There are bankruptcy laws in both the federal United States Code as well as in the New York State Code. Each set of laws provides individuals who file for bankruptcy with exemptions that they may use to protect certain items of property from liquidation during the Chapter 7 bankruptcy process. In New York, a person has the right to choose which set of exemptions he prefers to use when engaging with personal bankruptcy in this form.
Consultation with a bankruptcy attorney is a good way for an individual who has questions about exemptions to address his concerns. This is because the state and federal bankruptcy exemptions are not identical and some individuals may be better served by using one set over the other. In order to provide oneself with the most useful tools for emerging from bankruptcy with his financial life intact, it is often helpful to speak with a professional in the bankruptcy field.
Exemptions can make or break a person’s chances of having a successful Chapter 7 bankruptcy process. During Chapter 7, an individual debtor may have to sell off items of his personal and real property in order to secure money to use to satisfy his creditors. If he fails to properly use his available exemptions he may end up selling off items he otherwise could have kept and that hold actual and intrinsic value.
Not every state allows its residents to choose which bankruptcy exemption laws they will follow. To this end, New Yorkers have some power to mold their Chapter 7 bankruptcies into processes that meet their financial needs. Readers of this post are encouraged to seek private guidance regarding their own bankruptcy exemption questions as this blog provides only general information and not legal advice.