Governor Paterson has signed a new bankruptcy bill

The bill will allow New Yorkers who are facing bankruptcy to protect more assets. The bill raises from $2,400 to $4,000 the exemption allowed for a vehicle. This is an exemption that had not increased for many years. Many debtors are concerned about losing their cars in bankruptcy. In practice, trustees have not often forced the surrender of cars in cases where the debtor's interest was greater than $2,400 but not by much. It was simply too costly for them to take cars. The new law will simply turn a common practice into law.

The law also raises the homestead exemption. This will help to protect people who find that they still need to file bankruptcy when the housing market improves.

The new law also allows debtors to choose between New York exemptions and federal exemptions. This was not previously an option in New York. By next week, I hope to have analyzed this fully. At first glance, it appears that one reason for choosing federal exemptions will be that that those exemptions allow the debtor to keep a larger amount of the proceeds if they have a pending personal injury lawsuit.

Re: Governor Paterson has signed a new bankruptcy bill

Well, the bankruptcy community is all abuzz about the new changes. The e-mails are flying, bloggers are busy and the court house corridors are full of discussion. The changes are even more favorable to debtors than many of us expected them to be. People who file bankruptcy after January 21 of 2011 will be entitled to greater protections for their homes, cars and even cash. I will be honoring my 2010 pricing for all retainers signed between now and January 21, 2011, even if we decide to wait to take advantage of the new law.