Tuesday Tips, a series of articles from local experts to help you save money, make better decisions and plan for a better future.
For everyone scared to file for bankruptcy because you own a home or a car and would like to keep it, finally, the government has some good news for you.
Under a new law that is just a short time away from reaching the governor’s desk, you can now file a Chapter 7 Bankruptcy in Sheepshead Bay and elsewhere in New York while keeping your home if it has under $300,000 in equity. Under the old law, the exemption limit for a house was $50,000 in equity for a single filer, and $100,000 for joint filers.
That means if you’re home on Avenue Y was worth $450,000 and your mortgage was $325,000, the Trustee in a bankruptcy house could take your house and sell it to pay off creditors. Under the new proposed limits, the exemption for a single filer would be increased to $150,000 for a single filer and $300,000 for joint filers. That, my friends, is huge.
Take, for example, a Sheepshead Bay condo or house with a $300,000 mortgage. Your home could be worth up to $600,000 and, if you file, the Trustee is not allowed to take your home.
Additionally, the exemption for equity in a vehicle will rise from its current exemption of $2,400 to $4,000. Again, while that may not seem like a ton, most vehicles do not have over $4,000 in equity in them.
Lastly, and perhaps most importantly, when you file for bankruptcy in New York, you’ll now be able to chose between the New York laws surrounding bankruptcy or the federal exemption limits. New York previously did not allow you to make this choice.
Practically speaking, this helps those without a home more than anything else, because there is a “wild card” exemption under federal rules. In English, that means that if you have some cash, but no home, chances are you’ll get to keep the cash under the federal exemption laws (of course, each case is different). I’m very excited about this, as you all should be. Once we hear more news, we’ll absolutely pass it along to you.
Daniel Gershburg Esq., is a real estate and bankruptcy attorney with offices in Sheepshead Bay and Manhattan. The practice was specifically set up to change the way people view attorneys, by incorporating radical ideas like calling people back quickly, returning emails, giving clients ’round the clock access to their cases and charging low fees. For more information please visit Brooklyn Real Estate Attorney Daniel Gershburg‘s website.