Filing for New York bankruptcy relief does not mean that you will be left with nothing. Bankruptcy laws were enacted to help people obtain a fresh start. It would be very difficult to recover and rebuild your life if you do not have the basic necessities to move forward with your life. How could you or your dependents live with nothing?
What Are Bankruptcy Exemptions?
New York Bankruptcy exemptions protect the equity in your assets. Equity is the value of your property you own after any liens. Property that is exempt cannot be used to pay back your debts. Any property that is not exempt, the Trustee will take to pay back your creditors. Therefore, you are allowed to keep all exempt property. In a Chapter 7 New York bankruptcy case, the Chapter 7 trustee does not want property that is covered by an exemption. 
If you believe that your property is exempt, this does not mean that you can leave it out of your bankruptcy petition. All debts and assets must be included in your chapter 7 bankruptcy petition. The only way that your property can be exempt is by claiming the exemption on the property on your bankruptcy petition. If you fail to list your property or claim the wrong exemption, then your property is not exempt and will not protected from the Chapter 7 trustee.
If you want to determine if your property is exempt in a Staten Island Chapter 7 bankruptcy case, Karra L. Kingston Esq. can help you. We will go through your assets to carefully determine whether or not your property can be protected. More over, we can help you determine your debt relief options so that you can be on your way to a debt-free life.
Can I Claim Bankruptcy Exemptions?
Individuals looking to file a Staten Island Chapter 7 bankruptcy can claim property as exempt. If you own a Business then you may not be entitled to claim your business property as exempt. You should speak with an experienced bankruptcy lawyer in this situation. When a business files a Staten Island Chapter 7 Bankruptcy, in most cases the business closes.
How Does a Debtor Claim Bankruptcy Exemptions?
A New York bankruptcy lawyer can go through what exemptions you will be able to claim. A Staten Island bankruptcy lawyer will help you file out Schedule C of the bankruptcy schedules. Schedule C of the bankruptcy petition requires the debtor to list all bankruptcy exemptions being claimed. The exemptions must match the property that you are trying to protect from the Trustee.
For example, if you own a home, then you may be able to claim a homestead exemption to protect a certain amount of the equity in the home from the Chapter 7 trustee. If the equity in the home falls under the homestead exemption then the Trustee won’t want it. This means you will be able to keep your home in a New York chapter 7 Bankruptcy because it is considered an exempt asset.
What is an Exempt Asset?
An exempt asset in a Chapter 7 New York bankruptcy is property that does not have any equity or has very little equity because it is covered by bankruptcy exemptions.
What is Equity?
Equity is the value of the property that less any liens or loans that the property is encumbered by.
For example, if your home is worth $500,000 and you have a mortgage in the amount of $100,000, your net equity in your home is $400,000. In order to exempt your property you will need to determine if you can use the homestead exemption. In New York there are different homestead exemptions based on how many people are on the deed to your home. In New Jersey, there is no homestead exemption thus, you will have to look at using the Federal exemption to determine if you can exempt your property.
What Happens If I am behind on my Mortgage?
If you owe a secured creditor money on a loan, you must continue to pay the loan payments to keep the property. So, if you owe your mortgage company, you will need to continue to pay the loan even after filing your bankruptcy. If you fall behind in making the payments to your mortgage lender, the mortgage lender can begin foreclosure proceedings. Different states have different options for people who are trying to save their home during foreclosure. In New York for example, you may be able to enter into a loss mitigation program in order to save your home and become current on your property. If you think that you are able to pay back your loan you should speak with a New York Chapter 7 bankruptcy lawyer so they can review your options. Karra L. Kingston Esq. has saved many homes in foreclosure by filing for relief under Chapter 7 in New York. Karra has saved homes in Staten Island, Brooklyn, Queens, and New Jersey.
If you have a sale date set, you should speak to a New York bankruptcy lawyer immediately. Filing a bankruptcy initiates an automatic stay which prevent a creditor from taking any actions to collect a debt without court approval. This means that your sale date can be postponed or cancelled if you file a New York Chapter 7 bankruptcy.
Federal Bankruptcy Exemptions vs. State Bankruptcy Exemptions
If you are unsure which set of exemptions you should use then you should probably hire a bankruptcy lawyer to help you. Bankruptcy law is Federal law however, different states have their own exemptions that may be better for you to use. A careful analysis by an experienced New York bankruptcy lawyer will help determine which option will protect more of the equity in your property.
What Type of Property Is Protected By Bankruptcy Exemptions?
Examples of property that is typically exempt so that you can keep are: • Homesteads • Personal Property • Jewelry • Motor Vehicle • Health Aids • Tools of the Trade (property used in a business or employment) • Life Insurance • Public Benefits (including food stamps, Social Security, veteran’s benefits, workers’ compensation, etc.) • Alimony and Child Support Payments • Personal Injury Awards • Education Savings Accounts • Most Retirement and Pension Accounts
The above list is not an exhaustive list of New York bankruptcy exemptions a New York bankruptcy lawyer can help you go through a full list of exempt property.
Do Bankruptcy Exemptions Change?
Yes, New York bankruptcy exemptions are adjusted every few months to reflect changes in inflation. It is important to use the most current exemptions if you want to exempt your property. A good Staten Island bankruptcy lawyer will up to date with the newest changes in Bankruptcy Code exemptions to ensure you are using the most current exemptions to file their Chapter 7 bankruptcy case.
How Do Spouses Choose Bankruptcy Exemptions?
If you are filing with your spouse then each spouse is entitled to claim bankruptcy exemptions in property they own. Therefore, spouses may each claim bankruptcy exemptions in jointly owned property. This means that if you both own a car worth $5,000 then you both can use the vehicle exemption in your state to exempt your vehicle.
What Happens to Non-Exempt Property?
In a Chapter 7 bankruptcy case in New York, a Chapter 7 trustee may take property that is non- exempt to pay your debts. This is why hiring an attorney is extremely important. The Trustee will take assets that are non exempt and sell it so that the proceeds are divided among your creditors. A bankruptcy lawyer will be able to go over what types of appraisals for your property will be accepted by the Trustee. In order for the Trustee to determine if your property is exempt they will ask you to provide valuations of any property you own. Some valuations will be from Kelly bluebook, or Zillow dependin
g on your jurisdiction. Each bankruptcy Trustee is different. The most important is to make sure you have an accurate appraisal of your assets.
If you file your New York bankruptcy case and your property is not exempt you may have the option of negotiating with the Trustee to pay back the non exempt portion of the property. An experienced lawyer can help with negotiations to ensure your property does not get taken away.
Speak with a Lawyer Today
Chapter 7 New York Bankruptcy will allow you to get a fresh start. Our office can review all of your property and make sure that filing for a New York bankruptcy is the right option for you. Filing for bankruptcy can stop harassing creditors from going after you. It is important to take away that filing for bankruptcy does not mean your property will be taken. Don’t assume you will be left with nothing without speaking with an experienced New York bankruptcy lawyer first. Our office helps people from all walks of life. We can help file a: Staten Island Bankruptcy, Queens bankruptcy, Long Island Bankruptcy, Brooklyn bankruptcy, New Jersey bankruptcy, New York City bankruptcy,