New Bankruptcy law greatly increases exemptions for consumers!

On December 24, 2010, Governor Patterson signed a long awaiting legislation that greatly
increases exemptions for consumers. Exemptions are laws that protect property that the debtor is
allowed to retain in bankruptcy.

Homestead exemption is increased from $50,000 to $150,000 for a majority of the counties in
New York. Now your home will be protected from creditors if you have less then or $150,000 in
equity in your home (i.e., the difference between your home’s market value and total mortgage). This amount doubles for a total of $300,000 for spouses.

Amounts for almost all other exemptions are increased as well. Exemption for one motor vehicle is increased from $2,400 to $4,000. The new law increases exemptions for such assets as books and tools of trade. In addition, the new law creates a number of new exemption categories such as jewelry, art and computer.

Moreover, the new law permits debtors to choose between New York state and federal exemptions. Those consumers, who do not need to take advantage of the homestead exemption, will be able to protect a generous amount of cash under the federal “wild card” exemption.

These major changes in bankruptcy law could make you eligible to file for Chapter 7 bankruptcy without any fear of losing your home or other previously non-exempt or not fully exempt assets.


Bankruptcy is a legal proceeding brought in the United States Bankruptcy Court, the purpose of which is to give debtors a “fresh start” by discharging most, if not all, of their debts while at the same time distributing debtor’s non-exempt asssets among the creditors.

The filing of the bankruptcy petition immediately stays all creditors’ collections efforts, irrespective of the actual stage of the collection. Filing for bankruptcy will automatically:

  • Stop harassing collection calls
  • Stop repossession and/or foreclosure
  • Stop collection lawsuits
  • Stop wage garnishments

Chapter 7, commonly reffered to as liquidation bankruptcy, is the most common form of bankruptcy proceeding. In Chapter 7, all of the debtor’s non-exempt assets are liquidated and then distributed among the debtor’s creditors and the debtor’s debts are discharged.

Chapter 13, commonly referred to as the “wage earner plan”, is designed for debtors with regular income and allows the debtor to partially repay his or her debts under a 3 to 5 year plan, while at the same type retaining possession of the non-exempt assets that would otherwise be liquidated and distributed among creditors. Debtor is granted discharge after making all payments under the plan.

Property that the debtor is permitted to retain in bankruptcy is called “exempt property.” The amount and type of property exemptions available to the debtor will help determine whether it is benefical for the debtor to file for bankruptcy and under which Chapter. All non-exempt property is subject to liqudation and distribution among creditors by the Bankruptcy Trustee.

Not all debts are dischargeable in bankruptcy. Certain debts such as domestic obligations (child support, alimony) and certain taxes are not dischargeable as a matter of law. Also, creditors are entitled to file objections to discharge of certain other debts. It is very important for debtors to understand which debts will not be discharged even after they go through the bankruptcy process.

Even though it is possible for an individual to file for bankruptcy pro se, bankruptcy process is an intricate process that requires thorough understanding of laws and their application, involving careful planning to obtain most beneficial result. Therefore, when faced with an important decision to file for bankruptcy, it is essential to have knowledgeble and experienced attorney on your side. Our attorneys led numerous cases to successful results, with all of our bankruptcy clients having been granted discharge.

To speak directly to one of our attorneys, please call us at 718-332-2260 or fill out contact form to the right.


If the bankruptcy is not the right option for you, our firm also provides debt negotiation services. Our attorneys have been succesfully helping clients manage their debts by effectively negotiating outstanding credit card balances down to 40-50% of the origianl debt and obtaining the best possible rating for the credit report. Our attorneys negotiate direclty with each individual creditor to lower the overall balance owed. 

Debt negotiation comes with it’s own pitfalls. Therefore, it is very important to have knowledgeable and experienced attorney on your side to negotiate the best possible outcome.

Our attorneys are experienced in various consumer protections laws such as Fair Debt Collection Practices Act ("FDCPA") and Fair Credit Reporting Act (“FCRA”), which prevent unfair collection practices and ensure accurate reporting of the information on your credit report.

To speak directly to one of our attorneys, please call us at 718-332-2260 or fill out contact form to the right.


DISCLAIMER: The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.