If you are filing Chapter 7 bankruptcy in New York, your property becomes a part of bankruptcy estate, which will be administered by the bankruptcy court. In Chapter 7, certain property is exempt and you can keep it. Federal bankruptcy exemptions are not available in the State of New York.
Under New York law, you can exempt or protect certain property from creditors when you file bankruptcy. After filing for bankruptcy, this property is safe. There are some limits on certain exemptions such as equity that you have in a home or in a vehicle. The difference between the cost of the item and the amount owed on the item is the definition of equity. If the item, such as home or vehicle, secured by a loan and payments made on time, the equity is protected by your exemptions. A debtor must generally pay the trustee the value of the non-exempt property to keep the property. If you choose to keep the property, continual timely payments ensure protection of the property through bankruptcy.
The following lists most important New York exemptions applicable in Chapter 7 Bankruptcy cases:
Homestead
Real property, including mobile home, condominium, or co-op, up to $50,000 per filer.
Personal Property
Clothing, furniture, refrigerator, TV, radio, sewing machine, security deposits with landlord or utility company, tableware, cooking utensils and crockery, stoves with fuel to last 60 days, health aids (including service animals with food), church pew or seat, wedding ring, bible, schoolbooks, pictures; books up to $50; domestic animals with food to last 60 days and up to $450; watch to $35; spendthrift trust fund principal; 90% of trust fund income if not created by debtor; college tuition savings program trust fund; recovery for injury to exempt property up to 1 year after receiving. Exemptions cannot exceed a total of $5,000 including tools of trade and limited annuity.
Burial plot up to 1/4 acre without a structure on it.
Savings and loan savings up to $600.
Motor vehicle up to $2,400; lost future earnings recoveries needed for support; personal injury recoveries up to 1 year after receipt; wrongful death recoveries for a person you depended upon for support.
IN LIEU OF Homestead exemption, the lesser of the following: up to $2,500 cash or up to $5,000 after exemptions for personal property taken
Wages
90% of earned but unpaid wages received within 60 days of filing for bankruptcy; 90% of earnings from milk sales to milk dealers; 100% for a noncommissioned private, officer or musician in the U.S. or N.Y. state armed forces.
Pensions
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000 per person.
ERISA-qualified plans, Keoghs and IRAs needed for support.
Public Benefits
Unemployment benefits; veterans’ benefits; Social Security; aid to blind, aged, and disabled; crime victims’ compensation; home relief, local public assistance; public assistance; worker’s compensation.
Tools of Trade
Professional furniture, books, instruments, farm machinery, team and food for 60 days, up to $600 total; arms, swords, uniforms, equipment, horse, emblem and medal of a military member.
Alimony and Child Support
Alimony and child support.
Insurance
Annuity contract benefits due to the debtor if he or she paid for the contract up to $5,000, if purchased within 6 months of filing for bankruptcy and not tax-deferred.
Life insurance proceeds left at death if policy prohibits use to pay creditors.
Disability or illness benefits up to $400 per month; life insurance proceeds, dividends, interest, loan, cash, or surrender value if beneficiary is not the debtor or if the debtor’s spouse has taken out the policy.
Miscellaneous
Business partnership property.
To keep non-exempt property, a debtor must generally pay the trustee the value of the non-exempt property.
The exemptions are also relevant if you are filing a Chapter 13 bankruptcy since your bankruptcy has to pass the “good faith” test. The good faith test involves making sure that unsecured creditors will be paid at least as much under Chapter 13 bankruptcy, as if a Chapter 7 bankruptcy had been filed. Generally, this involves valuing of all the nonexempt property the debtor owns.
If you are dealing with debt problems in Rochester, New York, Canandaigua, Brighton, Pittsford, Penfield, Perinton, Fairport, Webster, Victor, Farmington, Greece, Gates, Hilton, Parma, Brockport, Spencerport, LeRoy, Chili, Churchville, Monroe County, Ontario County, Wayne County, Orleans County, Livingston County, and being harassed by bill collectors, and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation.