The biggest concern in any bankruptcy filing is “What assets do I keep?” U.S. Bankruptcy Code § 522 lets debtors exempt certain assets from the bankruptcy estate. NJ residents may choose federal or NJ state exemptions, and NY residents may choose NY state or federal exemptions.
Federal Exemption Key Limits (2026)
Homestead — ~$27,900 per filer (~$55,800 joint). Motor Vehicle — ~$4,450 per vehicle. 401(k) / IRA — essentially unlimited (IRA cap ~$1,512,350). Household goods — ~$14,875 aggregate, ~$700 per item. Wildcard — ~$1,475 plus 50% of unused Homestead.
New York State Exemptions (CPLR §§ 5205, 5206)
New York’s homestead protection is much stronger than federal. NY Homestead: $204,825 in NYC, Long Island, and Westchester; ~$102,400 in other counties (Albany, Buffalo, etc.). Motor vehicle: $4,825 (up to $11,975 for vehicles equipped for the disabled). 401(k) and IRA receive the same protection as under federal law.
New Jersey State Exemptions
NJ state exemptions are significantly weaker than federal exemptions, so most NJ residents choose federal. Limited situations may favor state exemptions; Song Law Firm reviews case by case.
Korean Assets Abroad
Assets in Korea (real estate, bank accounts) must be disclosed on the bankruptcy schedules. Failure to disclose can result in denial of discharge or criminal liability. Korean assets generally do not receive U.S. exemption protection; Song Law Firm walks clients through disclosure and valuation.
FAQ
Q. I just moved from NJ to NY — can I use NY exemptions?
No. 11 U.S.C. § 522(b)(3)(A) requires using the exemptions of the state where you lived the majority of the 730 days before filing. To use NY exemptions, you must have lived in NY for at least 730 days. Otherwise, only federal exemptions apply.
Q. Do joint filings double the exemption?
Federal exemptions double for joint filings (Homestead $55,800). NY exemptions are only partially doubled — the homestead exemption itself is per residence, not per spouse. Song Law Firm runs scenario comparisons for each couple.
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Song Law Firm helps Korean American clients across NJ and NY navigate every step — pre-filing creditor negotiations, asset protection strategy, and post-discharge credit recovery — in Korean, English, and Chinese. Our team serves Fort Lee, Bergen County, Hudson County, and the broader NJ–NY metro area.
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This column is for general informational purposes only and is not legal advice on any specific matter. Reading this article or contacting Song Law Firm does not create an attorney–client relationship. Please consult a qualified attorney for advice on your particular situation.
