If you are considering bankruptcy in order to get out from under your debts, then any decent, understanding person must sympathize and know that you are doing so because you feel you have no other options. One of the major factors that we fear in considering bankruptcy is the possibility of having our assets or properties seized.
While you likely wouldn’t consider bankruptcy if you were swimming in cash, you understandably want to hold onto the money which you do have. So, it’s natural that you worry about losing that cash in bankruptcy proceedings.
If you are a renter in NYC and are using the state’s exemptions, you may be exempt for up to $2,500. Federal bankruptcy exemptions, on the other hand, allow for exemptions up to $12,750. If you have the money, federal may be the better way to file.
Are There Different Exemptions for NYC Homeowners?
Homeowners have a different set of exemptions in the state of New York. If you are an NYC homeowner, the New York Homestead exemption can protect up to approximately $150,000 in home equity. Other counties in the state have a different cap on Homestead exemption protections.
The NY Homestead exemption applies to the accumulated equity in an apartment, house, condo, co-op, or mobile home.
There are different requirements and details involved if the real estate property is co-owned by multiple people, such as a married couple.
Are Non-Exempt Assets Always Lost in Bankruptcy Proceedings?
Non-exempt assets may be sold or seized in order to pay off creditors after filing for bankruptcy. However, you need to know that not every non-exempt asset is at risk of being lost, and what can be held exempt may vary from state to state.
If there is not too much value in a piece of property or a personal asset, it may be possible to keep it even if it is otherwise non-exempt. More luxurious assets and properties may be at higher risk of being seized during bankruptcy, however.
What Are Other Options for Protecting Your Money Before Filing for Bankruptcy?
If you are unable to protect your money by exemptions, there may be other options available for saving your cash from creditors in bankruptcy proceedings. It could be worth spending certain money or otherwise gifting it to others before filing if you are not sure you will be able to protect it from being seized.
Also, it may be wise to move exempt money to a separate bank account. Otherwise, use your bank account funds first before you file if you intend to unload certain non-exempt funds.