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Keeping Your Home in Bankruptcy Can Depend on Home Market Values and a Bankruptcy Appraisal.
A bankruptcy appraisal will give you an accurate home valuation you can use to determine whether you can protect your home before you decide to file for bankruptcy. Learn how to find the current value of your home using home market values and bankruptcy home appraisals.
Learn how New York’s bankruptcy exemptions protect your home, car, personal property, and more.
Most people file either Chapter 7 or Chapter 13, and you’re not alone if you don’t know how the two differ. One of the most significant benefits of Chapter 7 is that you won’t repay creditors through a repayment plan. Instead, the court appoints a bankruptcy trustee to sell your nonexempt property, property you can’t protect with a bankruptcy exemption, for the benefit of your creditors.
Chapter 7 bankruptcy works well for low-income debtors with little or no assets or those who can protect all household belongings. If you don’t have any assets to sell, creditors receive nothing.
But even if you’d lose property, Chapter 7 might still be worthwhile. Just figure out whether the amount of debt you’d erase would exceed the value of the property you’d lose.
Also, losing property isn’t necessarily bad if you have non dischargeable debt, such as child support arrearages or back taxes. The trustee will first apply the sales proceeds to non dischargeable debt in most cases (but not student loans). After the case ends, the amount you’d owe would be lower.
However, not everyone qualifies for Chapter 7 bankruptcy. If you make too much money to meet income requirements, explore filing under Chapter 13 bankruptcy.
New York Homestead Exemption
Generally, the homestead exemption protects equity in the home you live in. A
New York debtor can protect the equity in a house, condominium, co-op, or
mobile home used as a residence up to the following values:
•$204,825 in Kings, Queens, New York, Bronx, Richmond, Nassau,
Suffolk, Rockland, Westchester, and Putnam counties.
•$170,700 in Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster
counties, and
•$102,400 in all remaining counties.
How Do I Find New York Bankruptcy Exemptions?
New York’s exemption amounts adjust every three years, and the amounts in this article reflect the April 1, 2024 adjustment. All New York statutory references are to the New York Code Civil Practice Law and Rules (NYCPLR).
You can read the statutes on the New York State Senate website, but the statutes aren’t updated with the most recent amounts. Go to New York’s Department of Financial Services website and search for “Exemption from Application to the Satisfaction of Money Judgments” for current figures or consult a local bankruptcy lawyer.
What happens if you can’t exempt property in NY bankruptcy?
One of two things will happen. You’ll either lose nonexempt property or pay to keep it, depending on whether you file for Chapter 7 or Chapter 13. Here’s how it works.
In Chapter 7, the bankruptcy trustee sells nonexempt property and distributes the proceeds to creditors. In Chapter 13, filers pay the value of the nonexempt property to unsecured creditors. Learn about secured and unsecured debt in bankruptcy.
The procedural differences are necessary because filers can keep all property in Chapter 13 but not in Chapter 7. Without different systems, creditors would receive less in Chapter 13 than in a Chapter 7 case. If the judge feels that the litigation appraisal lacks proper analysis and is not defensible then you could find you have to pay back your debt under the Chapter 13 bankruptcy plan.
Urban Appraisals has extensive experience in conducting appraisals specifically for bankruptcy cases. Our detailed reports can help you make informed decisions during this difficult time. For more information on how we can assist, please see bankruptcy appraisals.