Save Your Assets
As a NYC Bankruptcy Attorney one of my primary responsibilities is making sure that we protect as many assets of yours we can through bankruptcy. Fortunately, New York has favorable laws for those filing for bankruptcy and what they can keep even though they are wiping out thousands of dollars in debts.
Protecting your home is of course the most important asset to protect. Fortunately, New York law allows us to protect $50,000 of equity in your home or $100,000 of equity if you are married and filing bankruptcy with your spouse.
Example: You own a house worth $100,000 and have a mortgage of $70,000 on the house. You have $30,000 of equity in the house. Your house is exempt from bankruptcy and you can keep the house since it is less than $50,000 of equity. If you had more than $50,000 of equity and weren’t married and filing jointly, then the bankruptcy could sell your house, pay you the $50,000, and distribute the remainder to your creditors you are discharging in bankruptcy. In practice, unless there is substantial equity in your house it is too cost prohibitive for the trustee to go through all of that to pay the creditors only a minimum amount of money. Rather, you would work out something with the trustee to pay the creditors possibly what they would have received if the house were sold.
A person filing for bankruptcy may keep up to $2400 of equity in his car. That means that if you have $2400 of equity in your car or less you can keep your car through bankruptcy. Even if you have more equity in your car than that it is possible to use other exemptions on other property to be used to protect your car. There are a variety of ways to protect your assets in bankruptcy.
Your 401K and IRA: these are exempt in bankruptcy as long as you don’t have more than $1 Million or more in that account.
You may keep up to $5,000 in the aggregate of personal property such as household goods, jewelry, etc.
The above were just a few of the exemptions that are available in helping protect your assets in bankruptcy. Of course, you should speak with me because the laws are complex and there is much than meets the eye here. In many cases, I am able to help my clients retain most, if not all of their property in bankruptcy.