A strict reading of the exemptions allowed debtors under the new exemption update law in New York reveals an interesting analysis: a bankruptcy debtor could claim two separate car exemptions. Whether a court will allow this interpretation is another matter.
Debtor and Creditor Law Sect. 282(i) has always allowed a bankruptcy debtor to claim “personal and real property exempt from application to the satisfaction of money judgments under CPLR §§5205”. And CPLR(a)(8) now allows a debtor to exempt $4,000 in one motor vehicle. But D&C Sect. 282(iii) gives a bankruptcy debtor a separate $4,000 car exemption. So could a bankruptcy debtor claim one car as exempt, under CPLR 5205(a)(8), via D&C 282(i), and another car under D&C 282(iii)? Or, just as interestingly, could a debtor, under the same logic, claim an $8,000 exemption in one car?
Well, why not? The construction of the statute seems to allow this double exemption. The contrary argument would be that the state legislature had no intention to create a double exemption in bankruptcy, and the legislative memorandum accompanying the bill mentions nothing along this line. This argument would be that the legislature simply intended to extend the car exemption to non-bankruptcy judgment debtors, and overlooked the unanticipated consequence that placing the money judgment exemption in CPLR 5205 accidently brought it inside the property exempted by D&C 282(I).
On the other hand, why would legislative intent come into play if there is no ambiguity in the interpretation of the text of the statute? Call that the Justice Scalia approach.
This may well be the first legal issue of the new exemption update law to be litigated in court – in bankruptcy court.