Client Alert

From the Barr, Post & Associates Bankruptcy Department comes the following practice alert and news for our valued clients:

New Changes in the New York State Exemption Laws effective January 23, 2011

The New York State Legislature has recently enacted changes to the New York State homestead exemption and other New York State exemptions available to bankruptcy filers and/or judgment debtors. In accordance with this newly enacted law which was signed by the Governor, the homestead exemption will be increased to $150,000.00 for New York County, Bronx County, Westchester County, Rockland County and Putnam County; $125,000.00 for Duchess and Orange County, and $75,000.00 for Sullivan County. It will remain at $50,000.00 for all the other counties in the State.

While the law is not specific, following prior precedent it would appear that real estate owned by both a husband and a wife would be entitled to claim a double exemption, so that a filer of a bankruptcy petition in Westchester, Rockland and Putnam County, as well as in the Bronx or New York County could claim a total of $300,000.00 as exempt. While this is not assured, at the writing of this article, it appears to be available based upon the interpretation of the prior law. However, time will tell.

In addition, there are increases to other State exemptions including an increase in the automobile exemption from $2,400.00 to $4,000.00 or $10,000.00 if the vehicle is fit to be used by a disabled person. There are also alternative exemptions available based upon the Federal Statutes and annual adjustments for cost of living, commencing effective April 1, 2012. As an example, religious books are exempt, portraits are exempt, other books having a value of $500, one computer, one cell phone, jewelry is increased from $35.00 to $1,000.00 and other miscellaneous exemptions are increased.

This change reflects a more realistic view by the State Legislature and the former Governor as to the true value of exemptions and what they are intended to protect. That is, that an honest debtor is entitled to a fresh start.

Please feel free to discuss what this can actually mean to you as a property owner when considering either a bankruptcy or asset protection planning, both of which are part of the many services we are qualified to offer to you, and in which we have more than 40 years of experience.

If you have any questions please give us a call or use the contact form found on the contact page