When you file for Chapter 7 bankruptcy in New York, your attorney will tell you that in exchange for having all dischargeable debt wiped out, you will have to surrender any nonexempt property to the trustee for sale and distribution to your creditors.
How does this requirement affect your household goods and furniture? Will you have to give up your antique dining room set? Your bedroom furniture? Your television? The kitchen sink? The thought of losing items that have been in your family for generations is understandably upsetting.
Bankruptcy exemptions explained
The good news is that in New York, you can use state or federal bankruptcy exemptions to protect and keep most (if not all) of your household goods and furnishings. Bankruptcy exemptions are in place to ensure that you have the property you need to live and work while you regain your financial footing. While you do have an obligation to repay your creditors, the goal is not to impoverish you in the process.
New York state exemptions
New York state exemptions presently (in 2019) allow you to protect up to $11,375 of personal property, such as clothing, furniture, TV, and cooking utensils. Some property types have their own exemptions: for example, you can exempt up to $575 worth of books and jewelry up to $1,150. If you don’t claim a homestead exemption (e.g., you don’t own your home), then you can use a wildcard exemption to protect an additional $1,150 worth of personal property, cash, or bank account contents.
If you choose the federal exemption system, then you can protect up to $13,400 worth of household goods and furniture, in addition to books, appliances, and clothing, provided each claimed item does not exceed $625 in value.
If any of your personal property isn’t fully protected, then you might be able to keep it by applying the federal wildcard exemption, which (in 2019) is $1,325 along with up to $12,575 in any homestead exemption you don’t use. For example, if you want to keep the vintage dining room set that your grandmother left you but it’s worth $1200 (more than the $625 limit), then you can use $575 of the wildcard allotment to protect it.
Contact a New York bankruptcy attorney
If you are planning to file for Chapter 7, then a New York bankruptcy attorney can ensure that you understand what property is at risk and how you may be able to apply an exemption to protect it. Fortunately, most New York filers are able to receive their discharge without losing much (if any) personal property. Your attorney can help you devise the best strategy to keep your most cherished possessions.
Contact Jayson Lutzky, P.C. if you are considering filing for bankruptcy. Mr. Lutzky will help you determine if bankruptcy is right for you in a free initial in person consultation. Visit www.MyNewYorkCityLawyer.com/Bankruptcy to learn more or call 718-329-9500 to set up an appointment.