New York Bankruptcy Laws Regarding Homestead Exemptions
Civil Practice Law & Rules Section 5206 provides certain real property is exempt from application to the
satisfaction of money judgments. Property of one of the following types, not exceeding ten thousand dollars
in value above liens and encumbrances, owned and occupied as a principal residence, is exempt from application to
the satisfaction of a money judgment, unless the judgment was recovered wholly for the purchase price in connection
with 1) a lot of land with a dwelling, 2) shares of stock in a cooperative apartment corporation, 3) units of a
condominium apartment, or 4) a mobile home. No exempt homestead shall be exempt from taxation or from sale for
non-payment of taxes or assessments. If value exceeds ten thousand dollars, the lien of a judgment
attaches to the surplus. Compare New York bankruptcy laws to the federal statute provided
by 11 U.S.C. 522 which allows $16,500 for home values.
Operation of New York Bankruptcy Laws
Value is determined based upon the fair market price, less amounts owed. "Fair market" is not a retail value
expected by professional sellers or advertisers. Likewise, forced liquidation values are not representative of a
fair market. The value of property in New York bankruptcy proceedings is an estimate of an agreement reached
between a willing buyer and a willing seller under current market conditions. Creditors may file objections to
the calculation of equity which may be subject to disbursement.
In recent years, it seems many New York bankruptcy laws
and traditions have been under strict scrutiny. In general, the trend is
to limit individual rights while expanding the rights of corporations
who file Ch. 11. In NY State, approximately 98% of all cases are filed
for individuals under Chapter 7 & 13, while Ch. 11 cases account for
approximately 2% of all cases.
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