Federal Bankruptcy Exemptions
These exemptions are found in 11 U.S.C. §522 and can be used by anyone who is qualified to file bankruptcy in a state that allows its residents to use the federal exemptions, or by anyone who doesn’t qualify under residency requirements to use state exemptions. You have to live in a state for at least 91 days before you can file for bankruptcy there. The states that allow you to use the federal exemptions are: Alaska, Arkansas, Connecticut, District of Columbia, Hawaii, Kentucky, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Washington, and Wisconsin.
Though federal law allows states to opt out of most federal exemptions, a few apply in all jurisdictions. The most important are the pensions exemptions listed below. Every state’s exemptions automatically include these.
The dollar amount allowed under each exemption is updated for inflation every 3 years with the next increase due in April 1, 2016.
|Asset||Exemption||Subsection of 11 USC § 522|
|Homestead||Real property, mobile home, co-op, or burial plot: up to $22,975. Up to $11,500 of this amount may be used as a wildcard and applied to any kind of property.||(d)(1); (d)(5)|
|Insurance||Life insurance contract (not matured): all except credit insurance policies.||(d)(7)|
|Life insurance policy loan value and accrued dividends: up to $12,250.||(d)(8)|
|Unemployment, disability, and illness benefits: all.||(d)(10)(C)|
|Life insurance payments from a policy taken out on someone the debtor depended on: all necessary for support.||(d)(11)C)|
|Miscellaneous||Child support and alimony: all necessary for support.||(d)(10)(D)|
|Pensions||Tax exempt retirement accounts (which include 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined-benefit plans): all.||(b)(3)(C)|
|IRAs and Roth IRAs: up to $1,245,475 per person.||(b)(3)(C)|
|Personal Property||Motor vehicle: up to $3,675.||(d)(2)|
|Household goods, appliances, furnishings, clothing, books, musical instruments, animals, crops: up to $575 per item and up to $12,250 total.||(d)(3)|
|Jewelry: up to $1,550.||(d)(4)|
|Health aids: all.||(d)(9)|
|Recovery for the wrongful death of a person on whom the debtor depended: all.||(d)(11)(8)|
|Recoveries for personal injury (excluding amounts for pain and suffering and pecuniary loss): up to $22,975.||(d)(11)(D)|
|Payments for lost earnings: all.||(d)(11)(E)|
|Public Benefits||Public assistance benefits: all.||(d)(10)(A)|
|Social Security benefits: all.||(d)(10)(A)|
|Unemployment compensation benefits: all.||(d)(10)(A)|
|Veterans’ benefits: all.||(d)(10)(A)|
|Crime victim compensation: all.||(d)(11)(A)|
|Tools of Your Trade||Implements, tools, and books: up to $2,300.||(d)(6)|
|Wildcards||Any property: up to $1,225.||(d)(5)|
|Any property: up to $11,500 of the unused homestead exemption.||(d)(5)|
Click here to read an Introduction to Bankruptcy Exemptions.