With the new exemption update law set to go into effect tomorrow (January 21), the state legislature has passed the 'chapter amendment' bill A851, which excepts the State and its municipalities from the judgment debtor motor vehicle exemption. As reported in previous blogs, New York City and other municipalities objected to the update law, fearing that it would prevent their parking violations bureaus from seizing cars to enforce parking violations. When Governor Patterson signed the update law, he expressed his reservations, and may well have vetoed it had supporters of the bill not promised to support a chapter amendment excepting the state from the car exemption.The Assembly passed A851 on Tuesday and the Senate passed it yesterday. The bill has been forwarded to the Governor for signature. As one of the supporters of the exemption update bill, I sent a letter of support for the chapter amendment to four of my local legislators (two Assembly members, two senators.) In response to the letter, the office of Senator Joseph E. Robach of Rochester called me today to inform me the bill had passed the Senate, with Senator Robach's support, which I thought was a very thoughtful thing to do, and is appreciated. This was not exactly a highly contested piece of legislation; the Assembly approved it 142-0. If signed by thge governor, the chapter amendment will have the same effective date as the exemption update law (January 21.)
If you would like to discuss publically the new exemption update law in New York State, going into effect January 21, leave a comment below. I will answer the comments to the best of my knowledge, and other readers may leave answering comments as well.
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.
Chapter amendment A851 was reported out of the Judicial Committee of the New York State Assembly this morning, without opposition or even discussion. Both Democratic and Republican members of the Committee voted in favor of the bill, which excludes New York State and its municipalities from the new judgment debtor motor vehicle exemption. New York City had advocated for the exclusion, to protect its parking tickets collection process. many bankruptcy practitioners around the state, including myself, have submitted letters in suppport of the bill. A floor vote in the Assembly is expected soon, and a similar bill, S1198 is moving through the State Senate.
As has been extensively reported in previous blogs, Governor Patterson signed the Exemption Update law despite the misgivings of New York City, which was concerned that the new motor vehicle exemption for non-bankruptcy debtors would impact their collections of parking violations. Parking Violations Bureaus in New York has statutory authority to enforce unpaid parking tickets just like money judgment (New York Vehicle & Traffic Law sect. 237(5)). In New York City, and perhaps some other municipalities, the PVB use this power to tow cars of owners with unpaid parking tickets, even if the car is legally parked (call it the 'New York yank' as opposed to the 'Denver boot.')
The new exemption update law will allow New York bankruptcy debtors the option of using the federal exemptions rather than just the state exemptions. New York 'opted out' of allowing bankruptcy debtors to use federal exemptions in 1982. By no longer opting out of the federal exemptions, New York joins twenty other states and jurisdictions that allow use of the federal exemption. Interestingly, every state adjoining New York, and every New England state other than Maine, has not opted out of the federal exemptions. Bankruptcy attorneys may want to pay close attention to case law interpreting the federal exemptions arising out of non-opt out states.
As previously reported, Bankruptcy Committee Chair Bill Neild and I will be doing a two hour CLE on the new Bankruptcy Exemption Update Law on January 18 at 2:30. You can now register for that CLE online at the Monroe County Bar Association website, at this link.
The new Exemption Update Law goes into effect 30 days after passage. There has been some question as to when that date is, but the official answer is January 21. The official legislature information service of the State of New York confirms the amendments are effective the 21st. The confusion arises because Governor Patterson's office released the news that the Governor had signed the bill on December 23, but the Governor actually signed the bill the day before, Dec. 22 (see my blog of December 28, posting the Governor's approval memorandum.)
Governor Patterson signed the bankruptcy and judgment debtor exemption update bill, A7034, on December 22 (Note: the press release for the signing was issued the next day, Dec. 23.) The law is now known as Chapter 568 of the 2010 session Laws of New York State. Below is the Governor's official approval memo #38. The governor noted in his support that an amendment to exclude New York and its municipalities from the judgment debtor car exemption should be amended in the next legislature. I also note that the approval memo misstates the new homestead exemption. It is actually $75,000, $100,000 and $150,000.
After Governor Patterson signed the new bankruptcy exemption law yesterday, news outlets from buffalo to New York City noted the impact of the statute. Jonathan Epstein, Business reporter at The Buffalo News, quoted Jeffrey Freedman, Judge Bucki and me in an article published today.