New York debtor protections limit what a creditor can take when a judgment is entered against you. State law shields a set amount of home equity, specific personal property, one vehicle, most retirement savings, and the bulk of your wages. These protections apply automatically once a creditor tries to collect, but each one has dollar caps, county-based tiers, and exceptions worth knowing before you rely on them.
Home Equity Protection by County
The homestead exemption under CPLR 5206 protects equity in your primary residence from seizure on a money judgment. The amount depends on where the property sits, and the statute divides the state into three tiers:
- $150,000 in Kings, Queens, New York, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, and Putnam counties
- $125,000 in Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster counties
- $75,000 in every other county
These figures cap the equity you can shield above any liens and mortgages. The exemption reaches houses with land, cooperative apartment shares, condo units, and mobile homes. If equity exceeds the applicable limit, a judgment lien attaches to the surplus, but the property does not lose its exempt status entirely. One important carve-out: the homestead exemption does not apply when the judgment itself is for the purchase price of the home.1New York State Senate. New York Code CVP 5206 – Real Property Exempt From Application to the Satisfaction of Money Judgments
Personal Property, Your Car, and Cash
CPLR 5205 keeps household furniture, appliances, clothing, and similar necessities out of a creditor’s reach. Tools, equipment, and professional instruments needed for your trade or profession are protected up to $3,000 in value.2New York State Senate. New York Code CVP 5205 – Personal Property Exempt From Application to the Satisfaction of Money Judgments
You can also exempt one motor vehicle worth up to $4,000 in equity above any liens. If the vehicle has been equipped for use by a disabled debtor, the cap rises to $10,000. The vehicle exemption disappears when the judgment is for child support, spousal support, or when the creditor is New York State or a municipal corporation.2New York State Senate. New York Code CVP 5205 – Personal Property Exempt From Application to the Satisfaction of Money Judgments
If you don’t claim the homestead exemption, you can instead protect up to $1,000 in personal property, bank funds, or cash. It’s a modest fallback, but renters and others without home equity to shield still get a small financial cushion when a judgment lands.2New York State Senate. New York Code CVP 5205 – Personal Property Exempt From Application to the Satisfaction of Money Judgments
What Happens When a Creditor Freezes Your Bank Account
When a creditor serves a restraining notice or execution on your bank, the bank must check whether any statutorily exempt payments landed in the account during the prior 45 days. If so, $2,500 is automatically protected and cannot be frozen or seized. This rule mainly helps people who receive direct deposits of Social Security, veterans benefits, or similar government payments.2New York State Senate. New York Code CVP 5205 – Personal Property Exempt From Application to the Satisfaction of Money Judgments
Federal regulations add a second layer. When federal benefit payments are deposited into an account, the bank must preserve an amount equal to two months’ worth of those deposits, regardless of any state-level garnishment order. That protection runs independently, so an account holding federal benefits gets both safeguards.2New York State Senate. New York Code CVP 5205 – Personal Property Exempt From Application to the Satisfaction of Money Judgments
Retirement Accounts
New York’s protection for retirement savings is broad. Under EPTL 7-3.1, qualified plans such as 401(k)s, IRAs (including Roth IRAs), and Keogh plans are conclusively presumed to be spendthrift trusts, which means creditors generally cannot reach them. The protection applies even to accounts you set up and funded yourself.3New York State Senate. New York Estates, Powers and Trusts Law Section 7-3.1 – Disposition in Trust for Creator Void as Against Creditors
There is one significant catch. Contributions made within 90 days before a creditor filed a claim are not protected. Contributions that qualify as voidable transactions under Article 10 of the Debtor and Creditor Law also lose their exempt status. Last-minute deposits into a retirement account to dodge a looming judgment will not survive scrutiny.3New York State Senate. New York Estates, Powers and Trusts Law Section 7-3.1 – Disposition in Trust for Creator Void as Against Creditors
How Much of Your Paycheck Is Safe
New York limits wage garnishment more tightly than federal law does. Under CPLR 5231, a creditor with an income execution can take no more than 10% of your gross income. That amount is capped further: the deduction from disposable earnings cannot exceed 25% of weekly disposable earnings, or the amount by which those earnings exceed 30 times the greater of the federal or state minimum hourly wage, whichever produces the smaller garnishment.4New York State Senate. New York Civil Practice Law and Rules Section 5231 – Income Execution
If your weekly disposable earnings fall below 30 times the applicable minimum wage, no garnishment is allowed at all. If you’re already paying court-ordered alimony or child support, the amount garnishable for other debts shrinks by whatever is already being deducted for those family obligations. And on medical debt specifically, New York now prohibits any wage garnishment on judgments arising from debt owed to hospitals or licensed health care professionals.4New York State Senate. New York Civil Practice Law and Rules Section 5231 – Income Execution
How Long Creditors Have to Sue
Creditors do not have unlimited time to file suit. New York’s Consumer Credit Fairness Act shortened the statute of limitations on consumer credit transactions from six years to three years. A creditor who does not file within three years of the last payment or default loses the right to sue on that debt. Other contract debts still fall under the general six-year period in the CPLR.
An expired limitations period does not erase the debt, but it removes the courthouse as a collection tool. Courts do not apply the defense on their own. If you’re served with a summons on a debt that looks time-barred, you have to raise the statute of limitations yourself in your answer, or the case can proceed as if the deadline never existed.
When Protections Don’t Apply
Several exceptions run through the exemption statutes, and they matter because they cover situations people commonly assume are protected. The homestead exemption gives way when the judgment is for the home’s purchase price. The vehicle exemption disappears entirely for child support, spousal support, and debts owed to New York State or a municipality. Retirement account protection does not extend to contributions made within 90 days of a creditor’s claim.
Article 10 of the Debtor and Creditor Law also lets creditors reverse transfers made to put assets out of reach, whether the debtor acted with actual intent or simply gave away property for less than reasonably equivalent value while insolvent. Moving assets to a relative or a trust after a lawsuit is on the horizon is unlikely to hold up. The safer approach is to rely on the exemptions the statutes already provide, since those apply automatically and don’t require any pre-collection maneuvering.