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Self-employment net income 90% exempt: Dziedzic

Posted by: Peter Scribner
November 17, 2009
Topic: Recent Cases in the bankruptcy Court Western District of New York

In re Dziedzic #08-14061 (Decision March 24, 2009; Judge Bucki, Buffalo): Personal services income exemption for self-employed applies to net income only.  Debtor, a self-employed chiropractor, asserted a 90% personal services exemption for services rendered 60 days prior to filing, pursuant to NY CPLR Sect. 5205(d).  According to debtor’s schedules, only 18.2% of gross business revenue represented personal income, the rest was for overhead.  Debtor had $5,625.49 in the bank when the case was filed, plus $100 cash. $2,500 was exempt cash and the debtor did not claim an exemption for another $2,079.38.  Of the balance of $1,146.11, the debtor claimed 90% exempt.  The court agreed with the trustee that only 90% of 18.2% of this money was exempt, as only 18.2% was actual “earnings” as that word is used in the exemption statute, CPLR 5205(d).

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