The exemptions come with many minutiae.
|Homestead||In New York City’s five counties, plus Nassau, Suffolk, Rockland, Westchester, and Putnam counties: $165,550
In Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties: $137,950
All other counties: $82,775
|Wild Card & Other Cash||$1,100 if debtor does not claim homestead exemption
Debtors who don’t use the homestead exemption also receive the lesser of $5,525 or $11,025 minus their personal-property exemptions, listed below
90 percent of earned but unpaid wages, 100 percent for armed forces personnel
|$1,250 plus up to $11,850 in an unused homestead exemption|
|Automobile||Up to $4,425 unless the vehicle is equipped for disabled persons, then $11,025||$3,775|
|Household furnishings and goods||All clothes, household furniture, plus one refrigerator, radio, television, computer (and related equipment), cell phone, crockery, tableware, and cooking utensils
Stove, home heating equipment, 120 days’ worth of fuel for them, and one sewing machine
$550 in books
120 days’ worth of food for the debtor, and $1,100 in food for up to 120 days for domesticated animals
|$12,625, but no item can be worth more than $600|
|Professional Tools||$3,300, including 120 days’ worth of food for the debtor’s team||$2,375|
|Life Insurance||Acceleration and surrender rights for life insurance policies||Unmatured life insurance contracts, up to $12,625 in accrued life insurance benefits, and all insurance benefits when debtor is dependent on beneficiary|
|Benefits||All of the following: Social Security, unemployment compensation, local public assistance, veterans’ benefits, disability benefits, illness benefits, unemployment benefits, spousal maintenance (to the extent reasonably necessary for the support of the debtor and dependents), retirement benefits
Up to $2,750 in direct or electronic deposits into bank account that receives exempt benefits for up to 45 days
|All of the following: Social Security, unemployment compensation, local public assistance, veterans’ benefits, disability benefits, illness benefits, unemployment benefits, spousal maintenance (to the extent reasonably necessary for the support of the debtor and dependents), retirement benefits|
|Special Rights||The debtor’s right to an award under the crime victim’s reparations law, payments to the debtor on account of a wrongful death of someone upon whom the debtor was a dependent, up to $8,275 in personal injury claims (costs of injury only), and compensation for loss of future earnings
Also, any cause of action to recover any of these items:
Compensation to debtors who are victims of crimes
Up to 10 percent of compensatory damages owed to a victim of a crime committed by the debtor
Trust funds created by someone other than the debtor, and up to 90 percent of payment to debtor from exempt trust
|Compensation to debtors who are victims of crimes, wrongful death payments, up to $23,675 in personal injury claims, and compensation for loss of future earnings|
|Other||Debtor’s seat or pew at a public place of worship
Security deposits in rental housing
Savings in college trusts for New York State colleges
It can be difficult to draw an equivalence between the state and federal exemptions in many cases, but generally the federal exemptions are preferable to the New York exemptions. Although the state’s homestead exemption is particularly valuable, the larger wild card exemption that accompanies the federal exemptions goes further for debtors. As a result, most homeowner debtors or with equity in their residence more than the federal exemption are better off with the state’s exemptions. The same can’t be said for the rest.
I’ve addressed the New York exemptions in more detail when discussing judgment enforcement, since the laws overlap, and the federal exemptions appear in the bankruptcy dollar-amount adjustments post for 2016.
Neither set of exemptions is perfect, so if you are concerned about what property you might lose in a New York bankruptcy, then it’s crucial to discuss your situation with an experienced New York bankruptcy lawyer.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.