Updated New York Bankruptcy Limits Means Thousands more will be able to keep their homes and cars and still file
You may now be able to file a Chapter 7 Bankruptcy in New York City and keep your home if you have under $300,000 in equity in it under proposed new limits in New York. Under the new law, waiting to be signed by the Governor, the exemption limits for a house would be increased from $50,000 for a single filer to $150,000 and from $100,000 for a joint filer to $300,000 for joint filers. That, my friends, is huge. What that effectively means is that if you own a condo, or home in New York City, and your mortgage is, for example, $300,000, your home could be worth up to $600,000 and if you file the Trustee is not allowed to take your home! I can’t tell you how many more clients will be able to get a fresh start in Bankruptcy when this bill goes into effect. Additionally, the exemption for equity in a vehicle will rise from its current exemption of $2400, to $4000! Again, while that may not seem like a ton, most vehicles do not have over $4000 in equity in them, unless you put down a huge downpayment. Lastly, and perhaps most importantly, when you file Bankruptcy in New York, you’ll now be able to chose between the New York laws surrounding Bankruptcy OR the Federal exemption limits. New York previously did not allow you to make this choice. Practically speaking, this helps those without a home more than anything else, because there is a wildcard exemption under Federal Rules. In English, that means that if you have some cash, but no home, chances are you’ll get to keep the cash under the Federal exemption laws (of course each case is different). Very very excited and happy about this as you all should be. Once we hear more news, we’ll absolutely pass it along to you.