Legally reviewed by Allen A. Kolber, Esq. - The Law Offices of Allen A. Kolber, Esq., P.C.
One of the most appealing things about pursuing a consumer bankruptcy case is that you may get protected from creditor intervention. Further, this may mean that your outstanding creditors are barred from taking some of your personal property for profit, otherwise known as your exempt assets. Without further introduction, please continue reading to learn more about exempt and non-exempt assets and how an experienced Rockland County Chapter 7 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C. can work to ensure you fully take advantage of this given opportunity.
What are Exempt and Non-Exempt Assets in Bankruptcy?
As alluded to above, in your Chapter 7 bankruptcy case, your exempt assets may be considered the assets you, as the debtor, can keep in your possession. In other words, the United States Bankruptcy Code protects these assets from the claims of creditors if it is listed as exempt under federal bankruptcy law or the laws of your home state. On the other hand, as you may assume, your non-exempt assets may be the assets that your appointed bankruptcy trustee takes possession of to liquidate them and distribute these funds amongst creditors with whom you still have outstanding debts. Nonetheless, below are common examples of exempt and non-exempt assets that may be relevant to you:
- Exempt assets, according to New York State law:
- Equity in the home you live in up to a certain amount, depending on the county.
- Equity in your motor vehicle of up to $5,500 or $13,625 if it is equipped for your disability.
- Your pensions and retirement accounts, such as your 401ks and SIMPLE IRAs.
- Your personal property up to a certain amount, depending on its specific classification.
- Non-exempt assets, according to New York State law:
- Your second real estate property or vacation home.
- Your second motor vehicle, unless you are filing jointly.
- Your investment accounts, other than your retirement accounts.
- Your personal property that is classified as luxury items, such as high-end jewelry.
The Current New York Exemption Amounts
The current exemption amounts in New York took effect on April 1, 2024 and will remain in effect until March 31, 2027, when the next three year adjustment will be implemented. The state itself publishes these figures.
- Homestead, Rockland County: $204,825 of equity in your primary residence. The same figure applies in Westchester, Putnam, Nassau, Suffolk and the five boroughs. Dutchess, Orange, Albany, Columbia, Saratoga and Ulster are set at $170,700, and the rest of the state at $102,400
- Motor vehicle: $5,500, or $13,625 if the vehicle is equipped for a disability
- Cash: $6,825, but only if you are not claiming the homestead exemption
- Tools of your trade: $4,075
- Household goods, jewelry, or the wildcard: $1,325 in each category
- Books, family pictures and religious texts: $675
- Personal injury recovery: $10,250
- Aggregate cap on personal property: $13,625
These figures apply separately to spouses, meaning a couple who files jointly is entitled to claim double.
The Federal Alternative, and How to Choose
Typically, states that have their own bankruptcy exemptions require you to use those, rather than the exemptions provided by the federal government. New York, on the other hand, lets you choose between state and federal exemptions. However, you must understand that whichever system you choose is the one you are required to adhere to for the duration of your case. You cannot pick and choose the best parts of each. As such, the following are the federal figures which were adjusted on April 1, 2025 and remain in effect through March 2028:
- Homestead: $31,575
- Motor vehicle: $5,025
- Household goods: $16,850 in total, with an $800 ceiling on any single item
- Jewelry: $2,125
- Wildcard: $1,675, plus up to $15,800 of a homestead exemption you are not using
- Tools of your trade: $3,175
- Personal injury recovery: $31,575
Which One Fits Depends on Your House
In general, the homestead exemption is the figure that determines which system to choose. A homeowner with real equity will typically reap the benefits of the New York exemption, as the $204,825 eclipses the federal $31,575.
A renter or owner whose mortgage swallows the equity is generally better suited for the federal exemption option, as the unused homestead exemption can be converted into a wildcard worth up to $15,800. This can then be applied to personal property like a vehicle, bank account, or anything else. Beyond that, the federal exemptions are generally more generous when it comes to personal property like jewelry or vehicles.
You Must Have Lived in New York for Two Years
To claim the exemptions offered by New York, you must have had your domicile in the state for at least 730 days prior to filing. If you do not meet this requirement, you’ll need to utilize the exemptions of the state where you resided prior to New York. If that leaves you with nothing to claim, you can utilize the federal exemptions.
How Can I Make Sure My Eligible Assets are Exempted?
Once you fully understand what constitutes an exempt asset, you must carefully inventory all your possessions. You will then need to list all of your eligible assets, that you wish to protect during Chapter 7 bankruptcy in the Schedule C form filed with the bankruptcy court. Here, you must also disclose the accurate values of all these assets.
For unique, complex, or otherwise significant assets, it may be in your best interest to hire an appraiser to assist you in estimating them. Ultimately, a failure to list an eligible asset or state its true value may mean a missed opportunity at maximum protection.
Contact Our Experienced New York Bankruptcy Law Firm
To conclude, if you require additional consulting, look no further than a skilled Rockland County bankruptcy attorney from The Law Offices of Allen A. Kolber, Esq., P.C. We understand how complicated these matters can be to navigate on your own, which is why our firm is committed to helping you achieve a financial fresh start. Contact us to schedule your initial consultation today.
