Filing for bankruptcy can provide substantial relief for those struggling with unmanageable debts, but it can come at a cost. With the option of Chapter 7 bankruptcy in particular, many people are concerned about the necessity of liquidating their assets in exchange for debt relief. However, under New York law, certain kinds of property are exempt from bankruptcy judgments, meaning that you may be able to file for divorce while retaining the possessions that are most important to you.
What Exemptions Can New Yorkers Claim?
When you file for Chapter 7 bankruptcy in New York, you have the option to exempt certain assets from liquidation and sale using either the federal bankruptcy exemption scheme, or the state exemption scheme laid out in the New York Civil Practice Law & Rules statutes. Each scheme has its benefits depending on the types of assets you own. However, the New York state exemptions are typically more beneficial if you have significant equity in a home.
If you do choose to use the state exemption list, you can retain possession of the following assets as of April 1, 2021:
Equity in your primary residence up to a certain amount depending on the county where it is located. For homes in Rockland County, the amount is $179,975. This is known as the homestead exemption, and the amount is far greater than the current federal homestead exemption of $25,150.
Equity in a vehicle of up to $4,825, or $11,975 if the vehicle is equipped for disability access.
Up to $3,575 worth of tools of your trade, meaning equipment that is necessary in order for you to perform your profession.
Up to $1,175 worth of jewelry or art, such as a wedding ring or other personal effects of sentimental value.
Pets or domestic animals and food for pets and human members of the household valued up to $1,175.
Up to $600 in value of family pictures and school and religious texts.
Household items including clothing, furniture, cooking and eating utensils, heating equipment, and a refrigerator, TV, computer, cell phone, and radio.
Prescribed health aids.
If you choose not to take the homestead exemption, you can also keep up to $1,175 worth of assets of your choosing using what is known as the wildcard exemption. However, in this case the federal exemption scheme may be a better option, as its wildcard exemption also allows you to roll over up to $12,575 that you do not use for the homestead exemption.
Whether you use the state or federal exemption scheme, you should also know that if you file for bankruptcy jointly with your spouse, any limits on exempt assets are typically doubled. For example, this means that if you use the state exemptions in Rockland County, you could keep a home with up to $359,950 in equity.
Contact a Rockland County Bankruptcy Attorney
As you can see, you may be able to keep much more than you would expect when you file for bankruptcy in New York. At the Law Offices of Robert S. Lewis, P.C., we can help you understand all of your exempt assets and take the necessary steps to protect them. For a free initial consultation, contact our Hudson Valley area Chapter 7 bankruptcy lawyer by calling 845-358-7100.