Filing for bankruptcy doesn’t necessarily leave people penniless. With Chapter 7 bankruptcy exemptions in New York, under NY exemption law you may keep as much as $6,000 in cash among other exempted assets. Below is a guide on how bankruptcy exemptions work. If you need legal guidance for smart debt relief strategies, consult our experienced bankruptcy attorney John D’Amato.
What is the Bankruptcy Cash Exemption in New York?
Bankruptcy exemptions are certain property or amounts of property that are protected from being liquidated (sold and distributed to your creditors). In short, these are properties you get to keep. For instance, New York’s bankruptcy exemption for “cash” is $6,000. If you avail of this exemption, you may keep up to $6,000 of your cash on hand, bank accounts, and US Savings Bonds, if any.
Note that bankruptcy exemptions apply both in Chapter 7 as well as Chapter 13 bankruptcy. Many people choose Chapter 7 bankruptcy when they have no way of repaying their debts. To see if this chapter bankruptcy is right for you, reach out to Attorney John D’Amato.
What are the Chapter 7 Property Exemptions in New York?
Besides the cash exemption, New York state offers the following property exemptions in Chapter 7 bankruptcy:
- Homestead exemption – lets you keep some or all of the equity in your primary home. The exemption amount varies by county. In Erie County, for instance, the homestead exemption amount in 2023 is $89,975. If you live here and your home equity is, let’s say $100,000, you may keep the exempted amount of that ($89,975) and your creditors can claim the rest of the equity ($10,025).
- Motor vehicle exemption – protects up to $4,825 in vehicle equity, or $11,975 if the vehicle is disability-equipped.
- Tools of the trade exemption – allows you to keep up to $3,575 worth of your work-related tools such as devices, machinery, instruments, and equipment.
- Wages and income exemption – lets you keep 90 percent of the income you earned in the 60 days before filing for bankruptcy, and anytime after that.
- Pensions and benefits exemption – fully protects your retirement plan, IRA, 401(k), Social Security, disability benefits, unemployment, and the like.
- New York wildcard exemption – lets you keep a variety of belongings of your choosing worth up to $1,175. This exemption, however, is not available if you claim the homestead exemption.
There are many other assets you may protect through New York bankruptcy exemptions. These include personal property, alimony, health savings accounts, workers’ compensation, lawsuit settlements, and more. It’s best to consult with a New York debt relief lawyer to get specific legal guidance for your situation.
How Do I Keep My Money and Claim Bankruptcy Exemptions in New York?
To claim bankruptcy exemptions in New York, list the assets you want to keep in your bankruptcy form “Schedule C: The Property You Claim as Exempt.” For every property you claim, you must cite the specific law that allows the exemption of that property. This is better done by your attorney.
The first part of the form asks you to choose the “set of exemptions” you’re claiming. There are two sets of exemptions available: federal and state. The federal set has its own rules and exemption amounts that differ from the New York state exemptions. You may choose only one of the two sets, thus you should first compare which of them provides the most strategic protections for the property you wish to keep.
After you file your completed bankruptcy forms, a court-appointed trustee will check them, including the validity of the exemptions you’re claiming. In some cases, the trustee may disagree with certain exemption claims, and a Judge will have to decide whether they are valid.
If you need help with claiming property exemptions or with the bankruptcy process in general, please don’t hesitate to speak with our trusted bankruptcy attorney.
Contact John D’Amato, Bankruptcy Attorney in NY
When it comes to legal debt relief, residents of Western New York have relied on Attorney John D’Amato for over 30 years. Mr. D’Amato’s extensive experience and strategic approach have helped numerous individuals and businesses become debt-free. He’s eager to guide you on your debt relief options and assist you with your bankruptcy filing. Your consultation is confidential. Call Attorney John D’Amato at 716-706-0000 today.