Protecting Your Financial Future: How Long Island’s Wild Card Exemption Could Save Your Assets When Filing Bankruptcy in 2024
When facing overwhelming debt on Long Island, many residents worry they’ll lose everything if they file for bankruptcy. However, New York’s bankruptcy exemption laws, particularly the powerful wild card exemption, offer significant protection for your assets. Understanding these exemptions could mean the difference between losing your savings and keeping the resources you need for a fresh financial start.
Understanding New York’s Dual Exemption System
New York is unique among states because residents filing Chapter 7 bankruptcy can choose between federal bankruptcy exemptions or the state’s exemptions. You have to choose one or the other, though. You can’t use both. This choice gives Long Island residents a strategic advantage when protecting their assets.
If you live in Queens, Kings, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, or Putnam counties, you can exempt up to $204,825 of equity in your home under New York state exemptions. For Long Island residents specifically, this generous homestead exemption often makes the state exemption system the better choice for homeowners with significant equity.
The Power of the Federal Wild Card Exemption
However, for many Long Island residents, the federal exemption system offers a game-changing advantage: the federal wildcard exemption is $1,675 plus $15,800 of any unused portion of your homestead exemption and can be used to exempt any property of your choosing. For debtors that do not need to use the homestead exemption (either because they do not own a home or there is no equity in the home), the wildcard allows an exemption of up to $15,425 in any property, including cash, bank accounts and tax refunds not yet received.
This includes cash, money in a bank account or from a tax refund, equity in a car that goes beyond the standard exemption, an interest in a second property (which would not be covered by the homestead exemption), an interest in a second vehicle (or vehicles), an interest in a personal injury lawsuit (or any other lawsuit), jewelry, stocks or bonds, an inheritance, lottery winnings, or even comic books, baseball cards, or merchandise for an eBay business.
Strategic Considerations for Long Island Residents
Since 2011, when New York opted to allow use of the federal exemptions, most New Yorkers filing for bankruptcy choose the federal exemptions (with its wildcard exemption) except for those debtors who need to use New York State’s more generous homestead exemption to protect their primary residence. This strategic choice is particularly relevant for Long Island residents who may own homes but have limited equity, or who have significant non-real estate assets to protect.
For example, if a debtor has $3,000 in the bank and a pending $11,000 tax refund, they can protect both and have $1,425 in a remaining wildcard exemption to apply to another asset or assets. The wildcard exemption should permit most Long Island debtors to keep all of their assets in a typical Chapter 7 case. Previously, assets such as cars, bank accounts, personal injury causes of action, and tax refunds were at times difficult to fully protect for some clients.
Recent Updates to Exemption Amounts
Starting April 1, 2025, individuals filing for bankruptcy in states that allow the use of federal bankruptcy exemptions, including New York, will benefit from higher exemption limits. These changes are part of the routine inflation-based adjustment required every three years under the Bankruptcy Code. New York’s exemption amounts adjust every three years, and the amounts in this article reflect the April 1, 2024, adjustment.
Expert Legal Guidance for Long Island Residents
Navigating bankruptcy exemptions requires careful analysis of your specific financial situation. The Law Offices of Ronald D. Weiss, P.C., has been serving Long Island residents since 1993, providing expert guidance on bankruptcy and debt solutions. The Law Offices of Ronald D. Weiss, PC have been supplying expert bankruptcy, foreclosure defense, and debt negotiation services since 1993. We offer practical, compassionate solutions customized to each client’s financial situation. With over 30 legal professionals on our team, we have the resources to handle your important legal matter.
When you’re considering bankruptcy, working with an experienced Bankruptcy Lawyer Long Island is essential to ensure you maximize your exemptions and protect as many assets as possible. Our law firm concentrates in bankruptcy solutions and is experienced in representing individuals and businesses in Suffolk County, Nassau County and the greater LI and NYC areas in all chapters of the bankruptcy code and in all matters that may arise in bankruptcy cases.
Making the Right Choice for Your Situation
The questions of what exemptions to use in any given case are highly fact specific. If you are contemplating filing for bankruptcy, we recommend speaking with an experienced bankruptcy lawyer to help determine what exemptions should be utilized in your case. The choice between federal and state exemptions can significantly impact what assets you’re able to keep through the bankruptcy process.
These updated exemption amounts give filers the ability to protect more of their assets in a bankruptcy case. With these higher limits, more consumers will be able to retain their property and emerge from bankruptcy with greater financial stability. For Long Island residents facing financial difficulties, understanding these protections is the first step toward making an informed decision about your financial future.
Getting initial information and advice is free. Our approach is personalized to your specific situation and goals. Don’t let fear of losing everything prevent you from exploring bankruptcy as a viable solution to overwhelming debt. With proper planning and expert legal guidance, you may be able to protect far more of your assets than you realize.
