Bankruptcy Exemptions - Federal & All States

Maximizing state and federal bankruptcy exemptions in Chapter 7 and Chapter 13

This Code provides for the application of federal bankruptcy exemptions in both Chapter 7 and Chapter 13 cases. In Chapter 7, all excluded property must be surrendered to the trustee unless specifically allowed by a bankruptcy exemption. In Chapter 13, the Code takes a less direct approach, providing, as a condition of plan confirmation, creditors must receive value at least equal to or greater than would be distributed if the case had been liquidated in Chapter 7. Chapter 13 plan confirmation depends on individual bankruptcy exemptions to pass this test.

In a 14 states, debtors are allowed the option of selecting either state or federal bankruptcy exemptions, but are not allowed to mix or match the most beneficial provisions of both. In summary, the federal exemptions must be designated on the debtor's exemption claim Form H which allows debtors to choose among the following bankruptcy exemptions:

• $18,750 appraised equity value for real estate homestead, or personal property utilized as a residence.
• $2,575 for 1 motor vehicle which may be used as personal transportation.
• $425 per individual item, and up to a total of $8,625 allocation for ordinary household items.
• A total of $1,075 for personal jewelry is permissible.
• The $850 wild card allotment, plus up to $8,075 of any remaining authorized but unassigned portion of the federal homestead exemption may be used to exempt any assets, including cash and cash equivalents.
• $1,625 for professional gear and necessities for career.
• Unmatured life insurance contracts, excepting all policies, claims or causes of action for credit life benefits.
• All health aids and prosthesis prescribe by a personal physician.
• Social security benefits, expected unemployment compensation, and proceeds from public assistance programs.
• Veterans benefits a preparations from foreign wars.
• Payments for disability, whether resulting from injury, illness or other causes.
• Court ordered alimony payments and child support compensation, but only up to the extent essential for support.
• Stock bonuses, retirement pensions, profit-sharing plans, contractual annuity contracts or similar benefit plans covering illness, physical disability, mental infirmity, death, or length of service are exempt only up to the extent essential for continued support.
• Compensation provided to victims of crimes, funds received for wrongful death, personal injuries, and physical or mental incapacity, to the extent essential for continued support.

Practice Tip - Statutory values provided by Sec. 522 change periodically in response to changes in the consumer price index. The appearance of statutory updates in the United States Code may be slow. Also remain aware bankruptcy chapter 7 exemptions applications differ significantly from the confirmation test that incorporates bankruptcy chapter 13 exemptions. Nevertheless, the same statutes apply in both situations.

State or Federal bankruptcy exemptions are available in 14 states:
Arkansas Bankruptcy Exemptions Connecticut Bankruptcy Exemptions Hawaii Bankruptcy Exemptions Massachusetts Bankruptcy Exemptions Michigan Bankruptcy Exemptions Minnesota Bankruptcy Exemptions New Jersey Bankruptcy Exemptions	New Mexico Bankruptcy Exemptions Pennsylvania Bankruptcy Exemptions Rhode Island Bankruptcy Exemptions Texas Bankruptcy Exemptions Vermont Bankruptcy Exemptions Washington Bankruptcy Exemptions Wisconsin Bankruptcy Exemptions

Practice Tip - Items covered and corresponding values vary greatly from state to state. A few states provide generous allowances, while other states limit items and values to the threshold of poverty. State residency requirements also vary providing the minimum time required to claim state allowances. Bankruptcy courts highly discourage forum shopping as a means of maximizing property retained. Federal law requires a minimum of 2 years state residency to claim state exemptions.

Only state bankruptcy exemptions are available in the following 36 states:

Alabama Bankruptcy Exemptions Alaska Bankruptcy Exemptions Arizona Bankruptcy Exemptions California Bankruptcy Exemptions Colorado Bankruptcy Exemptions Delaware Bankruptcy Exemptions Florida Bankruptcy Exemptions Georgia Bankruptcy Exemptions Idaho Bankruptcy Exemptions Illinois Bankruptcy Exemptions Indiana Bankruptcy Exemptions Iowa Bankruptcy Exemptions Kansas Bankruptcy Exemptions Kentucky Bankruptcy Exemptions Louisiana Bankruptcy Exemptions Maine Bankruptcy Exemptions Maryland Bankruptcy Exemptions Mississippi Bankruptcy Exemptions

Missouri Bankruptcy Exemptions Montana Bankruptcy Exemptions Nebraska Bankruptcy Exemptions Nevada Bankruptcy Exemptions New Hampshire Bankruptcy Exemptions New York Bankruptcy Exemptions North Carolina Bankruptcy Exemptions North Dakota Bankruptcy Exemptions Ohio Bankruptcy Exemptions Oklahoma Bankruptcy Exemptions Oregon Bankruptcy Exemptions South Carolina Bankruptcy Exemptions South Dakota Bankruptcy Exemptions Tennessee Bankruptcy Exemptions Utah Bankruptcy Exemptions Virginia Bankruptcy Exemptions West Virginia Bankruptcy Exemptions Wyoming Bankruptcy Exemptions

Practice Tip - Recent amendments limit the maximum homestead value under state exemptions to a federally determined dollar amount. These amendment were contained in the Bankruptcy Abuse Prevention Act.