We often receive phone calls to our office asking us, “what property and assets am I able to keep if I file for bankruptcy?” That is a great question because many people are concerned about what property they may lose if they file for bankruptcy. Contrary to what many people may think, there are many assets that a debtor can keep after filing for bankruptcy. Specifically, a debtor filing for bankruptcy in New York, has to choose between claiming property exemptions under state or federal law. (An exemption is a law that allows the debtor to keep certain property when filing for bankruptcy.) A debtor is not allowed to mix and match between federal and state exemptions.
Recent changes to New York State law allow debtors to keep a generous amount of equity in their homes or opt for a reasonable wildcard exemption under Federal law that can be applied to basically any asset.
When determining which exemptions to choose, a debtor should always consult an experienced bankruptcy attorney.
Here are just a few examples of assets protected in a Chapter 7 and Chapter 13 bankruptcy.
Under New York State Law, a debtor can keep: (1) a portion of the equity in your home: $150,000 for property in the New York downstate area for a single filing, $300,000 for a joint filing, (2) equity in a car worth up to $4000 or $10,000 if the car is equipped for use by a disabled person, (3) most household items and other personal property (e.g. — furniture, TV, radio, other appliances, clothing, a computer, a cellphone, a wedding ring), (4) $5000 in a Bank Account or Cash (if the homestead exemption is not taken), and (5) most retirement accounts, pensions, and life insurance.
Under Federal Law, a debtor can keep: (1) up to $21,625 of the equity in the home you live in, (2) equity in a car worth up to $3450, (3) most household items and other personal property (e.g. — furniture, TV, radio, other appliances, clothing, a computer, a cellphone, a wedding ring), (4) certain qualifying retirement accounts, pensions, and life insurance, and (5) a wildcard exemption up to $11,975 ($1,150 of any property plus $10,825 of unused home equity exemption).
These examples are abbreviated and intended for informational purposes only. You should speak to a bankruptcy attorney to get a better understanding of what property you will be able to keep if you file for bankruptcy.
Please contact us if you have any questions at 888-529-9600 to arrange for a free, initial consultation. As a Brooklyn bankruptcy lawyer, we have offices in New York, Brooklyn and Long Island.
Remember,“bankruptcy is not the end, it’s a new beginning.”
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