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State Bankruptcy Exemptions

Regardless of whether you file Chapter 7 or Chapter 13 bankruptcy, you will need to understand exemptions. Exemptions allow you to protect certain property. There are both federal and state exemptions, but state exemptions tend to be more generous for certain items, enabling you to retain more of your homestead or other property. Some states allow you to choose whether to use state or federal exemptions while others require you to use theirs. You will not be able to combine, mix or match state and federal exemptions.

You can opt to use either federal or state exemptions if you live in one of the following states:

  • 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
  • Washingto
  • Wisconsin


Federal Exemptions

The current federal exemptions, which were adjusted in April 2016 and are due to be adjusted again in 2019, include the following:

  • The homestead exemption, which protects the equity in your principal residence up to $23,675 but is not valid for rental properties or secondary residences
  • Vehicle exemption of up to $3,775
  • $1,600 in jewelry
  • $2,375 for tools of the trade
  • $12,625 total or $600 individual for furnishings, appliances, clothing, books, musical instruments, animals or crops
  • Medical equipment


Married couples who are filing for bankruptcy jointly can double these amounts.

You can also exempt certain benefits or support, including child support, spousal support, social security benefits, unemployment benefits, veterans benefits, public assistance, disability benefits or illness benefits.

If you suffered an injury or loss, you can exempt up to $23,675 of the awards, awards for loss of earnings, wrongful death awards and any compensation that you received as a victim of a crime.

Retirement Accounts

Any tax-exempt retirement account is considered fully exempt. IRAs and Roth IRAs can be exempted up to $1,283,025.

Wildcard Exemptions

This exemption can be applied to any of your property. It is worth $1,250, and it can be added to $11,850 of an unused homestead exemption to protect the equity or assets of any other property. It can be split or combined as desired.

State Exemptions

Each state has its own rules covering exemptions. Some states allow unlimited homestead exemptions, while others have lower exemptions than the federal exemptions. California has two distinct sets of state exemptions. One of them is designed to protect more home equity while the other has a significant wildcard exemption.

Choosing Your Exemptions

If you live in a state that allows you to choose between state and federal exemptions, you’ll need to decide which set to use. There is no one right answer: The best choice for you will depend on your circumstances. For example, if you have significant equity built up in your home, then you may benefit more from your state’s exemptions than the federal exemptions.

Other Exemptions

Not all exemptions are provided through bankruptcy law. Nonbankruptcy exemptions are protected by other laws and affect civil servants, members of the military, veterans and social security recipients. These exemptions are only valid under state exemptions and cannot be combined with federal exemptions.

Contact Us Today!

Exemptions allow you to protect your property for a more effective, financially stable fresh start, but it can be tough to decide whether federal or state exemptions are best for your situation. The team members at First America Law can help you choose the most beneficial exemptions for the most secure future. We will also work with you throughout the bankruptcy proceedings so that you can file with confidence. Call us today at 1-800-695-7674 to schedule a free, no-obligation evaluation.