Delaware Bankruptcy Exemptions

December 31, 2018

Like all states, Delaware has a set of exemptions you can use to protect property—such as a home, car, or retirement account—when filing for Chapter 7 or Chapter 13 bankruptcy. What will happen to nonexempt property will depend on the bankruptcy chapter you file.

  • In a Chapter 7 bankruptcy, the bankruptcy trustee will sell nonexempt property and distribute the proceeds to creditors.
  • In a Chapter 13 bankruptcy, you’ll be able to keep everything you own, but, in your repayment plan, you’ll have to pay the value of the nonexempt property equity, or your disposable income, whichever is more.

To learn more about each chapter type, try reading When Is Chapter 7 Bankruptcy Better Than Chapter 13? Tips specific to Delaware bankruptcies can be found in Filing for Bankruptcy in Delaware.

Delaware Bankruptcy Exemptions

Some states allow debtors to choose between the state exemption system and a set of federal bankruptcy exemptions, but not Delaware. You’ll have to use Delaware’s exemptions. You can use applicable federal nonbankruptcy exemptions in addition to the state exemptions.

Delaware Bankruptcy Exemptions

Unless otherwise noted, a married couple filing together can “double” the amount if both have an ownership interest in the property, and all law references are to the Delaware Code Annotated. Also, total exemptions (not including retirement plans and principal residence) can’t exceed $25,000 for a single person; $50,000 for a husband & wife.

Delaware Homestead Exemption

10-4914 - Real property or a manufactured home that is your primary residence up to $125,000 (spouses cannot double). Property held as tenancy by the entirety may be exempt against debts owed by only one spouse.

Delaware Motor Vehicle Exemption

10-4914 - You’ll be able to claim up to $15,000 of equity in a motor vehicle necessary for your employment.

Delaware Wildcard Exemption

10-4903 - $500 of any personal property if you’re the head of the family (except for tools of the trade).

Personal Property

10-4902 - Clothing, including jewelry; books; family pictures; piano; leased organs; sewing machines; burial plot; church pew or any seat in public place of worship.

10-4916 - College investment plan account (whichever is more; limit of $5,000 for one year before filing or the average of the past two years' contributions) or Delaware ABLE account.

12-3536 - Principal and income from spendthrift trusts.

Wages

10-4913 - 85% of earned but unpaid wages.

Pensions

11 U.S.C. § 522 - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing, and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).

11 U.S.C. § 522(b)(3)(C)(n) - IRAS and Roth IRAs to (federal limits apply) including inherited IRAs (in most states, inherited IRAs are not exempt).

11-8803 - Police officers.

16-6653 - Volunteer firefighters.

29-5503 - State employees.

Public Benefits

19-2355 - Workers' compensation.

19-3374 - Unemployment compensation.

31-2309 & 31-513 - General assistance; aid to aged, blind and disabled.

11-9011 - Crime victims' compensation.

18-6708 - Fireman's Disability Benefit

Tools of Trade

10-4902 - Tools, implements and fixtures, up to $15,000, but not exceeding $75 in New Castle and Sussex counties, and $50 in Kent County.

Insurance

18-2725 - Life insurance proceeds.

18-2726 - Health or disability benefits.

18-2727 - Group life insurance policy or proceeds.

18-2728 - Annuity contract proceeds up to $350 per month.

18-2729 - Life insurance proceeds if policy prohibits use to pay creditors.

18-6218 - Fraternal benefit society benefits.

Other

Add any applicable Federal Nonbankruptcy Exemptions.

Confirming Delaware Exemptions

It’s crucial that you confirm exemption availability through independent research or by consulting with a local bankruptcy attorney. Most courts won’t dismiss your case if you make a mistake about the property you’re entitled to keep, so it’s important to understand that:

  • this article doesn’t include all Colorado exemptions or requirements you must meet, and
  • the dollar amounts might have changed since this article was last updated.

You can learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, by reading Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?

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