New NY Bankruptcy Exemptions

On December 23, 2010, in Bankruptcy, by Robbie L. Vaughn, Esq.

Governor Paterson has signed into law a bill that will increase many of New York’s bankruptcy exemptions;  including the motor vehicle and homestead exemptions.  Additionally, New Yorkers will now also be allowed to choose between using the federal or state exemptions.

A summary of the changes can be found here.

The entire bill can be found here.

The following is a Press Release issued by the Governor’s office.

Governor David A. Paterson today announced he has signed into law S.7034-A/A.8735-A, which will increase the amount of exemptions in bankruptcy proceedings and money judgments and provide a choice between State and Federal exemptions. The Governor also announced that he has vetoed two bills.

“During this time of economic crisis, it is our responsibility as public servants to protect those who are struggling the most,” Governor Paterson said. “A reconsideration of the current exemptions, which in some cases have not been changed in decades, is particularly warranted when an increasing number of individuals find themselves in dire financial condition. Though this is not a perfect bill, the benefits far outweigh its concerns. I understand from legislators and advocacy groups that have supported this bill that they are fully committed to addressing the concerns raised by New York City and others, and I urge the Legislature to do so in the coming year. I’d like to thank Assemblywoman Helene Weinstein for her commitment to passing a chapter amendment to address those concerns.”

This bill would provide a much-needed update to the exemptions law in New York as many provisions of State’s exemptions law are antiquated or have not been amended since the 1980’s. The purpose of such exemptions is to permit debtors in bankruptcy to retain a modest amount of personal property and equity in their homes so that they can continue to maintain their lives, and to protect them from becoming homeless, unemployed, or otherwise dependent on the State.

Included in this legislation is a new exemption from the satisfaction of a money judgment for a vehicle not exceeding $4,000 above the debtor’s liens and encumbrances ($10,000 for a vehicle equipped for use by a disabled person) and a raise of the bankruptcy exemption accordingly. This bill would also increase the homestead exemption from $50,000 to either $75,000, $125,000 or $250,000 depending upon the county of residence.

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