Federal Bankruptcy Exemptions --
What Property Do I Get to Keep When Filing Bankruptcy?
Federal bankruptcy exemptions are available to residents in 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. Married couples can double the amount of the exemption amounts stated below. If you do not live in one of the states mentioned in the sentence above, you are required to use your state's property exemptions. If you use your state's exemptions, you may also use the federal non-bankruptcy exemptions.
Below are the amounts of money and property one who files Chapter 7 bankruptcy gets to keep under the federal bankruptcy exemptions. The federal bankruptcy exemptions are adjusted every three years to keep up with inflation and the adjustments are based on the Consumer Price Index. The federal bankrutpcy exemptions were last adjusted in April of 2013; therefore, they will likely be adjusted again in April 2016.
It is important to note that if a specific dollar amount is not listed next to an item, the entire value of the property is exempt. For example, below there is not a dollar amount next to "health aides" which means you get to keep all health aides regardless of value. If you are married, the exemptions below can be doubled.
The federal bankruptcy exemptions are listed in United States Bankruptcy Code 11 United States Code Sec. 522(d)] and are as follows:
Homestead Exemption: Real property, including mobile homes and co-ops, or burial plots up to $22,975
Can't use the homestead exemption for rental or vacation property
Motor vehicle up to $3,675 [522(d)(2)]
Animals, crops, clothing, appliances and furnishings, books, household goods, and musical instruments up to $575 per item up to $12,250 total [522(d)(3)]
Jewelry up to $1,550 [522(b)(3)(C)]
All Health aids [522(d)(9)]
Wrongful death recovery for person you depended upon for support [522(d)(11)(B)]
Personal injury recovery up to $22,975 except for pain and suffering or for pecuniary loss [522(d)(11)(D)]
Lost earnings payments [522(d)(11)(E)]
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)]
IRAS and Roth IRAs to $1,245,475 [(522(b)(3)(C)(n)]
Public Benefits: Public assistance, social security, veteran’s benefits, unemployment compensation [522(d)(10)(A)] and crime victim’s compensation [522(d)(11)(A)]
Tools of Trade: Implements, books and tools of trade, up to $2,300 [522(d)(6)]
Alimony and Child Support: Alimony and child support needed for support [522(d)(10)(D)]
Unmatured life insurance policy except credit insurance [522(d)(7)]
Life insurance policy with loan value up to $12,250 [522(d)(8)]
Disability, unemployment or illness benefits [522(d)(10)(C)]
Life insurance payments for a person you depended on, which you need for support [522(d)(11)(C)]
Wildcard: $1,225 of any property, and unused portion of homestead up to $11,500 [522(d)(5)]