As the number one bankruptcy filer in New York, Jacoby & Jacoby has helped countless clients find the financial freedom they deserve. If you’re suffering under the weight of insurmountable debt, we can help. Give us a call at (888) 452-2629 to schedule your free consultation.
Despite what your creditors would like for you to believe, bankruptcy is a powerful debt relief tool. By discharging or reorganizing debt, bankruptcy gives people a chance to wipe the slate clean and protects them from collectors.
Regardless of bankruptcy type, each filer must submit a property declaration form called Schedule A/B. This declaration is a detailed inventory of all the debtors’ assets, from real estate and vehicles to personal belongings and investments. From this list, the bankruptcy court and trustee determine which assets are exempt from seizure and liquidation and which are not.
If you’re considering filing for bankruptcy, don’t worry: This process isn’t as scary as it sounds. You’ll be able to retain the vast majority of your assets by utilizing bankruptcy exemptions, and our team can help. As premier bankruptcy lawyers in New York, we know everything there is to know about the filing process, how to minimize liability and discharge as much debt as possible.
Equally important, our bankruptcy attorneys can help you keep what matters most to you. Keep reading to learn more about how we protect our clients’ assets by utilizing both federal and New York exemptions.
Ready to make a fresh start? The first step is asking for help. Contact Jacoby & Jacoby online to schedule a free case evaluation and start exploring your options.
What Are Bankruptcy Exemptions?
Thankfully, people filing for bankruptcy aren’t forced to liquidate everything and become destitute—that wouldn’t help anybody. By claiming bankruptcy exemptions, they can protect their essentials from being seized by the bankruptcy trustee and sold to pay creditors.
State and federal laws dictate which assets can be exempt and how much can be claimed. Some states require filers to use state exemptions, and others allow them to choose between state and federal. However, the law doesn’t allow people filing for bankruptcy to combine them.
New York allows its residents the choice between state and federal exemptions.
Understanding New York Bankruptcy Exemptions
As a New Yorker filing for bankruptcy, you’ll need to choose which set of exemptions works best for your situation. The New York bankruptcy exemption system is designed to protect you from losing essential assets. Although it includes numerous exemptions, here are some of the most commonly claimed:
- Homestead Exemption. Depending on which county they live in, New Yorkers who own and use property as their primary residence can claim between $89,975 and $179,950 with the homestead exemption. Its purpose is to help individuals and families keep their homes during bankruptcy.
- Motor Vehicle Exemption. A filer can exempt the equity in one vehicle for up to $4,825 or $11,975 if the vehicle is customized to accommodate a disabled debtor. In cases where you have more vehicle equity than you can exempt and aren’t using the homestead exemption, you may be able to use the wildcard exemption for additional protection.
- Wildcard Exemption. This exemption allows an individual to protect up to $1,175 in cash or personal property of their choosing (except for real estate)—if they don’t use the homestead exemption.
- Personal property. Filers are allowed to retain up to $11,975 in certain types of personal property, including items like home appliances, furniture, kitchenware, electronics, religious items, family photos and clothing. This exemption allows them to retain cash and banking account balances up to $6,000.
- Pensions and public benefits. This exemption allows New Yorkers to protect certain retirement plans, as well as Social Security, unemployment, disability, workers’ compensation, veterans’ benefits and more.
This is far from an exhaustive list of New York bankruptcy exemptions. State law typically allows residents who are filing for bankruptcy to retain trade-related tools, a portion of wages and income, lawsuit settlements and a host of other assets. The best way to understand how much of your property is protected is by speaking with a New York bankruptcy attorney.
New York Exemptions vs. Federal Exemptions
It’s important for each filer to think carefully about which assets they want to protect the most before choosing between state and federal exemptions. The amount an individual can claim from either varies by asset, meaning the right decision for you depends on the type and value of your property.
Here’s how New York and federal exemptions compare in terms of the maximum claim an individual can make on some of the most commonly used exemptions:
- Homestead Exemption: $179,950 in state vs. $27,900 in federal
- Motor Vehicle Exemption: $4,825 (or $11,975 if equipped to accommodate the filer’s disability) in state vs. $4,450 in federal
- Tools of the Trade Exemption: $10,000 in state vs. $2,800 in federal
- Personal Property Exemptions: $11,975 in state vs. $14,875 in federal
There are a vast array of additional exemptions that differ in amount between New York and federal. But as you can see from just a few examples, the type of exemption rule you choose should only come after a careful review of your assets.
You also need to take into account a number of other state-specific considerations. For example, New York provides a generous Homestead Exemption, but it is unlikely to apply to investment properties and vacation homes. Understanding the full extent of exemptions—as well as non-exempt property—is essential to making the right decision. Luckily, you don’t have to do it alone.
Jacoby & Jacoby: Top Bankruptcy Attorneys in New York
Navigating bankruptcy is difficult even without accounting for exemptions. In order to maximize your exemptions while discharging as much debt as possible, you’ll need to work with an attorney who understands the many intricacies of both New York and federal bankruptcy laws. There’s no better firm to partner with than New York’s number one filer, Jacoby & Jacoby.
No one deserves to suffer under tremendous debt. If you’ve found yourself in a dangerous financial situation, there’s no shame in asking for the help you need. When you’re ready to start your journey toward financial independence, our compassionate bankruptcy attorneys will be right by your side. Getting started is easy: Simply contact us online or give us a call at (888) 452-2629 to schedule your free consultation today.