Vermont Bankruptcy Exemptions

You can protect property when you file a Vermont bankruptcy using Vermont's bankruptcy exemption laws.

Updated January 29, 2019

You don’t need to worry that you’ll lose all of your assets when filing for bankruptcy. Vermont’s bankruptcy exemptions will allow you to protect the things you’ll need to maintain a household and job, such as equity in a home and car, and a retirement account.

Vermont Exemptions v. Federal Bankruptcy Exemptions

Some states, including Vermont, allow residents to choose between the state and federal bankruptcy exemptions. You can’t protect property using both lists, but if you select Vermont’s state exemptions, you can use the federal nonbankruptcy exemptions, too.

To learn more about bankruptcy exemptions, the state exemption system, and the homestead exemption rules, read Bankruptcy Exemptions – What Can I Keep When I File for Bankruptcy?

Common Vermont Bankruptcy Exemptions

Here are some of the more common exemptions in Vermont. When reviewing them, you’ll want to keep these things in mind:

  • Joint filing. Unless otherwise noted, when spouses file together in Vermont, each spouse can claim the full amount of the exemption (informally called “doubling”) as long as each spouse has an ownership interest in the property.
  • List and verify your exemptions. You must claim an exemption by listing it in the official bankruptcy forms. You might qualify for exemptions not included in this article, or be required to meet qualification requirements. Consulting with a local bankruptcy attorney is the best way to ensure that you’re protecting your assets.
  • Legal citations. You’ll find each of the statutes in the Vermont Statutes Annotated or the federal law.

Vermont Homestead Exemption

27-101 – You can exempt equity in real property or a permanently-sited mobile home to $125,000, including outbuildings, rents, issues, and profits. A spouse of a deceased owner can claim this exemption under 27 V.S.A. § 105. Tenancies by the entirety are exempt without limit as to debts of one spouse. Spouses living together can’t double this exemption amount. D'Avignon v. Palmisano, 34 B.R. 796 (D. Vt. 1982). However, spouses living separately and filing a joint petition can claim a separate homestead exemption for each separate property. In re Roberge, 307 B.R. 442, 444 (Bankr. D. Vt. 2004) order amended and supplemented, 03-11135, 2004 WL 3522695 (Bankr. D. Vt. 2004).

Vermont Motor Vehicle Exemption

12-2740 – Equity in a motor vehicle up to $2,500.

Vermont Wildcard Exemption

12-2740 - $400 of any property; plus $7,000 minus any amount claimed for clothing, goods, furnishings, appliances, books, musical instruments, animals, crops, motor vehicle, jewelry, tools of the trade, and growing crops.

Other Vermont Exemptions

Personal Property

12-2740 - Clothing, goods, furnishings, appliances, books, musical instruments, animals and crops up to $2,500 total; refrigerator, stove, freezer, water heater, heating unit and sewing machines; health aids; bank deposits up to $700; wedding ring; jewelry up to $500; 500 gallons of oil, five tons of coal or ten cords of firewood; 500 gallons of bottled gas; lost future earnings for yourself or a person you depended upon; personal injury and wrongful death recoveries for a person you depended upon; one cow, ten sheep, ten chickens, three swarms of bees, and feed to last one winter; one yoke of oxen or steers, two horses, two harnesses, two halters, two chains, one plow and one ox yoke; growing crops up to $5,000.

Wages

12-3170 - All wages if received during the previous two months.

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 maximum (amount changes).

3-476 - State employees.

12-2740 - Self-directed accounts including IRAs and Keoghs as long as contributions were made more than 1 year before filing; other pensions.

16-1946 - Teachers.

24-5066 - Municipal employees.

Public Benefits

12-2740 - Veterans' benefits, Social Security, and crime victims' compensation needed for support.

21-681 - Workers' compensation.

21-1376 - Unemployment compensation.

33-124 - General assistance; aid to blind, aged, and disabled.

Tools of Trade

12-2740 - Tools and books needed in a trade or profession up to $5,000.

Alimony and Child Support

12-2740 - Alimony and child support needed for support.

Insurance

8-3705 - Life insurance proceeds if policy prohibits use to pay creditors.

8-3706 - Life insurance proceeds if the insured is not the beneficiary.

8-3708 - Group life or health benefits.

8-3709 - Annuity contract benefits up to $350 per month.

8-4086 - Health benefits up to $200 per month.

8-4478 - Fraternal benefit society benefits.

12-2740 - Unmatured life insurance contract (but not a credit insurance policy); disability or illness benefits needed for support; life insurance proceeds for a person you depend upon.

Other

Add any applicable federal nonbankruptcy exemptions.

Nonexempt Property—Property You Can’t Protect With a Vermont Exemption

Some people can keep all assets, but that isn’t always true. Here’s what will happen to nonexempt property:

  • In a Chapter 7 bankruptcy, the bankruptcy trustee appointed to administer your case will sell nonexempt property and distribute the proceeds to creditors. Find out more about the bankruptcy process and the Chapter 7 documents you'll need at each stage.
  • In a Chapter 13 bankruptcy, it works differently. You can keep everything you own, but you’ll pay creditors the value of the nonexempt property, your disposable income, or your nondischargeable debt (support obligations, most taxes, and the like), whichever is more, through your Chapter 13 repayment plan.

You’ll learn more about Chapter 7 and 13 in Which Type of Bankruptcy is Right for Me?

Confirming Vermont Exemptions

This list includes the majority of bankruptcy exemptions available in Vermont, but not all. Specific exemptions could have qualification requirements, and amounts might have changed since this list was last updated. Check the Vermont Statutes Annotated or with a local bankruptcy lawyer.

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