{"id":286866,"date":"2021-04-14T14:14:20","date_gmt":"2021-04-14T19:14:20","guid":{"rendered":"https:\/\/ability-fl-prod.internetbrands.com\/ability-law\/bankruptcy\/bankruptcy-laws-by-state\/new-york-bankruptcy-exemptions-and-law.html"},"modified":"2026-09-21T11:09:39","modified_gmt":"2026-09-21T16:09:39","slug":"new-york-bankruptcy-exemptions-and-law","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/state\/new-york-law\/new-york-bankruptcy-exemptions-and-law.html","title":{"rendered":"New York Bankruptcy Exemptions and Law"},"content":{"rendered":"\n
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New York Bankruptcy Exemptions and Law<\/h1>\n\n
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\n By Christie Nicholson, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

New York<\/span> bankruptcy<\/span> laws<\/span> allow state residents to eliminate or reorganize debt through Chapter 7 liquidation<\/span> or Chapter 13 repayment plans<\/span>. To qualify for relief in federal court, filers<\/span> must satisfy income criteria such as passing the means test<\/span> or proving steady earnings. Debtors can select state or federal exemptions<\/span> to protect critical assets, including homesteads, vehicles, and personal property<\/span>, from creditor liquidation<\/span>.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n

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If you\u2019re like other New Yorkers struggling to pay your bills, you may have considered filing bankruptcy<\/span>. Depending on which type of bankruptcy<\/span> you pursue, you can either get rid of your debts or agree to a long-term repayment plan<\/span>.<\/p>\n

Before you decide whether to file Chapter 7 bankruptcy<\/span> or a Chapter 13 reorganization case, you should familiarize yourself with New York<\/span> bankruptcy<\/span> laws<\/span>, including the New York<\/span> bankruptcy<\/span> exemptions<\/span>. This way, you can fit your bankruptcy filing<\/span> to your specific financial situation.<\/p>\n

This article explains the bankruptcy laws<\/span> in New York<\/span> State<\/span>. We will also discuss the state\u2019s bankruptcy exemptions<\/span> and how they compare to the federal exemptions<\/span>. If you\u2019re thinking of filing bankruptcy<\/span> and aren\u2019t sure what steps to take, contact a New York<\/span> bankruptcy<\/span> attorney<\/span><\/a>.<\/p>\n

Determining the Type of Bankruptcy<\/span> To File<\/h2>\n

To qualify for bankruptcy, you must do one of two things. If you want to pursue a Chapter 7 <\/span>bankruptcy<\/span> case<\/span>, you must be able to pass the \u201cmeans test<\/span>.\u201d This test determines whether your income is below the state median income.<\/p>\n

If your best option is a Chapter 13 <\/span>bankruptcy<\/span> case<\/span>, you must demonstrate that you have sufficient regular income to make the monthly payments in your Chapter 13 plan<\/span>. You must also complete the necessary bankruptcy forms<\/span>.<\/p>\n

Before you decide which chapter to file, review the New York<\/span> bankruptcy<\/span> exemptions<\/span>. This will help you determine which assets you can keep if you opt for a Chapter 7. These exemptions may also dictate whether you pursue a Chapter 13.<\/p>\n

New York<\/span> Bankruptcy<\/span> Law<\/span> and Bankruptcy Exemptions<\/span><\/h2>\n

Bankruptcy cases<\/span> are governed by the United States Bankruptcy Code and take place in federal bankruptcy court<\/span>. Most state bankruptcy laws<\/span>, including those in New York<\/span>, mirror the federal bankruptcy laws<\/span>. There are some key differences.<\/p>\n

Bankruptcy exemptions<\/span> protect your assets from sale, liquidation<\/span>, or seizure. There are federal exemptions<\/span> and state exemptions<\/span>. Most states allow bankruptcy filers<\/span> to choose between the two.<\/p>\n

New York<\/span> is one of the states that allow debtors to select from the state or federal bankruptcy exemptions<\/span>. You must pick one or the other and indicate on your bankruptcy petition<\/span> which set of exemptions you are claiming.<\/p>\n

Chapter 7 Bankruptcy<\/span> vs. Chapter 13 Bankruptcy<\/span> in New York<\/span><\/h2>\n

Regardless of where you live, the two most common types of bankruptcy<\/span> are Chapter 7 (personal liquidation<\/span> bankruptcy) and Chapter 13 (individual reorganization bankruptcy). Since the goal of filing bankruptcy<\/span> is to get a fresh start<\/span>, choosing the correct type of bankruptcy<\/span> to file is extremely important.<\/p>\n

Let\u2019s take a closer look at the two main types of <\/span>bankruptcy<\/span> filings<\/span>.<\/p>\n

Chapter 7 Bankruptcy<\/span><\/h3>\n

Known as a \u201cliquidation<\/span> bankruptcy,” you can file under Chapter 7<\/a> if your household income falls below the median income for your state. In this type of bankruptcy<\/span>, you surrender your non-exempt assets to a bankruptcy trustee<\/span> who will sell them to repay your creditors. In a Chapter 7 case<\/span>, you can use exemptions to protect some of your assets. In return for giving up your non-exempt property, you will exit bankruptcy debt-free.<\/p>\n

Chapter 13 Bankruptcy<\/span><\/h3>\n

This is sometimes known as a \u201creorganization bankruptcy\u201d because it allows individuals to rework their debt. Under a new plan, you\u2019ll pay off your debts over a three-to-five-year period. You make your Chapter 13<\/a> monthly payments under a court-approved repayment plan<\/span> that may also relieve you of some of your debt. The most significant benefit of filing Chapter 13 is that, in most cases, you can keep your home.<\/p>\n

Which Debts Can You Include in Your New York<\/span> Bankruptcy<\/span> Case<\/span>?<\/h2>\n

Most of the debts you can include are unsecured, like credit cards<\/span> and medical expenses. There are certain types of debt, such as student loans<\/span>, that you can\u2019t include in a Chapter 7 bankruptcy<\/span>. Other types of non-dischargeable debts<\/span> include:<\/p>\n