Heading into bankruptcy, it is common to feel as though there are many unknowns. Some debts cannot be eradicated with bankruptcy, like an award from a personal injury lawsuit or child support, but there are exemptions that help to protect your property even when you file. Misunderstanding exemptions could lead to additional frustrations and disappointment as you go through the bankruptcy process, so you should make every effort to bring yourself up to speed before filing. Read on to learn some of the basic exemptions that exist for individuals filing bankruptcy in the state of New York.
Individuals have the option to choose between federal and New York exemptions, but not both. Protection for exemptions in bankruptcy includes up to $10,000 in value. If an individual elects not to use all of this with property, then the remainder or $5,000 (whatever is less) applies to cash assets.
A homestead exemption covers a mobile home, co-op, condo, or a home, but the amount allowed varies based on the county in New York. Some pensions are also protected, such as qualified retirement plans, Social Security benefits, IRA assets, and funds received from workersâ€™ compensation cases. In addition, wages are protected up to 90 percent within 60 days of the actual date of filing.
To learn more about exemptions, you should consult directly with your New York bankruptcy attorney. Having your questions answered early can boost your confidence and help you feel prepared for the bankruptcy proceedings. Although bankruptcy can certainly change your life a great deal when it comes to any assets you presently have, this positive step forward for your financial future is an important one. Make a list of all of your assets before consulting with your New York bankruptcy attorney to ensure you know what is exempted and what is not should you choose to move forward.