As a person struggling with options due to debt, the last thing you want to have to do is give up your home. For some people in New York, that was a very real threat, even though they were on rent-stabilized leases. Now, a Nov. 20 report shows that these leases are exemptions; that means those in their leased homes won’t have to give them up.
This decision was made with millions of people in mind; in fact, New York State’s highest court has ruled to say that leases for rent-regulated properties must be bankruptcy exempt. Why? These properties are public benefits, and that means they can’t be seized as an asset in a personal bankruptcy.
The ruling won 5-to-2 in the Court of Appeals. A rent-stabilized lease is a public assistance benefit, just like unemployment or disability payments, which are also off limits tobankruptcy courts. The case that brought this issue to the forefront included an 80-year-old woman whose landlord offered to buy her rent-stabilized lease and to give her the money to pay off her debt. Her debt, which was only $23,000, would have been covered, but her lawyers were worried that she would eventually be evicted from the property, even though the landlord had said he would allow her to continue living there. After all was said and done in court, her lease was allowed to be continued outside of bankruptcy thanks to the policy that it would be exempt.
If you have questions about your home and if it can be exempt, it’s best to speak with someone familiar with New York bankruptcy law. With the right help, you may be able to keep your home throughout your bankruptcy, so you can avoid foreclosure.
Source: The New York Times, “Rent-Stabilized Leases Shielded in Bankruptcy” MIREYA NAVARRO, Nov. 20, 2014by