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Paterson weighs law to raise debtor exemptions

ALBANY — Legislation on Gov. David Paterson’s desk would raise the dollar value of personal property New York debtors can shield from creditors in court judgments and bankruptcies.

Consumer advocates say it raises some decades-old minimums to keep people working in hard times, and off the government dole, with an index to inflation going forward.

Bankers say it’s an incentive for more bankruptcy filings and a disincentive to lending. Proposed amendments would let state and municipal claims proceed. Spokeswoman Jessica Bassett says Paterson is soliciting input from both sides. He has until Dec. 27 to decide. The bill would raise from $2,400 to $4,000 the exemption for one vehicle, also adding that protection to liens outside bankruptcy.