Home Foreclosures

Usually when a governor leaves office all we hear about are the pardons issued during the last week of the term.  Many Tennesseans will recall that Lamar Alexander actually took the governor’s oath early to prevent a scandalous grant of additional pardons by the then sitting Governor Winfield Dunn.

However, New York’s departing Gov. David Patterson has taken the step of increasing exemptions for residents of the state.  An exemption allows a person who files bankruptcy to keep property to which the exemption applies to the extent of the exemption.  Many of the exemption statutes throughout the US have not been amended for years.  The bill increasing exemptions for New York residents had been on the governor’s desk for months.

New York residents can now exempt up to $4,000 for an automobile and up to $10,000 if it’s equipped for disabilities.  The former exemption amount was $2,400.  Homeowners get an exemption based upon where they live:  $75,000 in upstate areas like Syracuse, Rochester and Buffalo; $100,000 if you live in the Hudson Valley; and $150,000 in the New York City and Long Island areas.

Tennessee increased its exemptions in 2010 from $4,000 to $10,000 on personal property.  The Homestead Exemption is now up to $25,000 if you have a minor child at home and $12,500 if you are over 65.

These increase exemptions go a long way to giving a debtor the much sought after “fresh start” in a Chapter 7 Bankruptcy.  Additionally, they are applicable in a Chapter 13 case to determine the amount that must be paid to unsecured creditors to meet the “best interest test” for confirmation of the Chapter 13 Repayment Plan.

When a person is considering bankruptcy it’s important to consult with experienced bankruptcy attorney so you can fully understand what you can keep because of exemptions.  Some folks are surprised to find that in most Chapter 7 Bankruptcy cases they will not lose any property, primarily because of the exemptions.

Photo Credit:  Flickr: Repres