New York Bankruptcy Exemptions in 2026: What Has Changed

If you are thinking about filing for bankruptcy in New York, one of the most important things you need to understand is what property you get to keep. New York bankruptcy exemptions 2026 are the legal protections that stand between you and the loss of your home, your car, and the essentials your family depends on. Understanding where the law stands right now, and where it may be headed, can make all the difference in your case. At Kamini Fox, PLLC, we help individuals and families in Nassau County, Suffolk County, Manhattan, Brooklyn, and Queens protect what matters most when the financial pressure becomes unbearable.

What Are New York Bankruptcy Exemptions and Why Do They Matter?

Bankruptcy exemptions are categories of property that the law shields from your creditors and the bankruptcy trustee. When you file under Chapter 7 or Chapter 13, you do not lose everything. The exemption system exists precisely to give you a foundation for a fresh start.

Bankruptcy helps struggling people get back on their feet by lessening their debt burden, not stripping them of everything they own. Exemptions allow bankruptcy filers to keep the property and assets needed to maintain a home and employment.

In Chapter 7, the trustee sells your non-exempt property and uses the proceeds to pay creditors. In Chapter 7 bankruptcy, the trustee responsible for the case sells the nonexempt property and pays creditors with the proceeds. In Chapter 13 bankruptcy, filers must pay the nonexempt portion through the Chapter 13 repayment plan.

Knowing which assets are protected before you file gives you real control over the outcome of your case.

New York State vs. Federal Exemptions: Which Set Should You Choose?

New York filers are fortunate because they have two exemption choices: the state or the federal bankruptcy exemptions. You will want to review each list carefully and compare it to the property you own, because you cannot use exemptions from both lists.

New York is a "choice" state: debtors who have lived in New York for at least two years can use either the federal exemptions or New York's state exemptions, but not both. If you moved within the last two years, federal exemptions may be required by default.

The choice matters more than most people realize. The federal wildcard exemption (up to $14,875) may protect more personal property, while New York state exemptions may offer stronger homestead protection. In most cases involving significant home equity, the New York state exemptions come out ahead. An experienced bankruptcy attorney will run the numbers on both sets before you file.

The New York Homestead Exemption in 2026: Amounts by County

The homestead exemption is the centerpiece of most consumer bankruptcy cases in New York. It protects the equity in your primary residence, whether that is a house, a condominium, a cooperative apartment, or a mobile home.

Generally, the homestead exemption protects equity in the home you live in. A New York debtor can protect the equity in a house, condominium, co-op, or mobile home used as a residence up to the following values: $204,825 in Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, and Putnam counties; $170,700 in Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties.

For all remaining counties in the state, a lower limit applies. Married couples who both own the property and file jointly can double these amounts, which provides substantial protection for Long Island and New York City homeowners.

The Federal Cap on Recently Acquired Homes

There is an important federal limitation you need to know about. Federal law caps homestead protection at $214,000 for homes acquired within 1,215 days (about 40 months) before filing. This applies to cases filed between April 1, 2025, and March 31, 2028.

If you bought your home in the last three and a half years and you have significant equity, this cap could affect how much protection you actually receive. This is exactly the kind of detail that a seasoned bankruptcy attorney will catch before you file.

Proposed Legislation That Could Raise These Limits Dramatically

There is active legislative activity in Albany that every New York homeowner should watch. Pending legislation (S.8109A) proposes to significantly increase homestead and vehicle exemptions, including a $600,000 home exemption in metro counties, indexed to home values.

This bill relates to the calculation of the homestead exemption amount, relates to the indexing of the homestead exemption for housing value changes, and limits the homestead exemption available to bankruptcy debtors to one exemption per household. As of the date of this post, the bill remains in committee. It has not been signed into law. You should not plan your bankruptcy strategy around proposed legislation. Work with your attorney on the rules currently in effect.

The current exemption amounts are effective as of April 1, 2024, and the next scheduled adjustment is April 1, 2027. For the most current official figures, you can visit the New York Department of Financial Services exemptions page.

Motor Vehicle, Personal Property, and Retirement Asset Protections

Your Vehicle

In New York, you can protect up to $5,500 in value or up to $13,625 if the vehicle is equipped for use by a disabled debtor. This figure applies to the vehicle's equity, meaning the market value minus what you still owe on any loan.

If the proposed Senate Bill S.8109A passes, the motor vehicle exemption would increase to one motor vehicle not exceeding ten thousand dollars in value above liens and encumbrances of the debtor, and up to twenty-five thousand dollars for a vehicle equipped for use by a disabled debtor. Again, this is proposed law, not current law.

Wages, Public Benefits, and Personal Property

New York provides strong protections for your income and government benefits. You can protect 90% of income received within 60 days before filing bankruptcy and 100% of pay to a noncommissioned officer, private, or musician in the armed forces of the U.S. or New York.

Benefits from crime victim reparations laws are protected. Aid to the blind, aged, and disabled, crime victim compensation, home relief, local public assistance, Social Security, unemployment, veterans' benefits, and workers' compensation are all fully shielded.

Retirement Accounts

This is one area where New York debtors receive outstanding protection. Most tax-exempt pensions and retirement accounts are exempt because federal law allows filers to keep them tax-exempt in bankruptcy. These retirement accounts include 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and traditional and Roth IRAs to $1,711,975 per person for cases filed between April 1, 2025, and March 31, 2028.

If you have worked hard to build a retirement fund, filing for bankruptcy does not put it at risk. That protection is significant, and it is one reason why bankruptcy, handled correctly, can preserve far more than most people expect.

How SDNY and EDNY Courts Apply New York Exemption Law

New York has four federal bankruptcy districts, and where you file matters. New York has 4 federal bankruptcy districts. The district where you file depends on where you have lived for the greater part of the last 180 days. Each district may have different local rules, no-look fee amounts, and trustee practices.

Most of K Fox Law's clients file in the Eastern District of New York (EDNY), which covers Nassau County, Suffolk County, Brooklyn, and Queens, or in the Southern District of New York (SDNY), which covers Manhattan and the Bronx. Both courts apply New York's exemption statutes as set out in CPLR §§ 5205 and 5206, and the Debtor and Creditor Law §§ 282 and 283, but local trustee practices and the degree to which exemptions are scrutinized can vary.

This is not a process you want to navigate alone. Filing for bankruptcy relief in New York is complex, and a task you should never try to accomplish alone. Trustees in both the SDNY and EDNY are experienced and will closely examine your Schedule C, which is the form where you list every exemption you are claiming. Any errors or omissions can cost you property you had every legal right to keep.

What Happens to Property That Is Not Exempt?

If you own property whose value exceeds your available exemptions, you have options. You are not automatically forced to surrender it.

In Chapter 13, you can keep all your property. However, that comes at a price. You will pay your creditors the value of any property not covered by an exemption in your Chapter 13 repayment plan.

In Chapter 7, the trustee will sell non-exempt assets and distribute the proceeds to creditors. However, many filers are surprised to learn that they are what attorneys call "no asset" cases, meaning all of their property falls within the exemption limits and creditors receive nothing from their assets.

Each partner in a joint filing must employ the same exemption scheme. One spouse cannot claim federal exemptions while the other claims New York exemptions. Getting this right from the start is critical.

The right strategy depends entirely on your specific situation: your income, your assets, your debt load, and your goals.

Protect What You Have Built. Call Kamini Fox, PLLC Today.

Being in debt does not mean you have to lose everything. New York's exemption system exists to protect you, and when it is applied correctly, it can shield your home, your vehicle, your retirement savings, and your income from creditors.

At Kamini Fox, PLLC, we have spent more than 20 years going to bat for clients in Nassau County, Suffolk County, Manhattan, Brooklyn, and Queens. We take the time to understand your specific situation, map out a strategy that protects as much as possible, and follow through with the kind of hands-on advocacy that gets results. We never sit in judgment of you. We are dedicated to your success.

If you are ready to find out what you can keep and how to get a fresh start, contact us today for an initial consultation. Call 516-493-9920 or reach us by email through [kfoxlaw.com](https://kfoxlaw.com). Your financial future is worth fighting for, and we are here to help.

Frequently Asked Questions

What are New York bankruptcy exemptions and what property do they protect?

New York bankruptcy exemptions are legal protections under New York state law and Title 11 of the U.S. Bankruptcy Code that allow filers to keep certain property when going through bankruptcy. They cover categories including your primary home, one motor vehicle, retirement accounts, wages, and public benefits such as Social Security and unemployment. The homestead exemption alone can protect up to $204,825 in home equity for filers in New York City metro counties. Consulting a bankruptcy attorney helps you identify which exemptions apply to your specific assets before you file.

What is the New York homestead exemption amount in 2026?

The New York homestead exemption in 2026 protects up to $204,825 in home equity for filers in Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, and Putnam counties. For Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties, the limit is $170,700, and a lower figure applies to all remaining counties. Married couples who both own the property and file jointly can double these amounts. These figures are based on the April 1, 2024 adjustment, with the next scheduled update set for April 1, 2027. An experienced New York bankruptcy attorney can confirm the current amount for your county.

Can I keep my car if I file for bankruptcy in New York?

Yes, you can keep your car when filing for bankruptcy in New York if the equity in your vehicle falls within the exemption limit. Under current New York state law, filers can protect up to $5,500 in vehicle equity, or up to $13,625 for a vehicle equipped for use by a disabled debtor. Equity means the car's market value minus what you still owe on any loan. If your equity exceeds the limit, a Chapter 13 filing may allow you to keep the vehicle by paying creditors the excess value through your repayment plan. An attorney at Kamini Fox, PLLC can help you calculate your exposure before you file.

What is the difference between New York state bankruptcy exemptions and federal bankruptcy exemptions?

New York state bankruptcy exemptions and federal bankruptcy exemptions are two separate sets of asset protections, and New York filers must choose one or the other because they cannot combine both. New York state exemptions generally offer higher homestead protection, especially in high-cost metro counties, while the federal exemption set provides a larger wildcard exemption of up to $17,475 that can protect a wider range of personal property. You must have lived in New York for at least two years to use the state exemptions. The best choice depends entirely on the assets you own, and a bankruptcy attorney can run both scenarios to find the most favorable option.

Do New York bankruptcy exemptions protect retirement accounts like a 401k or IRA?

Yes, New York bankruptcy exemptions fully protect most tax-qualified retirement accounts, including 401(k)s, 403(b)s, pensions, SEP IRAs, SIMPLE IRAs, and traditional and Roth IRAs up to $1,711,975 per person for cases filed between April 1, 2025, and March 31, 2028. Both federal law and New York state law provide this protection, which means your retirement savings are generally not at risk when you file for bankruptcy. This protection applies regardless of whether you file under Chapter 7 or Chapter 13. If you have questions about a specific type of retirement account, a New York bankruptcy attorney can confirm whether it qualifies.

How long does it take to complete a bankruptcy case in New York?

A Chapter 7 bankruptcy case in New York typically concludes in four to six months from the date of filing. After your case is filed, an automatic stay immediately stops all collection actions, and you will attend a 341 meeting of creditors roughly 30 to 45 days later. If all requirements are met, you receive your discharge approximately 60 to 90 days after that meeting. A Chapter 13 case takes three to five years to complete because it involves a court-approved repayment plan. Kamini Fox, PLLC guides clients through every step of this process, from the initial filing to final discharge.

Do I need a lawyer to file for bankruptcy in New York and claim exemptions correctly?

You are not legally required to hire a lawyer to file for bankruptcy in New York, but the stakes are high enough that working with an experienced attorney is strongly advisable. Incorrectly listing exemptions on Schedule C can result in losing property you had every legal right to protect. Bankruptcy trustees in the EDNY and SDNY scrutinize exemption claims closely, and mistakes or omissions can be costly. An attorney at Kamini Fox, PLLC will analyze your assets under both the state and federal exemption sets, identify the most protective strategy, and make sure your filing is accurate from the start.