What Property Is Protected From Bankruptcy?
Last updated on December 18, 2025
How to protect assets in bankruptcy from being liquidated to pay creditors
Bankruptcy petitioners, particularly those filing for Chapter 7 relief, know that their assets may be liquidated to pay debts to creditors. So it is natural that they want to know what assets are exempt in bankruptcy liquidation.
Prior to 2011, bankruptcy petitioners in New York had limited assets protected in bankruptcy under New York State bankruptcy statutes. However the law was changed in 2011 in two significant ways:
- The values of exempt assets were increased under New York statutes.
- Bankruptcy petitioners could alternatively choose to exempt assets under the federal Bankruptcy Code.
A petitioner can choose one set or the other set, but cannot pick and choose from both sets of exempt assets.
Exempt Assets: Bankruptcy Under New York Statutes
Here is partial list of the most common assets that are exempt under New York bankruptcy statutes:
- $204,824 of homestead (the home you reside in) real estate equity or $300,000 for married couples filing jointly, who jointly own the real estate. This amount applies to the downstate counties in and around New Your City and Long Island; amounts are lower in upstate counties.
- $1,325 for a cash exemption if the homestead exemption is taken
- $5,500 for a motor vehicle
- $4,075 for tools of trade
- $1,325 for a watch, jewelry and artwork
- $8,275 payment for personal injury action
What Assets Are Protected In Bankruptcy Under The Federal Bankruptcy Code?
By comparison, here is partial list of the most common assets that are exempt under the federal Bankruptcy Code:
- $31,375 of homestead real estate equity.
- $5,025 for a motor vehicle
- $2,125 for jewelry
- $11,525 total value ($550 per individual item) for household goods, furnishings and appliances, clothes, books, animals, crops or musical instruments
- $3,175 for tools of trade
- Wildcard exemption for $1,675, plus up to $15,800 of any unused portion of the homestead exemption to exempt any type of property.
Let An Experienced New York Bankruptcy Attorney Help You File For Bankruptcy
If you live in New York City and think bankruptcy may be a viable option for you, contact the Law Office of Gregory Messer online or at 347-943-8475 to schedule a free initial consultation. Our office is located across the street from the U.S. District Bankruptcy Court in Brooklyn and is close to the Borough Hall and Court Street subway stations. We serve residents throughout New York City and Long Island.
To ensure every client’s filing receives the attention it deserves, we are an appointment-only law firm with flexible hours adjustable to fit your needs.