New York State Exemptions for Chapter 7 Bankruptcy

Homestead Exemption

The homestead exemption can cover up to $170,825 in equity depending on the county. For example, let’s say Maria owns a home in Brooklyn valued at $500,000. She still has a mortgage balance of $350,000. In this case, her equity is $150,000, which falls within the homestead exemption limit in her county.

Motor Vehicle

One vehicle can exempt up to $4,550. For example, imagine John possesses a car for $6,000. He still owes $2,000 on his car loan. His equity in the vehicle amounts to $4,000, which is fully protected, under the motor vehicle exemption.

Personal Property

Different types of property have varying limits for exemption. Let’s consider Emma as an example; she works as a photographer. She owns possessions such as an $800 wedding ring, photography equipment worth around $1,000, including a camera and accessories, along with a laptop valued at approximately $700. For her, all these items fall under the personal property exemption category and are protected.

Cash Exemption

If one does not utilize the homestead exemption option when filing for bankruptcy under Chapter 7 in New York, they may be eligible for cash exemptions amounting up to $5,700.
Let’s take a look at some examples of exemptions and their amounts:

For instance, let’s say we have Alex, who’s renting an apartment and doesn’t claim the homestead exemption. He has $5,000 in his savings account. This entire amount is exempt under the cash exemption rule.

Tools of the Trade Exemption

Now let’s consider Sarah, who works as a carpenter. She owns tools for $3,000 that are essential for her work. These tools are fully exempt under the “tools of the trade” exemption.

Health Aids Exemption

Another example: David uses a hearing aid prescribed by a doctor which is valued at $2,500. It falls under the category of prescribed health aids that are fully exempt.

Wildcard Exemption

Let’s consider Linda who does not own a home. She utilizes the exemption to protect additional personal property up to $1,150 plus any unused portion of the homestead exemption. For example, she may use part of this exemption to safeguard her tax refund.

Retirement Accounts and Pensions

Retirement accounts and pensions generally enjoy exemption; however, there might be some limitations on IRAs and Roth IRAs. Let’s take Robert as an example; he has a 401(k) account with $200,000 and an IRA, with $50,000. Both of these accounts receive protection under the exemption for retirement accounts.

Public Benefits

Public Benefits are fully exempt. For instance let’s consider Emily, who receives $1,200 a month in Social Security benefits. These benefits are complete. These benefits cannot be touched during bankruptcy proceedings.

Alimony and Child Support

These are Exempt to the extent of support. Suppose Carol receives $800 per month in child support. This amount is fully exempt as it is crucial for supporting her child.

Insurance

Insurance varies; certain benefits are exempt. Let’s say Jack receives a life insurance payout of $50,000 following his spouse’s passing. This payout is considered exempt under the insurance exemption.

Personal Injury and Wrongful Death Recoveries

Personal injury recoveries are exempt up to an amount. For example, Anita received a personal injury settlement of $15,000. This amount is protected from being included in her bankruptcy estate.

These examples demonstrate how New York bankruptcy exemptions safeguard assets and income sources throughout Chapter 7 proceedings. It’s important to seek guidance from a bankruptcy attorney to accurately assess and apply these exemptions based on circumstances and current laws.