What Are Federal Bankruptcy Exemptions?

By Cara O'Neill, Attorney
Learn about the property that you'll be able to protect using the federal bankruptcy exemptions.

Filing for bankruptcy doesn’t mean that you’ll lose all of your property. In fact, many people can keep everything that they own. In most cases, you’ll be able to exempt (protect) the things that you’ll need to work and maintain a household, such as furnishings, appliances, clothing, and a certain amount of equity in a vehicle.

Each state decides the property that its residents can exempt. While most states require the use of a state-specific exemption list, others allow residents to use federal exemptions. If your state lets you choose between the two sets, you’ll be able to use the federal exemptions outlined below. However, be aware that you can’t mix and match between the sets. You must stick with one exemption scheme.

(You’ll find state-specific exemption articles on our Personal Bankruptcy topic page.)

Federal Bankruptcy Exemptions

The following list includes commonly used exemptions (as of April 2016):

  • Homestead. $23,675 of equity in your principal residence (such as your house, mobile home, or trailer).
  • Vehicle. $3,775 in an automobile or motorcycle.
  • Household furnishings. $12,625 in furnishings, limited to $600 per item (includes property such as furniture, gardening tools, appliances, clothing, crops, animals, books, musical instruments).
  • Tools of the trade. $2,375 for items needed in your profession (tools, books, equipment).
  • Life insurance policy. $12,625 in loan value, accrued dividends, or interest.
  • Jewelry. $1,600.
  • Health aids. All medically necessary aids.
  • Family support. Spousal or child support payments reasonably needed for your support.
  • Assistance payments. All Social Security, unemployment, veteran’s and disability benefits, as well as public assistance payments.
  • Personal injury award. $23,675 (excluding pain and suffering or pecuniary loss).
  • Future earnings or wrongful death award. Any amount reasonably needed for your support.
  • Crime victim compensation. Any amount reasonably needed for your support.
  • Retirement account. All tax exempt retirement accounts (IRAs and Roth IRAs capped at $1,283,025).
  • Wildcard. $1,250 plus $11,850 of any unused portion of your homestead exemption to use toward any property of your choosing.

Spouses filing a joint petition (filing together) can double the exemption amounts.

Note that this list doesn’t include all available federal exemptions, conditions might apply, and the figures change every three years. To prevent an unexpected asset loss, you should consult with a competent bankruptcy attorney before filing for bankruptcy.

(To learn more about exemptions, read How to Protect Property Using Exemptions in Chapter 7 and Chapter 13 Bankruptcy.)

Questions for Your Attorney

  • Which set of exemptions can I use in my state?
  • If I can choose between state and federal exemptions, which will better protect my property?
  • What will happen to property that I can’t exempt in bankruptcy?
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