A Guide to Understanding New York Bankruptcy Exemptions (2026)

New York bankruptcy exemptions determine what property you can protect when filing under Chapter 7 or Chapter 13. Unlike states that mandate the use of state exemptions, New York allows debtors to choose between the federal exemption system under 11 U.S.C. §522(d) and the state exemptions provided in N.Y. Debtor and Creditor Law and the Civil Practice Law and Rules (CPLR). Selecting the right exemption is critical to preserving your home, vehicle, income, and personal property.

This guide explains the primary New York exemption options, outlines residency requirements, and shows how each exemption system affects your bankruptcy filing.

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Key Takeaways on New York Bankruptcy Exemptions

State-Specific System: New York bankruptcy filers may choose either the federal exemptions under 11 U.S.C. §522(d) or the state exemptions.
State Residency Requirements: To apply the New York exemptions, you must have lived in the state for at least 730 days before filing. Otherwise, you must use the exemptions of your prior state.
Tiered Homestead Protection: New York’s homestead exemption varies significantly by county, protecting higher equity in high-cost areas like New York City and Long Island, with lower caps in other regions.
Chapter 13 Utility: Debtors with high home equity or non-exempt assets frequently use Chapter 13 to retain property while repaying creditors through a structured plan.

New York Residency Requirements

New York bankruptcy cases are filed in the Southern, Eastern, Northern, or Western Districts of the federal court system, but your exemption rights are determined by your domicile under 11 U.S.C. §522.

Once domicile is established, New York’s exemption laws apply uniformly except for the homestead exemption, which varies by county. Debtors in downstate counties receive a higher homestead amount, while upstate counties receive lower tiers. All other New York exemptions remain consistent statewide.

To use New York’s state exemptions, a debtor must satisfy the federal residency rule under 11 U.S.C. § 522(b)(3)(A) by living in New York for at least 730 days before filing.

If you have not met the 730-day requirement, the court applies the 180-day lookback rule, assigning the exemptions of the state where you lived for the majority of the 180 days preceding the initial two-year window. Because exemptions vary between states, evaluating residency timing and comparing exemptions is critical for anyone relocating to or from New York.

New York Homestead Exemption

New York’s homestead exemption, outlined in CPLR §5206 and N.Y. Debt. & Cred. Law §282, protects equity in a primary residence, cooperative apartment, or condominium. Uniquely, the dollar limit is tiered based on the county where you reside.

Homestead Exemption Cap	Applicable New York Counties
$204,825	Bronx, Kings, Nassau, New York, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester
$170,700	Albany, Columbia, Dutchess, Orange, Saratoga, Ulster
$102,400	All remaining counties statewide

For married joint filers, these figures can be doubled if both spouses own the property. This protection applies strictly to a primary home; investment real estate or vacation property is excluded. Any non-exempt equity exceeding these caps becomes property of the bankruptcy estate.

Note on Statutory Figures

If you search the text of New York Civil Practice Law and Rules (CPLR) §5206 online, you may encounter older base figures such as $150,000, $125,000, and $75,000. These figures remain in the statutory text, but it’s common that it’s not updated or adjusted accordingly.

New York applies mandatory triennial inflation updates, and the current active exemption limits enforced by bankruptcy courts and updated with bankruptcy software I use, the amounts are significantly higher as referenced in the above-mentioned table. Make sure to always double-check exemptions from multiple sources.

Comparing New York State vs. Federal Homestead Protections

Because New York permits debtors to elect either its state or federal exemptions, contrasting the homestead protections is a vital strategic step before filing. However, for homeowners with substantial equity, choosing the federal homestead exemption is rarely advantageous for real estate.

However, debtors with little to no home equity often look closely at the federal alternative because of its flexible wildcard exemption under Section §522(d)(5), which allows unutilized homestead amounts to shield cash, bank accounts, or other liquid assets. Always compare both options to choose the one that best protects your assets.

Motor Vehicle & Personal Property Protections

New York shields basic personal property under CPLR §5205 and §5206: The motor vehicle exemption protects up to $5,500 in equity in one motor vehicle. If the vehicle is specifically equipped for a disabled debtor, the protection increases up to $13,625.

Essential household goods and daily‑use items such as furniture, basic appliances, clothing, and everyday electronics are protected up to a value of $13,625. This category includes items like a refrigerator, television, computer, smartphone, tableware, and cooking utensils. Because trustees value these items at fair‑market “garage‑sale” prices, most debtors’ household goods fall well within the allowable limit.

Additional personal items such as religious texts, portraits, books, and modest jewelry are protected up to $1,325, with a separate allowance of $675 for books and similar materials.

Debtors may also exempt up to $4,075 in tools, implements, and professional equipment necessary for their occupation. This provision is especially important for tradespeople, small business owners, and gig‑economy workers who rely on their equipment for income.

Wildcard and Cash Exemptions When No Homestead Is Claimed

New York provides additional protection for renters and for homeowners who do not claim a real‑property homestead exemption. These alternative exemptions are commonly referred to as “wildcard” exemptions and allow a debtor to protect a limited amount of cash or personal property.

Under §283(2), a debtor who does not claim a homestead exemption may exempt the difference between $13,625 and the amount already used under §283(1), or up to $6,825, whichever is less.

Retirement Accounts, Pensions, and Public Benefits

New York provides protection for retirement savings, treating most tax‑qualified plans as functionally equivalent to spendthrift trusts. Under CPLR §5205(c), retirement accounts such as 401(k)s, 403(b)s, traditional and Roth IRAs, governmental plans, and defined‑benefit pensions are exempt from creditor claims. Public benefits receive similar treatment.

Once paid to the debtor, these benefits remain exempt under CPLR §5205(a) and related provisions. This includes Social Security retirement benefits, SSI and SSDI, veterans’ benefits, workers’ compensation, unemployment insurance, and public assistance.

Conclusion

Filing for bankruptcy in New York requires a careful evaluation of your assets and comparing the New York State and federal bankruptcy exemption system. Understanding both frameworks under Sections 282 and 285 is essential to keeping your property.

If the equity in your assets exceeds the statutory amounts, Chapter 13 provides the option of keeping non-exempt assets by paying back its value through the 3-5 year payment plan.

Professor Hernandez is an attorney specializing in consumer finance and debt relief. He is the author of Consumer Bankruptcy Law (Routledge) and teaches law and finance courses in both English and Spanish at an international university.

Educational Resources

For Institutions: Colleges and universities may request examination copies of my textbook directly from Routledge Publishing.
For Students & Practitioners: Single print and digital copies are available via Amazon Books.
Video Lectures: Stream comprehensive legal breakdowns and video explanations on the Bankruptcy.blog YouTube Channel.

Bankruptcy Court & Consumer Resources

Explore additional consumer guides and state-specific directories to navigate your legal options:

A step-by-step master guide to completing and understanding the bankruptcy petition.
Bankruptcy Court Directory: Full listings for the federal bankruptcy court system and trustee contact information.
State Bankruptcy Exemptions: Review your state‑specific exemptions or compare them with the federal exemptions.
341 Meeting Procedures: Prepare for your court date with updated rules, expectations, and practical guidance.

Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.

New York and Bankruptcy Code Statutory References

NY Debt & Cred L §285 (2025). Alternative Federal Exemptions.
11 U.S.C. §522. Exemptions.
Civil Practice Law & Rules Section 5206. Real property exempt from application to the satisfaction of money judgments.
Debtor & Creditor Law Section 283. Aggregate individual bankruptcy exemption for certain annuities and personal property.