Bankruptcy

Can I Keep My Property If I File for Bankruptcy in New York?

By Cara O'Neill, Attorney
Learn how to protect property bankruptcy using New York's property exemptions.

August 24, 2017

Filing for bankruptcy in New York doesn’t mean losing all that you own—that won’t happen. But you might not be able to keep everything, either. New York, like other states, allows you to protect—or “exempt”—the things that you’ll need to work and maintain a home. The chapter you file will determine what will happen to luxury items (called nonexempt property) that you can’t protect.

  • Chapter 7 bankruptcy. The Chapter 7 bankruptcy trustee appointed to manage your case will sell any nonexempt property and disperse the proceeds to creditors; however, the trustee might allow you to buy back nonexempt property at a slight discount using post-bankruptcy funds.
  • Chapter 13 bankruptcy. A filer keeps all assets in a Chapter 13 bankruptcy, including nonexempt property. However, over the course of the three- to five-year Chapter 13 repayment plan, the filer must repay creditors an amount equal to what the creditors would have received in a Chapter 7 bankruptcy (the value of the nonexempt property minus sales costs). If the filer can’t afford to do so, selling the property and using the proceeds to pay creditors is an option.

New York residents can choose between state exemptions or the federal exemption scheme; however, you can’t mix and match exemptions, so you’ll want to decide which set works best for you. Filers who choose to use the state exemptions can supplement with the federal “nonbankruptcy” exemptions, too.

New York Property Exemptions

Unless otherwise noted, you’ll find the statutes in New York Civil Practice and Rules (NYCPLR) on the New York Legislative Information page. Also, married couples filing jointly (together) can double the exemption amount on items that they mutually own.

Homestead

The amount of equity you can protect in your primary residence will depend on where you live:

  • Homestead for the counties of Bronx, Kings, Nassau, Putnam, Queens, Richmond, Rockland, and Suffolk—$165,500. (NYCPLR § 5206.)
  • Homestead for the counties of Albany, Columbia, Dutchess, Orange, Saratoga, and Ulster—$137,950. (NYCPLR § 5206.)
  • Homestead for all remaining counties—$82,775. (NYCPLR § 5206.)

Wages and Support

  • 90% of earnings (NYCPLR § 5205(d)(2).)
  • Weekly wages (variable percentage) (NYCPLR §§ 5231(b), 5241(g).)
  • Alimony, support, and maintenance to the extent reasonably necessary (NYCPLR § 5205(d)(3), Debtor & Creditor Law § 282(2)(d).)
  • Military pay, equipment, and pension (NYCPLR § 5205(e).)
  • 90% of farmer’s milk proceeds (NYCPLR § 5205(f).)

Personal Property

  • Residential and utility security deposit (NYCPLR § 5205(g).)
  • Health aids (NYCPLR § 5205(h)(1).)
  • Service dog and food (NYCPLR § 5205(h)(2).)
  • Electronic or direct deposit payments that are statutorily exempt—$2,750. (NYCPLR § 5205(l).)
  • Burial grounds (up to one-quarter acre; burial structures, including vault, allowed) (NYCPLR § 5206(f).)
  • Cash and deposits—filer who doesn’t claim homestead exemption can use the lesser of either $11,025 minus exempted § 5205 property or $5,525 to protect cash and deposits. (Debtor & Creditor Law § 283(2).)

A filer can exempt up to $11,025 in the following property:

  • Heating equipment, stove, sewing machine, and fuel for 120 days (NYCPLR § 5202(a)(1).)
  • Religious texts, family pictures, and school books; other books up to $550 (NYCPLR § 5202(a)(2).)
  • Pew or seat in a house of worship (NYCPLR § 5202(a)(3).)
  • Food for the family; domestic animals and their food—120-day supply limited to a value of $1,100 per filer. (NYCPLR § 5202(a)(4).)
  • Clothing, furniture, television, computer, cell phone, radio receiver, and health aids prescribed by a doctor (NYCPLR § 5202(a)(5).)
  • Watch, jewelry, and art up to $1,100; wedding ring (NYCPLR § 5202(a)(6).)
  • Tools needed in a trade or profession up to $3,300 (NYCPLR § 5202(a)(7).)
  • Motor vehicle up to $4,425 (up to $11,025 for an individual with a disability) (NYCPLR § 5202(a)(8); Debtor & Creditor Law § 282(1).)
  • Wildcard exemption up to $1,100 if the filer doesn’t claim the homestead exemption (can be used for personal property, cash, or funds in a bank account) (NYCPLR § 5202(a)(9).)

Retirement Accounts, Pensions, and Other Benefits

  • Trust formed by someone other than the filer (including IRA, 401k, or KEOGH) (NYCPLR § 5205(c)(1),(2).)
  • Annuity benefits—$5,000. (NYCPLR § 5205.)
  • Social Security, unemployment, disability, illness, and veterans’ benefits. (Debtor and Creditor Law § 282(2), NY Lab. Law § 595.)
  • Profit sharing, pension, and stock bonus payment (Debtor & Creditor Law § 282(2)(e).)
  • Teacher’s retirement (NY Edu. Law § 424.)
  • Volunteer firefighter’s insurance benefits (NY Gen. Mun. Law § 206-b, NY Vol. Fire. Ben. Law § 23.)
  • New York employee benefits (NY Ret. & Soc. Sec. Law § 110.)
  • Village police pension (NY Unconsol. Law § 5711-o.)

Insurance

  • Claims for the loss of exempt property (NYCPLR § 5202(b).)
  • Life insurance acceleration (NYCPLR § 5205(i).)
  • Disability insurance and annuity contract benefits (NY Ins. Law § 3212.)

Miscellaneous

  • NYS College Choice Tuition Savings Plan (up to $11,025 for adult filer; unlimited for a minor) (NYCPLR § 5205(j),(l)).)
  • Crime victim’s reparation award (NY Exec Law § 632, Debtor & Creditor Law § 282(3)(i).)
  • Wrongful death payment to dependent filer to the extent reasonably necessary (Debtor & Creditor Law § 282(3)(ii).)
  • Bodily injury payment to dependent filer—up to $8,275. (Debtor & Creditor Law § 282(3)(iii).)
  • Loss of future income payment to dependent filer to the extent reasonably necessary (Debtor & Creditor Law § 282(3)(iv).)
  • Savings and loan member’s shares, dues, and dividends—$600. (NY Banking Law § 407.)
  • Particular partnership property (NY Partnership Law § 51.)
  • International exhibition exhibits (NYPPL § 250.

Avoiding Unexpected Property Loss

A failure to claim exemptions properly could result in a loss of ownership. Verify exemptions independently and be aware of the following:

  • other exemptions exist
  • exemption availability and amounts can change, and
  • conditions exist (consult the statutes).

To ensure that you’re protecting your property to your best ability, it's a good idea to meet with a local bankruptcy lawyer. Many provide a free consultation on the first visit.

Questions for Your Attorney

  • If I file for bankruptcy, will I be able to protect everything that I own?
  • How can I maximize my exemptions?
  • Would I be better off filing for Chapter 7 or Chapter 13 bankruptcy?
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