The federal bankruptcy exemptions are a list of exemptions created by Congress that are available to bankruptcy filers in certain states.
Bankruptcy exemptions determine what you are allowed to keep during and after Chapter 7 bankruptcy. If property (such as your home, car, or a musical instrument) is exempt, you can keep it. In Chapter 13 bankruptcy, exemptions determine how much you must pay certain creditors through your payment plan.
All states have a set of exemptions that bankruptcy filers can use. Seventeen states allow debtors to choose between their state system or the federal bankruptcy exemptions.
The states that allow federal bankruptcy exemptions include:
|District of Columbia||Oregon|
If you live in one of these states, you can choose between using the federal bankruptcy exemptions or the exemption system created by your state. You cannot mix and match from the two different systems.
To determine which set of exemptions is best for you, state or federal, you'll want to make a list of your property and it's value, then compare what property you can keep under each system.
The amounts allowed under the federal bankruptcy exemptions are adjusted every three years on April 1 to reflect changes in the Consumer Price Index. The federal bankruptcy exemption figures listed in this article are the April 1, 2019 figures. The federal bankruptcy exemptions will be adjusted again on April 1, 2022.
If you are married and filing jointly, you can double all of the federal bankruptcy exemptions. For example, you may claim a homestead exemption of $50,300 (which is double the listed homestead exemption amount of $25,150). (11 U.S.C. § 522(d)(1).)
If a dollar amount doesn't accompany a listed piece of property, the entire value of the property is exempt.
All code references are to 11 U.S.C. (Title 11 of the United States Code).
522(d)(1), (5) - Real property, including mobile homes and co-ops, or burial plots up to $25,150. The unused portion of the homestead exemption up to $12,575 can be used for other property.
522(d)(2) - Motor vehicle up to $4,000.
522(d)(3) - Animals, crops, clothing, appliances and furnishings, books, household goods, and musical instruments up to $625 per item, and up to $13,400 total.
522(d)(4) - Jewelry up to $1,700.
522(d)(9) - Health aids.
522(d)(11)(B) - Wrongful death recovery for a person you depended upon.
522(d)(11)(D) - Personal injury recovery up to $25,150 except for pain and suffering or for pecuniary loss.
522(d)(11)(E) - Lost earnings payments.
522(b)(3)(C) - 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).
522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,362,800.
522(d)(10)(A) - Public assistance, Social Security, Veteran’s benefits, Unemployment Compensation.
522(d)(11)(A) - Crime victim’s compensation.
Tools of Trade
522(d)(6) - Implements, books, and tools of the trade, up to $2,525.
Alimony and Child Support
522(d)(10)(D) - Alimony and child support needed for support.
522(d)(7) - Unmatured life insurance policy except for credit insurance.
522(d)(8) - Life insurance policy with loan value up to $13,400.
522(d)(10)( C ) - Disability, unemployment or illness benefits.
522(d)(11)( C ) - Life insurance payments for a person you depended on, which you need for support.
522(d)(5) - $1,325 of any property, and the unused portion of homestead exemption up to $12,575.