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New York Exemptions

New York Bankruptcy exemption statutes

(as of new exemption law January 21, 2011)

Summary:

When filing bankruptcy, a debtor lists all assets (real estate, personal property, right to receive benefits, claims against others) on the bankruptcy schedules. A New York State bankruptcy debtor may then "exempt", or keep free and clear of the bankruptcy trustee, certain assets. These are called "exempt assets"; assets that are not exempt and have significant value are called "unexempt" and are turned over to the bankruptcy trustee. Most debtors do not have any unexempt assets.

If a debtor has lived in New York for at least two years, they have the option of exempting EITHER the "federal list" of bankruptcy exemptions OR the New York State list of bankruptcy exemptions. (If a debtor was not living in New York the previous two years, the exemption situation becomes much more complicated; the exemption laws of the state where the debtor lives apply, or, sometimes, the federal list can be used.)

Which set of exemptions should a debtor use? Federal or New York State? In most circumstances, the choice will be determined by equity in the debtor's residence. If a debtor does not own their own house, or if the debtor's residence has little if any equity in it (under $10,000), the federal list of exemptions usually protects more assets. If the debtor has significant equity in their house, usually the New York State list is a better choice. "Equity" means value of the house minus all mortgages, outstanding property tax, judgment liens, IRS liens etc.
Each individual bankruptcy debtor is entitled to an exemption, so, for example, if a house is jointly owned by a jointly-filing husband and wife, each one gets to claim the homestead exemption.

NOTE: EXEMPTION LAW IS VERY COMPLICATED. The summary below is intended just to highlight exemption issues, but whether an asset qualifies for a specific exemption depends on the actual text of the applicable exemption statute. I have set out the full text of both the federal and the New York State bankruptcy exemptions below my summary. Note that sometimes the same category of exemption on the federal and state list is defined slightly differently in the federal statute and the New York statute. Furthermore, for many assets, extensive case law decisions have interpreted these statutes.

DO NOT ASSUME THAT YOUR ASSET IS EXEMPT WITHOUT SPEAKING WITH AN EXPERIENCED BANKRUPTCY ATTORNEY.

Assets exempt under both the Federal list and New York State list:

1) "Qualified" retirement accounts. "Qualified" means a retirement plan that is regulated by the Internal Revenue Code, such as a 401(k), 403(b), etc. (this is a complicated area if the retirement plan is highly unusual or out of the ordinary.)

2) Social security, unemployment, veterans, or disability benefits

3) Alimony, maintenance or child support

A brief summary of the Federal exemptions, per debtor: The chief advantage of the federal exemptions, in comparison to the New York State list, is the "wildcard", which allows a debtor to exempt up to $11,962.50 of any asset not otherwise exempt. Under the federal exemptions, a bankruptcy debtor can exempt:

1) Homestead (debtor's personal residence): $21,625 per debtor. As a practical matter, if the debtor has a house with more than half this amount ($10,812.50), it is likely the debtor will do better with the New York exemptions (the federal "wildcard" is available only if the debtor does not use all of the federal homestead exemption.)

2) Equity in a motor vehicle: $3,450

3) Household goods and clothing: $11,525

4) Jewelry: $1,450

5) Wildcard: For a debtor who has not used the homestead exempt, or has not use more than half the homestead exemption: $11,962.50 for assets not otherwise exempt.

6) Tools used in business ("tools of the trade"): $2,175

7) Life insurance contract

8) Cash value of a life insurance contract : $11,525

9) Professionally prescribed health aids

10) Right to receive benefits: social security; unemployment; public assistance; veterans' benefit; disability, illness, or unemployment benefit; alimony, support, or separate maintenance; pensions (Note: "right to receive" does not mean that the funds from the benefit can be exempted after they have been received.)

11) Personal injury: Right to receive or funds traceable to personal injury payment (up to $21,625); crime victim's reparation; and, if necessary for the support of the debtor and dependents, a wrongful death payment, life insurance contract, and payment for loss of future earnings

A brief summary of the most common New York State bankruptcy exemptions, per debtor:

1) Homestead equity, Central/Western New York: $75,000 ($150,000 in New York City, Long Island and Lower Hudson counties; $125,000 in Upper Hudson and Albany area counties; $75,000 everywhere else.)

2) Cash: IF a debtor does not claim a homestead exemption: $5,000 cash, bank accounts and tax refunds owed (usually a debtor not using the homestead exemptions would be better off with the federal exemptions.)

3) Household goods and apparel: $10,000 (note: the books, wedding ring, watch, jewelry, art, and tools of the trade exemptions, below, are included in the $10,000 overall household goods exemption)

4) Books: $500

5) Wedding ring (no limit, beyond the $10,000 household goods limit)

6) Watch, jewelry, art $1,000

7) Tools of the trade $3,000

8) Equity in motor vehicle $4,000

9) Wages: 90% of funds traceable to wages or personal services income received within the previous 60 days (this is separate from the 'cash' exemption, above)

10) Exempt cash in a bank: up to $2,500 of funds in a bank account traceable to statutory exempt funds, such as social security, unemployment, worker's comp etc., received within the previous 45 days (this is also separate from the 'cash' exemption, above)

11) Pensions and Retirement accounts (fully exempt)

12) Benefits: right to receive, or debtor's interest in, social security; unemployment; public assistance; veterans' benefit; disability, illness, or unemployment benefit; alimony, support, or separate maintenance; pensions (note: unlike federal exemptions, NY exemptions include "the debtor's interest in" these exemptions; it is an open legal question as to whether a debtor can exempt in bankruptcy exempt funds, other than retirement funds, after they are received. See In re Wydner Bankruptcy Court WDNY-Rochester bk #10-20209, decision July 11, 2011; on appeal)

13) Personal injury: Right to receive or funds traceable to personal injury payment (up to $7,500); crime victim's reparation; and, if necessary for the support of the debtor and dependents, a wrongful death payment, life insurance contract, and payment for loss of future earnings

Below is the actual text of exemptions available to New York bankruptcy debtors. Part I summarizes the applicable statutes. Part II includes the actual text of the Federal exemptions. Part III includes the actual text of the New York exemptions.

Note: Under 11 USC Section 522 (b)(3)(C), bankruptcy debtors claiming state law exemptions, are also entitled to exempt "retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986."

Note also: certain property is not considered property of the estate, which is the same as being exempt, no matter if one is using either state or federal exemptions:

11 USC 541: property of the estate [Subsection (a) is omitted as unchanged]

(b) Property of the estate does not include -

  • any power that the debtor may exercise solely for the benefit of an entity other than the debtor;
  • any interest of the debtor as a lessee under a lease of nonresidential real property that has terminated at the expiration of the stated term of such lease before the commencement of the case under this title, . . .
  • any eligibility of the debtor to participate in programs authorized under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.; 42 U.S.C. 2751 et seq.), or any accreditation status or State licensure of the debtor as an educational institution;
  • any interest of the debtor in liquid or gaseous hydrocarbons . . .
  • funds placed in an education individual retirement account (as defined in section 530(b)(1) of the Internal Revenue Code of 1986) not later than 365 days before the date of the filing of the petition in a case under this title, (see Sect. 541(b)(5) for limitations)
  • funds used to purchase a tuition credit or certificate or contributed to an account in accordance with section 529(b)(1)(A) of the Internal Revenue Code of 1986 under a qualified State tuition program (as defined in section 529(b)(1) of such Code) not later than 365 days before the date of the filing of the petition in a case under this title . . . (see Sect. 541(b)(6) for limitations)
  • any amount -
  • withheld by an employer from the wages of employees for payment as contributions-
  • to -
  • an employee benefit plan that is subject to title I of the Employee Retirement Income Security Act of 1974 or under an employee benefit plan which is a governmental plan under section 414(d) of the Internal Revenue Code of 1986;
  • a deferred compensation plan under section 457 of the Internal Revenue Code of 1986; or
  • a tax-deferred annuity under section 403(b) of the Internal Revenue Code of 1986; . . .
  • to a health insurance plan regulated by State law whether or not subject to such title; or
  • received by an employer from employees for payment as contributions--
  • to--
  • an employee benefit plan that is subject to title I of the Employee Retirement Income Security Act of 1974 or under an employee benefit plan which is a governmental plan under section 414(d) of the Internal Revenue Code of 1986;
  • a deferred compensation plan under section 457 of the Internal Revenue Code of 1986; or
  • a tax-deferred annuity under section 403(b) of the Internal Revenue Code of 1986;
  • (ii) to a health insurance plan regulated by State law whether or not subject to such title.
  • subject to subchapter III of chapter 5, any interest of the debtor in property where the debtor pledged or sold tangible personal property (other than securities or written or printed evidences of indebtedness or title) as collateral for a loan or advance of money given by a person licensed under law to make such loans or advances, where--
  • the tangible personal property is in the possession of the pledgee or transferee;
  • the debtor has no obligation to repay the money, redeem the collateral, or buy back the property at a stipulated price; and
  • neither the debtor nor the trustee have exercised any right to redeem provided under the contract or State law, in a timely manner as provided under State law and section 108(b); or'.
  • any interest in cash or cash equivalents that constitute proceeds of a sale by the debtor of a money order that is made - (A) on or after the date that is 14 days prior to the date on which the petition is filed; and (B) under an agreement with a money order issuer that prohibits the commingling of such proceeds with property of the debtor (notwithstanding that, contrary to the agreement, the proceeds may have been commingled with property of the debtor), unless the money order issuer had not taken action, prior to the filing of the petition, to require compliance with the prohibition. Paragraph (4) shall not be construed to exclude from the estate any consideration the debtor retains, receives, or is entitled to receive for transferring an interest in liquid or gaseous hydrocarbons pursuant to a farmout agreement.

Social security benefits not property of the estate: (Effective April 20, 1983)

42 U.S.C. 407. Assignment of benefits (a) In general - The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

PART I - SUMMARY:

Each state is entitled to list property that a bankruptcy debtor is entitled to keep free and clear of the bankruptcy trustee. These assets are commonly referred to as 'exempt property.' In New York State debtors are entitled to exempt EITHER

  • Federal exemptions under 11 USC Sect. 522

OR

  • Property described in the following statutes:
  • Debtor and Creditor (D&C) Section 282
  • Debtor and Creditor (D&C) Section 283
  • Civil Practice Law and Rules (CPLR) Section 5205
  • Civil Practice Law and Rules (CPLR) Section 5206
  • Insurance Law Section 3212

Note: The dollar amount in these sections is adjusted every three years under CPLR 5256.

PART II - FEDERAL EXEMPTIONS:

(d) The following property may be exempted under subsection (b)(2) of this section:

  • The debtor's aggregate interest, not to exceed [$21,625]* in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor.
  • The debtor's interest, not to exceed [$3,450]* in value, in one motor vehicle.
  • The debtor's interest, not to exceed [$550]* in value in any particular item or [$11,525]* in aggregate value, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.
  • The debtor's aggregate interest, not to exceed [$1,450]* in value, in jewelry held primarily for the personal, family, or household use of the debtor or a dependent of the debtor.
  • The debtor's aggregate interest in any property, not to exceed in value [$1,150]* plus up to [$10,825]* of any unused amount of the exemption provided under paragraph (1) of this subsection.
  • (6) The debtor's aggregate interest, not to exceed [$2,175]* in value, in any implements, professional books, or tools, of the trade of the debtor or the trade of a dependent of the debtor.
  • Any unmatured life insurance contract owned by the debtor, other than a credit life insurance contract.
  • The debtor's aggregate interest, not to exceed in value [$11,525]* less any amount of property of the estate transferred in the manner specified in section 542(d) of this title, in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent.
  • Professionally prescribed health aids for the debtor or a dependent of the debtor.
  • The debtor's right to receive -
  • a social security benefit, unemployment compensation, or a local public assistance benefit;
  • a veterans' benefit;
  • a disability, illness, or unemployment benefit;
  • alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;
  • a payment under a stock bonus, pension, profitsharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, unless -
  • such plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debtor's rights under such plan or contract arose;
  • such payment is on account of age or length of service; and
  • such plan or contract does not qualify under section 401(a), 403(a), 403(b), or 408 of the Internal Revenue Code of 1986.
  • The debtor's right to receive, or property that is traceable to -
  • an award under a crime victim's reparation law;
  • a payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any
    dependent of the debtor;
  • a payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent on the date of such individual's death, to the extent reasonably
    necessary for the support of the debtor and any dependent of the debtor;
  • a payment, not to exceed [$21,625]*, on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of
    whom the debtor is a dependent; or
  • a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.
  • Retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986.

*amounts as of April 1, 2010

The following items are (or are not) considered 'household goods" for the purpose of avoiding a lien under 11 USC 522(f)(1)(B), and would probably be treated the same for the purposes of the exemption at 522(d)(3):

(4)(A) Subject to subparagraph (B), for purposes of paragraph (1)(B), the term "household goods" means -

  • clothing;
  • furniture;
  • appliances;
  • 1 radio;
  • 1 television;
  • 1 VCR;
  • linens;
  • china;
  • crockery;
  • kitchenware;
  • educational materials and educational equipment primarily for the use of minor dependent children of the debtor;
  • medical equipment and supplies;
  • furniture exclusively for the use of minor children, or elderly or disabled dependents of the debtor;
  • personal effects (including the toys and hobby equipment of minor dependent children and wedding rings) of the debtor and the dependents of the debtor; and
  • 1 personal computer and related equipment.

(B) The term "household goods" does not include -

  • works of art (unless by or of the debtor, or any relative of the debtor);
  • electronic entertainment equipment with a fair market value of more than [$600]* in the aggregate (except 1 television, 1 radio, and 1 VCR);
  • items acquired as antiques with a fair market value of more than [$600]* in the aggregate;
  • jewelry with a fair market value of more than [$600]* in the aggregate (except wedding rings); and
  • a computer (except as otherwise provided for in this section), motor vehicle (including a tractor or lawn tractor), boat, or a motorized recreational device, conveyance, vehicle, watercraft, or aircraft.

*amounts as of April 1, 2010

PART III - NEW YORK EXEMPTIONS:

The actual text of the New York exemption statutes is as follows (Mr. Scribner has separated out phrases in the statutes for easier comprehension) are as follows:

NOTE: for clarification sake, in places where dollar amounts or section numbers are spelled out, such as "five hundred dollars" or "five hundred twenty-two of title eleven 11of the United States Code", I have replaced the words with numbers: "$500" or 11 USC 522"

Note: changes on New York exemptions effective 2010 are in italics.

D&C Sect. 282:

282. Permissible exemptions in bankruptcy.

Under 522 of title 11of the United States Code, entitled "Bankruptcy", an individual debtor domiciled in this state may exempt from the property of the estate, to the extent permitted by subsection (b) thereof, only

  • personal and real property exempt from application to the satisfaction of money judgments under CPLR 5205 and 5206 of the civil practice law and rules,
  • insurance policies and annuity contracts and the proceeds and avails thereof as provided in 3212 of the insurance law and
  • the following property:
  • Bankruptcy exemption of a motor vehicle. One motor vehicle not exceeding four thousand dollars in value above liens and encumbrances of the debtor; provided, however, if such vehicle has been equipped for use by a disabled debtor, then ten thousand dollars in value above liens and encumbrances of the debtor.
  • Bankruptcy exemption for right to receive benefits. The debtor's right to receive or the debtor's interest in:
  • a social security benefit, unemployment compensation or a local public assistance benefit;
  • a veterans' benefit;
  • a disability, illness, or unemployment benefit; [including Worker's Compensation, per Judge Ninfo's decision in Herald, Bk #99-2078]
  • alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor; and
  • all payments under a stock bonus, pension, profit sharing, or similar plan or contract on account of illness, disability, death, age, or length of service unless
  • such plan or contract,
  • except those qualified under 401, 408 or 408A of the United Stateso Internal Revenue Code of 1986, as amended,
  • was established by the debtor or under the auspices of an insider that employed the debtor at the time the debtor's rights under such plan or contract arose,
  • (ii) such plan is on account of age or length of service, and
  • (iii) such plan or contract does not qualify under

401(a), 403(a), 403(b), 408, 408A, 409 or 457

of the Internal Revenue Code of 1986, as amended.

3. Bankruptcy exemption for right to receive certain property. The debtor's right to receive, or property that is traceable to:

  • an award under a crime victim's reparation law;
  • a payment on account of the wrongful death of an individual of whom the debtor was a dependent to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;
  • a payment, not to exceed $7,500 on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent; and
  • a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

D&C Sect. 283:

283. Aggregate individual bankruptcy exemption for certain annuities and personal property.

  • General application. The aggregate amount the debtor may exempt from the property of the estate for personal property exempt from application to the satisfaction of a money judgment under CPLR 5205(a) and for benefits, rights, privileges, and options of annuity contracts described in the following sentence shall not exceed $10,000. Annuity contracts subject to the foregoing limitation are those that are:
  • initially purchased by the debtor within six months of the debtor's filing a petition in bankruptcy,
  • not described in any paragraph of 805(d) of the Internal Revenue Code of 1954, and
  • not purchased by application of proceeds under settlement options of annuity contracts purchased more than six months before the debtor's filing a petition in bankruptcy or under settlement options of life insurance policies.
  • Contingent alternative bankruptcy exemption. Notwithstanding 282 of this article, a debtor, who
  • does not elect, claim, or otherwise avail himself of an exemption described in CPLR 5206;
  • utilizes to the fullest extent permitted by law as applied to said debtor's property, the exemptions referred to in subdivision one of this section which are subject to the $10,000 aggregate limit; and
  • does not reach such aggregate limit, may exempt cash in the amount by which $10,000 exceeds the aggregate of his or her exemptions referred to in subdivision one of this section or in the amount of $5,000, whichever amount is less. For purposes of this subdivision, cash means currency of the United States at face value, savings bonds of the United States at face value, the right to receive a refund of federal, state and local income taxes, and deposit accounts in any state or federally chartered depository institution.

D&C Sect. 284:

Exclusivity of exemptions. In accordance with the provisions of 11 USC 522(b), debtors domiciled in this state are not authorized to exempt from the estate property that is specified under subsection (d) of such section.

D&C Sect. 285:

Alternative federal exemptions. Notwithstanding any inconsistent provision of law, an individual debtor may opt to exempt from property of the estate such property as is permitted to be exempted pursuant to 11 USC 522 in lieu of such property as is permitted to be exempted pursuant to the applicable provisions of this article.

CPLR 5205:

5205. Personal property exempt from application to the satisfaction of money judgments.

  • Exemption for personal property. The following personal property when owned by any person is exempt from application to the satisfaction of a money judgment except where the judgment is for the purchase price of the exempt property or was recovered by a domestic, laboring person or mechanic for work performed by that person in such capacity:
  • all stoves and home heating equipment kept for use in the judgment debtor's dwelling house and necessary fuel therefor for one hundred twenty days; one sewing machine with its appurtenances;
  • Religious texts, family pictures and portraits, and school books used by the judgment debtor or in the family; and other books, not exceeding five hundred dollars in value, kept and used as part of the family or judgment debtor's library;
  • a seat or pew occupied by the judgment debtor or the family in a place of public worship;
  • domestic animals with the necessary food for those animals for one hundred twenty days, provided that the total value of such animals and food does not exceed one thousand dollars; all necessary food actually provided for the use of the judgment debtor or his family for one hundred twenty days;
  • all wearing apparel, household furniture, one mechanical, gas or electric refrigerator, one radio receiver, one television set, one computer and associated equipment, one cellphone crockery, tableware and cooking utensils necessary for the judgment debtor and the family; all prescribed health aids,
  • a wedding ring; a watch, jewelry and art not exceeding one thousand dollars in value;
  • Tools of trade, necessary working tools and implements, including those of a mechanic, farm machinery, team, professional instruments, furniture and library, not exceeding three thousand dollars in value, together with the necessary food for the team for one hundred twenty days, provided, however, that the articles specified in this paragraph are necessary to the carrying on of the judgment debtor's profession or calling,
  • One motor vehicle not exceeding four thousand dollars in value above liens and encumbrances of the debtor; if such vehicle has been equipped for use by a disabled debtor, then ten thousand dollars in value above liens and encumbrances of the debtor; provided, however, that this exemption for one motor vehicle shall not apply if the debt enforced is for child support, spousal support, maintenance, alimony or equitable distribution; and
  • If no homestead exemption is claimed, then one thousand dollars in personal property, bank account or cash.
  • Exemption of cause of action and damages for taking or injuring exempt personal property. A cause of action, to recover damages for taking or injuring personal property exempt from application to the satisfaction of a money judgment, is exempt from application to the satisfaction of a money judgment. A money judgment and its proceeds arising out of such a cause of action is exempt, for one year after the collection thereof, from application to the satisfaction of a money judgment.
  • Trust exemption.
  • Except as provided in paragraphs four and five of this subdivision, all property while held in trust for a judgment debtor, where the trust has been created by, or the fund so held in trust has proceeded from, a person other than the judgment debtor, is exempt from application to the satisfaction of a money judgment.
  • For purposes of this subdivision, all trusts, custodial accounts, annuities, insurance contracts, monies, assets or interests established as part of, and all payments from, either any trust or plan, which is qualified as an individual retirement account under 408 or 408A of the United States Internal Revenue Code of 1986, as amended, a Keogh (HR-10), retirement or other plan established by a corporation, which is qualified under 401 of the United States Internal Revenue Code of 1986, as amended, or created as a result of rollovers from such plans pursuant to 402 (a) (5), 403 (a) (4), 408 (d) (3) or 408A of the Internal Revenue Code of 1986, as amended, or a plan that satisfies the requirements of 457 of the Internal Revenue Code of 1986, as amended, shall be considered a trust which has been created by or which has proceeded from a person other than the judgment debtor, even though such judgment debtor is
  • in the case of an individual retirement account plan, an individual who is the settlor of and depositor to such account plan, or
  • a self-employed individual, or
  • a partner of the entity sponsoring the Keogh (HR-10) plan, or
  • a shareholder of the corporation sponsoring the retirement or other plan or
  • a participant in a 457 plan.
  • All trusts, custodial accounts, annuities, insurance contracts, monies, assets, or interests described in paragraph two of this subdivision shall be conclusively presumed to be spendthrift trusts under this section and the common law of the state of New York for all purposes, including, but not limited to, all cases arising under or related to a case arising under one hundred one to thirteen hundred thirty of title eleven of the United States Bankruptcy Code, as amended.
  • This subdivision shall not impair any rights an individual has under a qualified domestic relations order as that term is defined in 414(p) of the United States Internal Revenue Code of 1986, as amended or under any order of support, alimony or maintenance of any court of competent jurisdiction to enforce arrears/past due support whether or not such arrears/past due support have been reduced to a money judgment.
  • Additions to an asset described in paragraph two of this subdivision shall not be exempt from application to the satisfaction of a money judgment if
  • made after the date that is ninety days before the interposition of the claim on which such judgment was entered, or
  • deemed to be fraudulent conveyances under article ten of the debtor and creditor law.

(d) Income exemptions. The following personal property is exempt from application to the satisfaction of a money judgment, except such part as a court determines to be unnecessary for the reasonable requirements of the judgment debtor and his dependents:

  • ninety per cent of the income or other payments from a trust the principal of which is exempt under subdivision (c); provided, however, that with respect to any income or payments made from trusts, custodial accounts, annuities, insurance contracts, monies, assets or interest established as part of an individual retirement account plan or as part of a Keogh (HR-10), retirement or other plan described in paragraph two of subdivision (c) of this section, the exception in this subdivision for such part as a court determines to be unnecessary for the reasonable requirements of the judgment debtor and his dependents shall not apply, and the ninety percent exclusion of this paragraph shall become a one hundred percent exclusion;
  • ninety per cent of the earnings of the judgment debtor for his personal services rendered within sixty days before, and at any time after, an income execution is delivered to the sheriff or a motion is made to secure the application of the judgment debtor's earnings to the satisfaction of the judgment; and
  • payments pursuant to an award in a matrimonial action, for the support of a wife, where the wife is the judgment debtor, or for the support of a child, where the child is the judgment debtor; where the award was made by a court of the state, determination of the extent to which it is unnecessary shall be made by that court.
  • Exemptions to members of armed forces. The pay and bounty of a non-commissioned officer, musician or private in the armed forces of the United States or the state of New York; a land warrant, pension or other reward granted by the United States, or by a state, for services in the armed forces; a sword, horse, medal, emblem or device of any kind presented as a testimonial for services rendered in the armed forces of the United States or a state; and the uniform, arms and equipments which were used by a person in the service, are exempt from application to the satisfaction of a money judgment; provided, however, that the provisions of this subdivision shall not apply to the satisfaction of any order or money judgment for the support of a person's child, spouse, or former spouse.
  • Exemption for unpaid milk proceeds. Ninety per cent of any money or debt due or to become due to the judgment debtor for the sale of milk produced on a farm operated by him and delivered for his account to a milk dealer licensed pursuant to article twenty-one of the agriculture and markets law is exempt from application to the satisfaction of a money judgment.
  • Security deposit exemption. Money deposited as security for the rental of real property to be used as the residence of the judgment debtor or the judgment debtor's family; and money deposited as security with a gas, electric, water, steam, telegraph or telephone corporation, or a municipality rendering equivalent utility services, for services to judgment debtor's residence or the residence of judgment debtor's family, are exempt from application to the satisfaction of a money judgment.
  • The following personal property is exempt from application to the satisfaction of money judgment,
  • except such part as a court determines to be unnecessary for the reasonable requirements of the judgment debtor and his dependents:
  • any and all medical and dental accessions to the human body and all personal property or equipment that is necessary or proper to maintain or assist in sustaining or maintaining one or more major life activities or is utilized to provide mobility for a person with a permanent disability; and any guide dog, service dog or hearing dog, as those terms are defined in one hundred eight of the agriculture and markets law, or any animal trained to aid or assist a person with a permanent disability and actually being so used by such person, together with any and all food or feed for any such dog or other animal.
  • Exemption for life insurance policies. The right of a judgment debtor to accelerate payment of part or all of the death benefit or special surrender value under a life insurance policy, as authorized by paragraph one of subsection (a) of one thousand one hundred thirteen of the insurance law[*see below], or to enter into a viatical settlement pursuant to the provisions of article seventy-eight of the insurance law, is exempt from application to the satisfaction of a money judgment.
  • Exemption for New York state college choice tuition savings program trust fund payment monies. Monies in an account created pursuant to article fourteen-A of the education law are exempt from application to the satisfaction of a money judgment as follows:
  • one hundred percent of monies in an account established in connection with a scholarship program established pursuant to such article is exempt;
  • one hundred percent of monies in an account is exempt where the judgment debtor is the account owner and designated beneficiary of such account and is a minor; and
  • an amount not exceeding ten thousand dollars in an account, or in the aggregate for more than one account, is exempt where the judgment debtor is the account owner of such account or accounts. For purposes of this subdivision, the terms "account owner" and "designated beneficiary" shall have the meanings ascribed to them in article fourteen-A of the education law.
  • Notwithstanding any other provision of law to the contrary, where the judgment involves funds of a convicted person as defined in paragraph (c) of subdivision one of six hundred thirty-two-a of the executive law, and all or a portion of such funds represent compensatory damages awarded by judgment to a convicted person in a separate action, a judgment obtained pursuant to such six hundred thirty-two-a shall not be subject to execution or enforcement against the first ten percent of the portion of such funds that represents compensatory damages in the convicted person's action; provided, however, that this exemption from execution or enforcement shall not apply to judgments obtained by a convicted person prior to the effective date of the chapter of the laws of two thousand one which added this sentence or to any amendment to such judgment where such amendment was obtained on or after the effective date of this subdivision. For the purpose of determining the amount of a judgment which is not subject to execution or enforcement pursuant to this subdivision:
  • the court shall deduct attorney's fees from that portion of the judgment that represents compensatory damages and multiply the remainder of compensatory damages by ten percent; and
  • when the judgment includes compensatory and punitive damages, attorney's fees shall be pro rated among compensatory and punitive damages in the same proportion that all attorney's fees bear to all damages recovered.
  • Exemption of banking institution accounts into which statutorily exempt payments are made electronically or by direct deposit.
  • If direct deposit or electronic payments reasonably identifiable as statutorily exempt payments were made to the judgment debtor's account in any banking institution during the forty-five day period preceding the date a restraining notice was served on the banking institution or an execution was served upon the banking institution by a marshal or sheriff, then two thousand five hundred dollars in the judgment debtor's account is exempt from application to the satisfaction of a money judgment.
  • Nothing in this subdivision shall be construed to limit a creditor's rights under 42 U.S.C. 659 or 38 U.S.C. 5301. Nothing in this subdivision shall alter the exempt status of funds that are protected from execution, levy, attachment, garnishment or other legal process, pursuant to this section or under any other provision of state or federal law, or shall affect the right of a judgment debtor to claim such exemption.
  • 2. For purposes of this article, "statutorily exempt payments" means any personal property exempt from application to the satisfaction of a money judgment under any provision of state or federal law. Such term shall include, but not be limited to, payments from any of the following sources:
  • social security,
  • including retirement,
  • survivors' and disability benefits,
  • supplemental security income
  • or child support payments processed and received pursuant to title IV-D of the Social Security Act;
  • veterans administration benefits;
  • public assistance;
  • workers' compensation;
  • unemployment insurance;
  • public or private pensions;
  • railroad retirement;
  • and black lung benefits.
  • Nothing in subdivision (l) of this section limits the judgment debtor's exemption rights in this section or under any other law.
  • Notwithstanding any other provision of law to the contrary, the term "banking institution" when used in this article shall mean and include all banks, trust companies, savings banks, savings and loan associations, credit unions, foreign banking corporations incorporated, chartered, organized or licensed under the laws of this state, foreign banking corporations maintaining a branch in this state, and nationally chartered banks.
  • The provisions of subdivisions (l), (m) and (n) of this section do not apply when the state of New York, or any of its agencies or municipal corporations is the judgment creditor, or if the debt enforced is for child support, spousal support, maintenance or alimony, provided that the restraining notice or execution contains a legend at the top thereof, above the caption, in sixteen point bold type with the following language: "The judgment creditor is the state of New York, or any of its agencies or municipal corporations, AND/OR the debt enforced is for child support, spousal support, maintenance or alimony.".

CPLR Sect. 5206:

5206. Real property exempt from application to the satisfaction of money judgments.

  • Exemption of homestead. Property of one of the following types, not exceeding one hundred fifty thousand dollars for the counties of Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and Putnam; one hundred twenty-five thousand dollars for the counties of Dutchess, Albany, Columbia, Orange, Saratoga and Ulster; and seventy-five thousand dollars for the remaining counties of the state in value above liens and encumbrances, owned and occupied as a principal residence, is exempt from application to the satisfaction of a money judgment, unless the judgment was recovered wholly for the purchase price thereof:
  • a lot of land with a dwelling thereon,
  • shares of stock in a cooperative apartment corporation,
  • units of a condominium apartment, or
  • a mobile home. But no exempt homestead shall be exempt from taxation or from sale for non-payment of taxes or assessments.
  • Homestead exemption after owner's death. The homestead exemption continues after the death of the person in whose favor the property was exempted for the benefit of the surviving spouse and surviving children until the majority of the youngest surviving child and until the death of the surviving spouse.
  • Suspension of occupation as affecting homestead. The homestead exemption ceases if the property ceases to be occupied as a residence by a person for whose benefit it may so continue, except where the suspension of occupation is for a period not exceeding one year, and occurs in consequence of injury to, or destruction of, the dwelling house upon the premises.
  • Exemption of homestead exceeding one hundred fifty thousand dollars in value for the counties of Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and Putnam; one hundred twenty-five thousand dollars for the counties of Dutchess, Albany, Columbia, Orange, Saratoga and Ulster; and seventy-five thousand dollars for the remaining counties of the state. The exemption of a homestead is not void because the value of the property exceeds one hundred fifty thousand dollars for the counties of Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and Putnam; one hundred twenty-five thousand dollars for the counties of Dutchess, Albany, Columbia, Orange, Saratoga and Ulster; and seventy-five thousand dollars for the remaining counties of the state but the lien of a judgment attach-es to the surplus.
  • Sale of homestead exceeding one hundred fifty thousand dollars for the counties of Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and Putnam; one hundred twenty-five thousand dollars for the counties of Dutchess, Albany, Columbia, Orange, Saratoga and Ulster; and seventy-five thousand dollars for the remaining counties of the state in value.

    A judgment creditor may commence a special proceeding in the county in which the homestead is located against the judgment debtor for the sale, by a sheriff or receiver, of a homestead exceeding one hundred fifty thousand dollars for the counties of Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and Putnam; one hundred twenty-five thousand dollars for the counties of Dutchess, Albany, Columbia, Orange, Saratoga and Ulster; and seventy-five thousand dollars for the remaining counties of the state in value.

    The court may direct that the notice of petition be served upon any other person.

    The court, if it directs such a sale, shall so marshal the proceeds of the sale that the right and interest of each person in the proceeds shall correspond as nearly as may be to his right and interest in the property sold.

    Money, not exceeding one hundred fifty thousand dollars for the counties of Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester and Putnam; one hundred twenty-five thousand dollars for the counties of Dutchess, Albany, Columbia, Orange, Saratoga and Ulster; and seventy-five thousand dollars for the remaining counties of the state, paid to a judgment debtor, as representing his interest in the proceeds, is exempt for one year after the payment, unless, before the expiration of the year, he acquires an exempt homestead, in which case, the exemption ceases with respect to so much of the money as was not expended for the purchase of that property; and the exemption of the property so acquired extends to every debt against which the property sold was exempt.

    Where the exemption of property sold as prescribed in this subdivision has been continued after the judgment debtor's death, or where he dies after the sale and before payment to him of his portion of the proceeds of the sale, the court may direct that portion of the proceeds which represents his interest be invested for the benefit of the person or persons entitled to the benefit of the exemption, or be otherwise disposed of as justice requires.
  • Exemption of burying ground. Land, set apart as a family or private burying ground, is exempt from application to the satisfaction of a money judgment, upon the following conditions only:
  • a portion of it must have been actually used for that purpose;
  • it must not exceed in extent one-fourth of an acre; and
  • it must not contain any building or structure, except one or more vaults or other places of deposit for the dead, or mortuary monuments.

CPLR Sect. 5253:

5253. Cost of living adjustment for personal and real property exempt from application to the satisfaction of money judgments and exemptions in bankruptcy.

  • Beginning on April first, two thousand twelve, and at each three-year interval ending on April first thereafter, the dollar amount of the exemption provided in 5205 and 5206 of this article and 282 and 283 of the Debtor and Creditor Law

    shall be adjusted as provided in subdivision (B) of this section.
  • The superintendent of banks shall determine the amount of the adjustment based on the change in the consumer price index for all urban consumers, New York - Northern New Jersey - Long Island, NY-NJ-CT-PA, published by the U.S. Department of Labor, Bureau of Labor Statistics, for the most recent three-year period ending on December thirty-first preceding the adjustment, with each adjusted amount rounded to the nearest twenty-five dollars.
  • Beginning on April first, two thousand twelve, and at each three-year interval ending on April first thereafter, the superintendent of banks shall publish the current dollar amount of the applicable exemption provided in this article, together with the date of the next scheduled adjustment.
    The publication shall be substantially in the form set forth below:

    "Current dollar amount of exemption from application to the satisfaction of money judgments under New York Civil Practice Law and Rules 5205 and 5206 and exemptions in bankruptcy under Debtor and Creditor Law 282 and 283:

    The following is the current dollar amount of exemptions from the satisfaction of money judgments under Civil Practice Law and Rules 5205 and 5206 and under Debtor and Creditor Law 282 and 283: (Amount) this amount is effective on April 1, (year) and shall not apply to cases commenced before April 1, (year). The next adjustment is scheduled for April 1, (year). Such adjustments shall not apply with respect to restraining notices served or executions effected before the date of the adjustment. Nothing in this section limits the judgment debtor's exemption rights in this section or under any other law."

    Insurance Law 1113(a)(1): "Life Insurance," means every insurance upon the lives of human beings, and every insurance appertaining thereto, including the granting of endowment benefits, additional benefits in the event of death by accident, additional benefits to safeguard the contract from lapse, accelerated payments of part or all of the death benefit or a special surrender value upon
  • diagnosis of terminal illness defined as a life expectancy of twelve months or less,
  • diagnosis of a medical condition requiring extraordinary medical care or treatment regardless of life expectancy,
  • certification by a licensed health care practitioner of any condition which requires continuous care for the remainder of the insured's life in an eligible facility or at home when the insured is chronically ill as defined by 7702(B) of the Internal Revenue Code and regulations thereunder, provided the accelerated payments qualify under 101(g)(3) of the Internal Revenue Code and all other applicable sections of federal law in order to maintain favorable tax treatment, or
  • certification by a licensed health care practitioner that the insured is chronically ill as defined by 7702 (B) of the Internal Revenue Code and regulations thereunder, provided the accelerated payments qualify under 101(g)(3) of the Internal Revenue Code and all other applicable sections of federal law in order to maintain favorable tax treatment and the insurer that issues such policy is a qualified long term care insurance carrier under 4980c of the Internal Revenue Code or provide a special surrender value, upon total and permanent disability of the insured, and optional modes of settlement of proceeds. "Life insurance" also includes additional benefits to safeguard the contract against lapse in the event of unemployment of the insured or in the event the insured is a resident of a nursing home. Amounts paid the insurer for life insurance and proceeds applied under optional modes of settlement or under dividend options may be allocated by the insurer to one or more separate accounts pursuant to four thousand two hundred forty of this chapter.

Insurance Law 3212:

3212. Exemption of proceeds and avails of certain insurance and annuity contracts.

  • In this section:
  • The term "proceeds and avails", in reference to policies of life insurance, includes death benefits, accelerated payments of the death benefit or accelerated payment of a special surrender value, cash surrender and loan values, premiums waived, and dividends, whether used in reduction of premiums or in whatever manner used or applied, except where the debtor has, after issuance of the policy, elected to receive the dividends in cash.
  • An annuity contract includes any obligation to pay certain sums at stated times, during life or lives, or for a specified term or terms, issued for a valuable consideration, regardless of whether such sums are payable to one or more persons, jointly or otherwise, but does not include payments under a life insurance policy at stated times during life or lives, or for a specified term or terms.
  • The term "creditor" includes every claimant under a legal obligation contracted or incurred after December thirty-first, nineteen hundred thirty-nine.
  • The term "execution" includes execution by garnishee process and every action, proceeding or process whereby assets of a debtor may be subjected to the claims of creditors.
  • If a policy of insurance has been or shall be effected by any person on his own life in favor of a third person beneficiary, or made payable otherwise to a third person, such third person shall be entitled to the proceeds and avails of such policy as against the creditors, personal representatives, trustees in bankruptcy and receivers in state and federal courts of the person effecting the insurance.
  • If a policy of insurance has been or shall be effected upon the life of another person in favor of the person effecting the same or made payable otherwise to such person, the latter shall be entitled to the proceeds and avails of such policy as against the creditors, personal representatives, trustees in bankruptcy and receivers in state and federal courts of the person insured. If the person effecting such insurance shall be the spouse of the insured, he or she shall be entitled to the proceeds and avails of such policy as against his or her own creditors, trustees in bankruptcy and receivers in state and federal courts.
  • If a policy of insurance has been or shall be effected by any person on the life of another person in favor of a third person beneficiary, or made payable otherwise to a third person, such third person shall be entitled to the proceeds and avails of such policy as against the creditors, personal representatives, trustees in bankruptcy and receivers in state and federal courts of the person insured and of the person effecting the insurance.
  • The person insured pursuant to paragraph one of this subsection or the person effecting the insurance other than the spouse of the insured pursuant to paragraph two hereof, and the person effecting the insurance pursuant to paragraph three hereof, or the executor or administrator of any such persons, or a person entitled to the proceeds or avails of such policy in trust for such persons shall not be deemed a third person beneficiary, assignee or payee.
  • A policy shall be deemed payable to a third person beneficiary if and to the extent that a facility-of-payment clause or similar clause in the policy permits the insurer to discharge its obligation after the death of the person insured by paying the death benefits to a third person.
  • This section shall be applicable whether or not the right is reserved in any such policy to change the designated beneficiary and whether or not the policy is made payable to the person whose life is insured if the beneficiary, assignee or payee shall predecease such person; and no person shall be compelled to exercise any rights, powers, options or privileges under such policy.
  • If a policy of insurance has been or shall be effected by any person on his own life or upon the life of another person, the policyowner shall be entitled to any accelerated payments of the death benefit or accelerated payment of a special surrender value permitted under such policy as against the creditors, personal representatives, trustees in bankruptcy and receivers in state and federal courts of the policyowner.
  • No money or other benefits payable or allowable under any policy of insurance against disability arising from accidental injury or bodily infirmity or ailment of the person insured, shall be liable to execution for the purpose of satisfying any debt or liability of the insured, whether incurred before or after the commencement of the disability, except as provided in subsection (e) hereof.
  • With respect to debts or liabilities incurred for necessaries furnished the insured after the commencement of disability, the exemption shall not include any income payment benefits payable as a result of any disability of the insured, and with respect to all other debts or liabilities incurred after the commencement of disability of the insured, the exemption of income payment benefits payable as a result of any disability of the insured shall not at any time exceed payment at a rate of four hundred dollars per month for the period of such disability.
  • When a policy provides for lump sum payment because of a dismemberment or other specific loss of insured, such payment shall be exempt from execution of insured's creditors.
  • This subsection shall not affect the assignability of any benefit otherwise assignable.
  • The benefits, rights, privileges and options which, under any annuity contract are due or prospectively due the annuitant, who paid the consideration for the annuity contract, shall not be subject to execution.
  • The annuitant shall not be compelled to exercise any such rights, powers or options contained in the annuity contract, nor shall creditors be allowed to interfere with or terminate the contract, except as provided in subsection (e) hereof and except that the court may order the annuitant to pay to a judgment creditor or apply on the judgment in installments, a portion of such benefits that appears just and proper to the court, with due regard for the reasonable requirements of the judgment debtor and his family, if dependent upon him, as well as any payments required to be made by the annuitant to other creditors under prior court orders.
  • The benefits, rights, privileges or options accruing under such contract to a beneficiary or assignee shall not be transferable nor subject to commutation. If the benefits are payable periodically or at stated times, the same exemptions and exceptions contained herein for the annuitant shall apply with respect to such beneficiary or assignee.
  • The benefits, rights, privileges or options accruing under an annuity contract funding a structured settlement which would otherwise be nontransferable under this subsection may be transferred in accordance with title seventeen of article five of the general obligations law. As used in this paragraph the term "structured settlement" means an arrangement for periodic payments of damages for personal injuries established by settlement or judgment in resolution of a tort claim; and the term "periodic payments" shall include scheduled future lump sum payments.
  • Every assignment or change of beneficiary or other transfer is valid, except in cases of transfer with actual intent to hinder, delay or defraud creditors, as defined by article ten of the debtor and creditor law. In such cases creditors shall have all the remedies provided by such article ten.
  • Subject to the statute of limitations, the amount of premiums or other consideration paid with actual intent to defraud creditors as provided in article ten of the debtor and creditor law, together with interest on such amount, shall enure to the benefit of creditors from the proceeds of the policy or contract; but the insurer issuing such policy or contract shall be discharged of liability thereunder by making payments in accordance with its terms, or in accordance with any assignment, change of beneficiary or other transfer, unless before any such payment such insurer shall have received written notices, by or on behalf of any such creditor, of a claim to recover any benefits on the ground of a transfer or payment made with intent to defraud such creditor.
  • The notice shall specify the amount claimed or sufficient facts to enable the insurer to ascertain such amount, the insurance or annuity contract, the person insured or annuitant, and the transfers or payments sought to be avoided on the ground of fraud.
  • Notwithstanding any inconsistent provision of this section or other law, any right of subrogation to benefits to which a local social services district, the department of social services, or the commissioner of health or his designee, shall be entitled shall be valid and enforceable to the extent benefits are available under any individual accident and health insurance, group or blanket accident and health insurance, or noncancellable disability insurance policy, or any subscriber contract made by a corporation subject to the provisions of article forty-three of this chapter, except that no such right of subrogation shall be enforceable if such benefits may be claimed by the department of social services, an appropriate social services official or the commissioner of health or his designee, by agreement or other established procedure, directly from an insurance carrier.
  • The right of subrogation does not attach to insurance benefits paid or provided under any health insurance policy prior to the receipt by the carrier issuing such insurance of written notice from the department of social services, a local social services district, or the commissioner of health or his designee, of the exercise of subrogation rights.
  • No right of subrogation to insurance benefits available under any health insurance policy shall be enforceable unless written notice of the exercise of such subrogation right is received by the carrier within two years from the date services for which benefits are provided under the policy or contract are rendered.
  • No terms of any policy or contract which directly or indirectly prevent or prohibit the assignment of rights under any policy or contract prevent a local social services district, the department of social services, or the commissioner of health or his designee, from claiming benefits to which it shall be subrogated. The right of subrogation attach-es to any benefits paid or provided under any policy, plan or contract upon receipt of written notice of the exercise of such subrogation rights.
  • This section shall likewise apply to group insurance policies or annuity contracts, to the certificates or contracts of fraternal benefit societies, and to the policies or contracts of cooperative life and accident insurance companies.