The question arises after a November editorial in The New York Times castigated state governments for doing too little to protect everyday Americans from a host of unethical and illegal debt enforcement efforts, including “sewer service,” which occurred in New York State. You can read more in my earlier post about the topic, but the editorial also pointed to antiquated state laws designed to protect debtors from court judgments issued against them. For instance, it noted that in Vermont, debtors can keep one cow, two goats, and as many as three bee swarms from creditors—but only a $2,500 automobile.
So what can New Yorker debtors (and their households) protect from creditors who have judgments against them? The answer is in the Civil Practice Law & Rules, sections 5205 and 5206. The New York Department of Financial Services provides a table showing the value of those exemptions in the statutes and their current values. Here they are as of April 1, 2015:
(1) A stove or home heating equipment in the debtor’s dwelling, sufficient fuel for 120 days, and one sewing machine. (CLPR § 5205(a)(1))
(2) The debtor’s religious texts, family portraits, school books, and other books valued at $550. (CLPR § 5205(a)(2))
(3) The debtor’s seat or pew at a public place of worship. (CLPR § 5205(a)(3))
(4) 120 days’ worth of food for the debtor; the debtor’s domesticated animals along with 120 days’ worth of food for them not exceeding $1,100. (CLPR § 5205(a)(4))
(5) Clothes, household furniture, a refrigerator, radio, television, computer (and related equipment), one cell phone, crockery, tableware, and cooking utensils, and all prescribed health aids. (CLPR § 5205(a)(5))
(6) A wedding ring, watch, jewelry and art not exceeding $1,100. (CLPR § 5205(a)(6))
(7) Up to $3,300 in tools of trade, including 120 days’ worth of food for the debtor’s team. (CLPR § 5205(a)(7))
(8) One motor vehicle with a net value of $4,425; $11,025 if the vehicle is equipped to help a disabled debtor. (CLPR § 5205(a)(8))
(9) $1,100 in cash if the debtor does not claim a homestead exemption. (CLPR § 5205(a)(9))
(10) A cause of action by the debtor to recover any of the above items. (CLPR § 5205(b))
(11) Trust funds created by someone other than the debtor. (CLPR § 5205(c))
(12) Up to 90 percent of the payments to the debtor from an exempt trust, and up to 90 percent of the debtor’s earnings from 60 days before the judgment. (CLPR § 5205(d)(1)-(2))
(13) Alimony payments to a wife (not a husband, apparently) or to a child who happen to be debtors. (CLPR § 5205(d)(3))
(14) Exemptions for pay and equipment for debtors serving in the armed forces. (CLPR § 5205(e))
(15) Up to 90 percent of money owed to a debtor for milk sales. (CLPR § 5205(f))
(16) The debtor’s security deposit for rental housing. (CLPR § 5205(g))
(17) Certain health care-related property, e.g. hearing aids, or guide dogs. (CLPR § 5205(h))
(18) An acceleration right for life insurance proceeds. (CLPR § 5205(i))
(19) Savings in college trusts for New York State colleges. (CLPR § 5205(j))
(20) Up to 10 percent of the compensatory damages owed to a victim of a crime committed by the debtor, as determined in a separate, non-criminal proceeding. (CLPR § 5205(k))
(21) Up to $2,750 in cash in a bank account above amounts directly deposited for statutorily exempt deposits, which include Social Security, supplemental security income, child support, veteran’s benefits, public assistance, worker’s compensation, unemployment insurance, pensions, railroad retirement, and black lung benefits. (CLPR § 5205(l))
(22) The debtor’s homestead: up to $165,550 for a principal residence in New York City, Nassau, Suffolk, Rockland, Westchester, and Putnam counties. Debtors living in Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties receive up to $137,950. In all other counties, it’s $82,775. Creditors are allowed to attach judgments onto properties whose values exceed these figures. (CLPR § 5206(a)-(e))
(23) A burial plot. (CLPR § 5206(f))
Many of these figures should be familiar to anyone who has experience with New York bankruptcy: The personal exemptions listed in section 5205(a) and the real property exemptions in section 5206(a)-(e) are identical to the state’s personal and real property bankruptcy exemptions! This isn’t a coincidence: New York’s Debtor & Creditor law, sections 282 and 283, which govern the bankruptcy exemptions, incorporate these two CLPR sections above and add their own exemptions.
As a result, there’s significant overlap between what debtors can protect from creditors in a debt-enforcement action and from creditors in bankruptcy. Additionally, unlike many other states, New York’s exemptions track inflation.
If your financial situation is strained to the point that debt collectors are harassing you, then it’s time to talk to 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.