Experienced New York City Exempt Property Attorney for Filing Bankruptcy
Many people are unaware that they can exempt some assets when filing for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code. An exemption simply means that the courts cannot consider the equity in the exempt asset when creditors seek repayment of some or all of the debt you are seeking to eliminate.
Under current laws, for example, a married couple filing for Chapter 7 bankruptcy in New York may exempt up to $300,000 in equity in their home. In other words, the courts may not force them to sell their home to use the equity to repay their creditors. By “reaffirming” to repay the monthly mortgage obligation separate from the other eliminated debts, the filer may keep the property.
People filing Chapter 7 bankruptcy may also exempt the equity they may have in their motor vehicle, up to $4,000 for an individual and $8,000 for a married couple filing joint bankruptcy. Again, by reaffirming the obligation to keep up with loan payments, the filer may retain possession of the vehicle.
New development: New York now offers filers the choice between state and federal exemptions.
Stripping Off a Second Mortgage Through a Bankruptcy Exemption
In the past several years, millions of homeowners have secured a bank loan by borrowing against the equity in their houses. Unfortunately, sinking house values mean that the owner likely has a second or third mortgage, which means the homeowners is paying significantly more for a mortgage when the house is worth significantly less.
By filing Chapter 13 bankruptcy to restructure your debts, it is possible to strip off the amount of the subsequent mortgage on your house, if the property is below the value of the original loan.
Other Bankruptcy Exemptions Can Be Taken Under Consideration
The bankruptcy judge will consider other assets you may wish to include as exemptions in your bankruptcy filing. There have been significant new developments in bankruptcy exemption laws over the past few years. If you are considering filing for bankruptcy, learn more about exemptions and how you can eliminate or restructure your debt but keep your house and car. Call the law office of Paul B. Groman, Attorney at Law, in Brooklyn to arrange a free consultation about your options. Mr. Groman is a reputable bankruptcy lawyer with years of experience helping people get a fresh start under the laws of the United States Bankruptcy Code.