Chapter 7 Bankruptcy in New York - Understanding the Exemptions

Chapter 7

Chapter 7 bankruptcy is also known as liquidation bankruptcy. It uses a debtor’s non-exempt assets to pay creditors, and the debtor can avoid having to create a repayment plan. While giving up a property to pay debts may seem like a poor alternative, the bankruptcy exemptions allowed in New York offer exemptions that allow debtors to hold onto some of their property. Depending on the situation, the debtor may not have to give up any property at all because the debtor’s property may be fully protected by the available exemptions.

New York’s Chapter 7 Bankruptcy Exemptions

In New York, debtors have the choice of using either Federal bankruptcy exemptions or the New York State bankruptcy exemptions. While the Federal bankruptcy exemptions offer certain benefits to debtors filing for Chapter 7, including a fairly large “wildcard” exemption, the New York State exemptions offer different set exemptions, which if chosen, may be more beneficial to a debtor’s situation such as a much larger homestead exemption. However, you must choose between the state or the federal exemptions. You cannot combine exemptions from both. A bankruptcy attorney such as Natasha Meruelo, Attorney at Law, can assist you with choosing the best set of exemptions to help you protect the assets that may be most important to you.

Assets you may be able to keep include:

  • Your vehicle
  • Your house
  • Your retirement proceeds
  • Your life insurance with cash surrender value
  • Money in the bank
  • Your personal property

New York, as well as the federal government, imposes financial limits on the amount that you may keep in each category. In addition, there is a wildcard exemption that you may be eligible for, which would apply to any property item of your choice, up to a certain dollar value. If you are filing with a spouse, the number of exemptions may be doubled. There are certain issues to be on the lookout for, which can affect what exemptions you may be able to apply to your case. For example, you should inform your attorney if you have recently moved to New York from another state or recently purchased your home.

Bankruptcy Exemptions Chart for New York

AssetsExemption AmountNotes
Cash$5000Not available if using Homestead Exemption


$150,000 for Richmond, Kings, Queens, New York, Bronx, Nassau, Suffolk, Westchester, Rockland, Putnam; $125,000 for Dutchess, Ulster, Orange, Columbia, Albany, Saratoga; $75,000 all other countiesN/A


$4000, or $10,000 if equipped for disabilityOne per debtor

New York State College Choice Tuition Savings Program Trust Fund

VariableDependent on fund type and designation

Personal Property

$10,000Only available if not using a Homestead Exemption

Pension/Retirement Benefits

VariableDetermined on a case by case basis

Wild Card for Personal

Property/Bank Accounts/Cash

$1000Only available if no Homestead Exemption claimed


Completely ExemptN/A

Future Earnings

VariableDetermined on a case by case basis

Health Aids

Completely ExemptN/A

Insurance - Annuity

Typically exempt, annuities purchased within 6 months of filing limited to $10,000N/A

Insurance - Disability

Completely ExemptN/A

Insurance - Life

Completely ExemptN/A

Social Security

Completely ExemptN/A

Security Deposits

Completely ExemptN/A

Public Assistance

Completely ExemptN/A

Property in a Partnership



Completely ExemptN/A

Trust Funds

90% ExemptN/A


Completely ExemptN/A

Veterans' Benefits

Completely ExemptN/A


90% ExemptIncludes earnings received within 60 days before or any time after Sheriff's income execution

Wage - Armed Forces

Completely ExemptN/A

Worker's Compensation

Completely ExemptN/A

Crime Victim Compensation


Injury Compensation

$7500, not including pain and suffering or pecuniary lossN/A

Wrongful Death Compensation

VariableDetermined on a case by case basis

Divorce Compensation

VariableDetermined on a case by case basis

Discuss Your Options for Filing Chapter 7 Bankruptcy – Call Today at (914) 752-5098

Natasha Meruelo, Attorney at Law guides clients through the New York bankruptcy process. If you are filing for Chapter 7 bankruptcy and want to know your options, I can analyze your situation and answer your questions. As a White Plains bankruptcy attorney with nearly a decade of legal experience, I will work hard on your behalf as you seek financial stability.

Contact my firm today to request a free initial consultation.

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