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.
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.
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.
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.
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.
10-4914 - You’ll be able to claim up to $15,000 of equity in a motor vehicle necessary for your employment.
10-4903 - $500 of any personal property if you’re the head of the family (except for tools of the trade).
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.
10-4913 - 85% of earned but unpaid wages.
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.
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
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.
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.
Add any applicable Federal Nonbankruptcy 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:
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?