New York Homestead Exemption in Bankruptcy 2026

If you own a home in New York and are thinking about filing for bankruptcy, one question matters above all others: will you lose your house? Understanding the New York homestead exemption bankruptcy 2026 rules can mean the difference between keeping your home and watching it disappear into a trustee sale. The law gives you real protection. But that protection only works when you know exactly how to claim it.

At Kamini Fox, PLLC, we help individuals and families in Nassau County, Suffolk County, Brooklyn, Queens, and Manhattan navigate this process every day. We want you to understand where you stand before you file a single piece of paper.

What the New York Homestead Exemption in Bankruptcy Actually Does

When you file for bankruptcy in New York, a bankruptcy trustee is appointed to review your assets. Their job is to identify property that can be sold to pay your creditors. The homestead exemption is the legal shield that protects a portion of your home equity from that process.

Under New York Civil Practice Law and Rules § 5206, the homestead exemption applies to your primary residence. That includes a single-family house, a condominium, a cooperative apartment, or a mobile home if you own the land beneath it. The property simply has to be where you actually live.

The exemption does not eliminate your mortgage. It does not stop a lender from foreclosing if you stop making payments. What it does is protect your equity up to a defined dollar limit from unsecured creditors and from the bankruptcy trustee in a Chapter 7 case.

The 2026 Exemption Amounts by County

The exemption amount varies across New York State. Your county of residence determines how much equity you can protect. These figures are adjusted every three years under New York law, and the current amounts apply now.

For 2026, the homestead exemption limits are as follows:

• $204,825 for residents of Kings (Brooklyn), Queens, New York (Manhattan), Bronx, Richmond (Staten Island), Nassau, Suffolk, Rockland, Westchester, and Putnam counties.

• $170,700 for residents of Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties.

• $102,400 for residents of all other counties in New York State.

These are meaningful numbers. If your home equity falls at or below your county's limit, a Chapter 7 trustee generally cannot sell your home to pay unsecured creditors. Your house stays yours.

What Happens If You and Your Spouse Both Own the Home

If you are married and filing jointly, and both spouses are on the deed, you may be able to double the applicable exemption amount. That means a married couple in Nassau County could potentially protect up to $409,650 in home equity. This is one of the most powerful protections available to homeowners in the New York metro area.

Not every situation qualifies for doubling. The specifics depend on how title is held and the facts of your particular case. This is exactly the kind of detail that an experienced attorney reviews with you before you file.

How the Homestead Exemption Works in Chapter 7 Versus Chapter 13

The chapter you file under changes how the homestead exemption functions. Understanding the difference is critical before you make any decisions.

Chapter 7 Bankruptcy

In Chapter 7, the trustee liquidates nonexempt assets to pay your creditors. If your home equity falls within the exemption limit for your county, the trustee has no financial incentive to sell your home. Your equity is protected, and the property stays with you.

If your equity exceeds the exemption limit, the trustee can sell the home, pay you the exempt amount from the proceeds, and distribute the remainder to creditors. This is why knowing your current equity position before you file is so important.

You also need to be current on your mortgage payments in a Chapter 7 case. The automatic stay that goes into effect when you file will temporarily stop a foreclosure. But if you are behind on payments and the stay lifts, the lender can continue the foreclosure process. Chapter 7 is not a long-term fix for a home loan in default.

Chapter 13 Bankruptcy

Chapter 13 works differently. You keep all of your property, including equity that exceeds the exemption limit, as long as your repayment plan pays creditors at least what they would have received in a Chapter 7 liquidation. That nonexempt equity amount has to be accounted for in your plan payments over three to five years.

Chapter 13 is often the better path for homeowners who are behind on their mortgage. It gives you the ability to catch up on arrears through the repayment plan while keeping your home. For many of our clients, it has been a lifeline.

Federal Versus State Exemptions: Which One Should You Choose

New York is one of the states that gives filers a choice. You can use New York's state exemptions or the federal exemption set under 11 U.S.C. § 522. You cannot mix and match from both lists. You pick one set, and that set applies to all of your assets.

For homeowners with significant equity in New York City or its suburbs, the state homestead exemption is typically far more generous than the federal homestead exemption. The federal homestead exemption under 11 U.S.C. § 522(d)(1) is substantially lower than New York's $204,825 for metro counties. For most homeowners in the SDNY and EDNY, state exemptions are the stronger choice.

However, the federal exemption set includes a wildcard provision that can protect a broader range of personal property. If your home equity is modest but you have other valuable assets, the federal exemptions might serve you better overall.

To use New York's state exemptions, you generally must have lived in New York for at least two years before your filing date. If you moved to New York more recently, the rules on which state's exemptions apply become more complicated. An attorney can work through your specific residential history with you.

For authoritative reference, the full text of New York's homestead statute is available through New York Civil Practice Law and Rules § 5206. The federal exemption amounts are governed by 11 U.S.C. § 522.

The Federal Cap on Homestead Protection You Need to Know About

There is a federal rule that catches many homeowners off guard. Under 11 U.S.C. § 522(p), if you acquired your home within 1,215 days (roughly 40 months) before your bankruptcy filing date, your homestead exemption may be capped at $214,000 regardless of what New York state law allows.

This cap currently applies to cases filed between April 1, 2025, and March 31, 2028. If you bought your home recently and your equity has grown quickly, this rule could limit how much of that equity you can protect.

There is an exception. The cap does not apply if you purchased your new home using proceeds from the sale of a prior home in the same state. In that situation, the full state exemption amount is available to you.

This is one of the less-discussed traps in the homestead exemption rules. If you purchased your home within the last three and a half years, your attorney needs to analyze whether this cap applies to your situation before you file.

What the Homestead Exemption Does Not Protect Against

The homestead exemption is powerful, but it does not protect everything. You should be clear on its limits.

It does not stop your mortgage lender from foreclosing if you are behind on payments. The exemption protects equity from unsecured creditors and the bankruptcy trustee, not from your secured lender. Your mortgage is a lien on the property, and that lien survives bankruptcy unless specifically addressed.

It also does not shield you from federal or state tax liens, unpaid child support or spousal support obligations, or Medicaid estate recovery claims. If any of these debts exist, they can still attach to your home even if the homestead exemption applies.

The exemption also only protects your primary residence. Investment properties, rental units you do not live in, and vacation homes are not covered. If you own multiple properties, only the one where you actually live qualifies for homestead protection.

How to Claim the Homestead Exemption When You File

Claiming the exemption is not automatic. You must properly list your home on Schedule A/B of your bankruptcy petition and then specifically claim the homestead exemption on Schedule C. If you fail to list it correctly, you risk losing the protection entirely.

Bankruptcy trustees in both the Southern District of New York and the Eastern District of New York review exemption claims carefully. An error or omission on Schedule C can give the trustee grounds to object to your exemption claim. If that objection is sustained, your equity may no longer be protected.

This is not a process you want to navigate alone. The paperwork looks straightforward, but the consequences of a mistake are serious. You had every legal right to protect that equity. An experienced attorney makes sure you actually do.

Protect Your Home. Talk to Kamini Fox, PLLC Today.

Being in debt is stressful. Worrying about your home makes it worse. You deserve honest answers and a clear path forward, not more confusion.

At Kamini Fox, PLLC, we never sit in judgment of the situation you are in. We care about your future. Attorney Kamini Fox has spent more than 20 years helping New York homeowners understand exactly how much protection they have and how to use it. We are committed to your success.

If you are thinking about filing for bankruptcy and want to know how the New York homestead exemption applies to your specific home and county, contact us now. Visit kfoxlaw.com to schedule your consultation. We serve clients in Nassau County, Suffolk County, Manhattan, Brooklyn, and Queens, and we are ready to listen.

Frequently Asked Questions

Q: What is the New York homestead exemption amount for bankruptcy in 2026?

A: The New York homestead exemption bankruptcy 2026 amount depends on where you live in the state. Residents of Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, and Putnam counties can protect up to $204,825 in home equity. Residents of Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties are protected up to $170,700. All other counties have a $102,400 limit. Married couples who co-own and file jointly may be able to double these amounts. Kamini Fox, PLLC can confirm exactly how much equity you can protect based on your county and situation.

Q: Can I keep my house if I file Chapter 7 bankruptcy in New York?

A: Yes, in many cases you can keep your home when you file Chapter 7 bankruptcy in New York. If your home equity does not exceed the New York homestead exemption bankruptcy 2026 limit for your county, the trustee has no basis to sell your property. You must also be current on your mortgage payments, because Chapter 7 does not eliminate a lender's right to foreclose for nonpayment. If your equity exceeds the exemption or you are behind on your loan, Chapter 13 may be a better option. At Kamini Fox, PLLC, we help you evaluate both paths before you make any decisions.

Q: Does the homestead exemption apply to co-ops and condos in New York bankruptcy?

A: Yes, the New York homestead exemption applies to more than just single-family houses. In a bankruptcy filing, the exemption covers cooperative apartments, condominiums, and mobile homes where you own the underlying land. The key requirement in every case is that the property must be your primary residence at the time you file. The New York homestead exemption bankruptcy 2026 rules do not protect investment properties or secondary homes. If you live in a co-op in Queens or a condo in Brooklyn and are considering bankruptcy, speak with Kamini Fox, PLLC to confirm your equity is properly protected.

Q: What is the federal cap on the homestead exemption and does it affect New York filers?

A: Under 11 U.S.C. § 522(p), federal law caps homestead protection at $214,000 if you acquired your home within roughly 40 months before your bankruptcy filing date. This rule applies to cases filed between April 1, 2025, and March 31, 2028, which includes all New York homestead exemption bankruptcy 2026 filings. If you purchased your home recently and your equity has appreciated above $214,000, this cap could reduce your protection below what New York state law would otherwise allow. The cap does not apply if you used proceeds from the sale of a prior New York home to buy your current one. Kamini Fox, PLLC reviews your purchase date and equity position before you file to prevent this from catching you by surprise.

Q: Should I choose the New York state exemptions or the federal exemptions when I file bankruptcy?

A: Most New York homeowners with meaningful home equity benefit from the state exemption set, because the New York homestead exemption bankruptcy 2026 limits are significantly higher than the federal homestead amount under 11 U.S.C. § 522(d)(1). However, the federal set includes a larger wildcard exemption that can protect other personal assets. You must choose one system or the other. You cannot combine exemptions from both lists. To qualify for New York state exemptions, you generally need to have lived in New York for at least two years before filing. Kamini Fox, PLLC compares both exemption sets against your specific assets so you keep everything the law allows.

Q: What happens if my home equity exceeds the homestead exemption limit in a Chapter 7 case?

A: If your home equity exceeds the New York homestead exemption bankruptcy 2026 limit for your county, a Chapter 7 trustee has the right to sell your home. The trustee would pay you the exempt amount from the proceeds and distribute the rest to your creditors. This is one of the most important reasons to know your equity position before you file. In many situations, Chapter 13 is a better solution because it lets you keep property with nonexempt equity as long as your repayment plan accounts for that value. At Kamini Fox, PLLC, we analyze your home equity before recommending any course of action, so there are no surprises after you file.

Q: Do I need an attorney to claim the homestead exemption in a New York bankruptcy case?

A: You are not legally required to hire an attorney, but the risks of filing without one are significant. The homestead exemption must be claimed properly on Schedule C of your bankruptcy petition. If the exemption is listed incorrectly or omitted, a trustee in the SDNY or EDNY can object and you could lose the protection you were legally entitled to claim. Given that the New York homestead exemption bankruptcy 2026 can shield over $200,000 in home equity for metro area filers, the cost of a mistake far outweighs the cost of working with an experienced attorney. Kamini Fox, PLLC has filed more than a thousand petitions in New York bankruptcy courts and knows how to get your exemptions right.