Bankruptcy in New York (2026): Exemptions & Means Test

Bankruptcy is a federal process, but what you keep depends heavily on the exemption rules of your state, and New York stands out in two ways. It is one of the minority of states that lets a filer choose between the federal bankruptcy exemptions and the state exemptions, and its homestead exemption is tiered by county, ranging from about $102,400 upstate to $204,825 in the downstate counties. This guide explains how Chapter 7 and Chapter 13 work for New York residents, the key New York exemptions, and the current Chapter 7 means-test income figures, all dated to primary sources.

This guide is part of our Bankruptcy by State series. It is general information, not legal advice, and exemption and income figures change, so confirm current amounts before relying on them.

Federal or state exemptions: New York lets you choose

The first question in any bankruptcy is which set of exemptions applies, because exemptions decide what property you keep. Under 11 U.S.C. 522(b), each state either keeps the federal exemption menu available or opts out and forces filers onto state law. New York opted out: Debtor and Creditor Law section 284 provides that debtors domiciled in New York "are not authorized to exempt from the estate property that is specified under subsection (d)" of 11 U.S.C. 522. The choice New York filers actually have comes from a separate statute. Debtor and Creditor Law section 285 provides that notwithstanding any inconsistent provision of law, an individual debtor may opt to exempt property under 11 U.S.C. 522 in lieu of the state exemptions. The practical result is the one most guides describe: a New York filer may elect either the federal exemptions in 11 U.S.C. 522(d) or the New York exemptions found in the Civil Practice Law and Rules (CPLR) and the Debtor and Creditor Law. You generally pick one full system, not a mix of both, and joint filers must use the same system. The choice matters: filers with significant home equity in a high-cost county often prefer the New York homestead, while filers who rent or have little equity sometimes do better with the federal wildcard.

The New York homestead exemption: tiered by county

New York protects a primary residence through CPLR 5206, and unusually, the amount depends on where the home is located. As adjusted effective April 1, 2024 by the New York Department of Financial Services, the homestead exemption is $204,825 for a home in the downstate counties of Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, and Putnam; $170,700 for a home in the mid-state counties of Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster; and $102,400 for a home in any of the remaining counties. The amounts are indexed and adjusted every three years, with the next scheduled adjustment on April 1, 2027. One federal limit applies regardless of state law: under 11 U.S.C. 522(p), equity in a homestead acquired within 1,215 days before filing is capped at a federally adjusted amount, so recently acquired equity may be limited.

Vehicle, personal property, and wage exemptions in New York

New York's personal-property exemptions are set mainly in CPLR 5205 and were also adjusted effective April 1, 2024. The motor-vehicle exemption is $5,500, rising to $13,625 for a vehicle equipped for use by a person with a disability; Debtor and Creditor Law section 282(1) sets the same figures for a bankruptcy filer. CPLR 5205 also protects household furniture, appliances, a wedding ring, and other listed items, plus tools of the trade up to a set limit, and most retirement accounts. A filer who does not claim the homestead may use the bankruptcy-specific cash exemption in Debtor and Creditor Law section 283(2): cash in the amount by which $13,625 exceeds the other personal-property exemptions claimed, or $6,825, whichever is less. That provision applies only in bankruptcy. The $1,325 cash figure in CPLR 5205(a)(9) is the smaller amount available to an ordinary money-judgment debtor outside bankruptcy. For wages, New York generally exempts 90 percent of earnings received within the 60 days before, plus a portion of ongoing income; income-execution limits also apply. Because New York permits the choice, many filers compare these amounts with the federal exemptions in 11 U.S.C. 522(d), summarized by Cornell Law School's Legal Information Institute, which include a wildcard that can cover any property. Confirm the current federal amounts when you file.

The Chapter 7 means test and New York median income

Chapter 7 erases most unsecured debt, but you must qualify through the means test, which starts by comparing your household income to the median family income for your state and household size. The U.S. Trustee Program publishes those medians from Census Bureau data and updates them periodically. For cases filed on or after July 15, 2026, the New York median family income figures are $73,272 for one earner, $92,902 for a household of two, $115,579 for three, and $139,040 for four, adding $11,100 for each additional person. If your income is at or below the figure for your household size, you generally pass and may proceed under Chapter 7. If it is above, you complete the longer means-test calculation that subtracts allowed expenses, including regional standards, to see whether you still qualify or whether Chapter 13 is the path. These figures change roughly twice a year, so check the current table at filing.

Chapter 7 versus Chapter 13 in New York

Chapter 7 is a liquidation: a trustee can sell non-exempt property to pay creditors, and most remaining unsecured debt is discharged in a few months. With New York's homestead and personal-property exemptions, many filers keep everything they own, but a high-value non-exempt asset can be at risk. Chapter 13 is a repayment plan that runs three to five years; you keep your property and catch up on missed mortgage or car payments over time, which is why Chapter 13 is common for people trying to stop a foreclosure or cure an arrearage. The moment either case is filed, the automatic stay under 11 U.S.C. 362 stops most collection efforts, including foreclosure sales, repossessions, lawsuits, and wage garnishment. Before filing, federal law requires a credit-counseling course from an approved provider, and a debtor-education course is required before discharge.

Where you file: the four New York bankruptcy courts

New York is divided into four federal judicial districts, and you file in the one that covers your county. The Southern District of New York covers Manhattan, the Bronx, and several Hudson Valley counties; the Eastern District of New York covers Brooklyn, Queens, Staten Island, Nassau, and Suffolk; the Northern District of New York covers the Albany, Syracuse, Utica, and North Country regions; and the Western District of New York covers Buffalo, Rochester, and the western counties. Each court posts local rules, official forms, filing fees, and self-help resources.

What bankruptcy can and cannot do

Bankruptcy discharges most unsecured debts such as credit cards, medical bills, and personal loans, but several categories survive a discharge. Most student loans remain unless you prove undue hardship in a separate proceeding, and recent income taxes, domestic-support obligations like child support and alimony, and most court fines are not dischargeable. Filing affects your credit for years, and giving away or selling property before filing can create problems, so the timing and the choice between federal and New York exemptions are decisions many people review with a licensed New York bankruptcy attorney. Nothing here predicts how a particular case will turn out; the result depends on your income, your property, your debts, your county, and which exemption system you elect.