By: Chris Kramer
December 30, 2010
A bill that would increase exemption amounts for personal bankruptcy has recently been signed into law by New York Governor David Paterson. The law will raise the automobile exemption from the previous $2,400 to $4,000, and will raise the home equity exemption from $50,000 to between $75,000 and $150,000, depending on where the debtor resides, according to The Associated Press.
Exemptions in bankruptcy proceedings protect a certain portion of the value in a consumer's possessions from liquidation. If the value of an exempt possession is less than the exemption amount, the possession will not be liquidated for the benefit of creditors.
"Though this is not a perfect bill, the benefits far outweigh its concerns," Paterson said of the new bankruptcy law, according to the New York Daily News. Supporters of the bill reportedly claimed it had been designed to protect bankruptcy filers from having their modest homes, cars and personal possessions taken from them during their bankruptcy proceedings.