Bankruptcy exemptions under 11 U.S.C. 522 are the rules that let you keep specific property when you file. The statute sets dollar limits on categories like your home, car, retirement accounts, and everyday belongings, with the current federal amounts (a $31,575 homestead, a $5,025 vehicle, and updates across nearly every other threshold) taking effect April 1, 2025 and running through March 31, 2028.1Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases Whether you use those federal figures or your state’s own list depends on where you’ve lived for the past two years.
In a Chapter 7 case, whatever you don’t exempt, the trustee can sell. In Chapter 13, you keep everything, but the value of your non-exempt property sets the floor for what your repayment plan must pay unsecured creditors. Either way, the exemption list decides the money at stake.
Federal Exemption Amounts
If your state allows the federal system, these are the categories and current caps.2Office of the Law Revision Counsel. 11 USC 522 – Exemptions1Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
Homestead
Up to $31,575 in equity in your primary residence, a housing cooperative interest, or a burial plot. It covers only the home you actually live in. Vacation properties, rentals, and investment real estate get no homestead protection. In expensive markets this figure looks small, which is one reason the choice between federal and state exemptions matters.
Vehicles, Household Goods, and Everyday Property
- Motor vehicle: up to $5,025 in equity in one vehicle.
- Household goods and furnishings: up to $800 per item and $16,850 total across clothing, appliances, books, and similar personal or family belongings.
- Jewelry: up to $2,125 held for personal or family use.
- Tools of the trade: up to $3,175 in work tools, professional books, or equipment.
- Health aids: professionally prescribed health aids are fully exempt with no dollar cap.
- Life insurance: an unmatured policy is fully exempt, plus up to $16,850 in accrued cash value or loan value.
The Wildcard
The wildcard is the most flexible piece of the federal list. You can apply $1,675 to any property, plus up to $15,800 of any homestead exemption you didn’t use. A renter with no home equity effectively gets the full amount to shield a bank account, extra vehicle equity, or anything else of value. This is where careful planning often makes the biggest difference in what you walk away with.
Retirement Accounts
Retirement savings get some of the strongest protection in the statute. Tax-qualified accounts, including 401(k)s, 403(b)s, 457 plans, and ERISA-covered pensions, are exempt with no dollar limit. That protection applies whether you use the federal or state exemption system.
Traditional and Roth IRAs are capped at $1,711,975 per person as of April 2025, though a court can raise the cap if the interests of justice require it. Rollovers from an employer plan into an IRA don’t count against the cap, and SEP and SIMPLE IRAs are treated as employer plans and fall outside it entirely.
Two traps catch people. First, inherited IRAs are not protected. In Clark v. Rameker, the Supreme Court held unanimously that inherited IRAs are not “retirement funds” for exemption purposes.3Justia. Clark v Rameker If you’ve inherited an IRA, that balance is part of the estate. Second, money you withdraw before filing loses its shield. Once it sits in a checking account, it isn’t in a retirement fund anymore, and the exemption doesn’t follow it there.
Public Benefits and Support
Federal exemptions cover the right to receive Social Security, veterans’ benefits, unemployment compensation, disability, and public assistance. Social Security gets an additional layer of protection from the Social Security Act itself, which bars those funds from bankruptcy proceedings.4Social Security Administration. SSR 79-4 Alimony, child support, and separate maintenance you receive are exempt to the extent reasonably necessary to support you and your dependents. Unusually large support payments can be partially exposed under that “reasonably necessary” standard.
Federal or State? It Depends Where You Live
Section 522(b) lets each state block its residents from using the federal list. Roughly 35 states have done so, meaning residents of those states must use the state exemption system. The remaining states let you choose between federal and state, but you have to pick one; you can’t take the best pieces from each.
State systems vary widely. Some offer homestead protection well into six figures or even unlimited home equity. Others are more generous on personal property, wages, annuities, or life insurance than federal law is. The right pick in a choice state depends on what you own. Homeowners with real equity usually follow the bigger homestead. Renters often prefer the federal wildcard.
Which State’s Exemptions Apply
You don’t automatically get the exemptions of the state where you live now. Under Section 522(b)(3)(A), you use the exemptions of the state where you were domiciled for the 730 days before filing. If you moved during that period, you use the state where you lived for most of the 180 days immediately before the 730-day window. If those calculations leave you ineligible for any state’s exemptions, you can fall back on the federal list.
The point of the rule is to stop people from moving to a friendlier state right before filing. Anyone who has relocated in the last few years should map out the timeline before filing. Using the wrong state’s exemptions can mean losing property you thought was safe.
Joint Filers Get Two Sets
Section 522(m) says exemptions “shall apply separately with respect to each debtor in a joint case.” Spouses filing together each claim the full list, effectively doubling protection on jointly owned property: up to $63,150 in homestead equity, $10,050 across two vehicles, and so on.
Filing jointly isn’t automatic strategy. If one spouse has substantial debt and the other has little, a joint filing pulls both spouses’ assets into the estate. Filing alone might keep the non-debtor spouse’s property out entirely. The choice turns on how much joint property exists and whether the doubled exemptions cover it.
What Exemptions Don’t Do
An exemption shields equity from the trustee and unsecured creditors. It doesn’t eliminate certain debts, and those debts can still reach exempt property under Section 522(c):
- Domestic support obligations: child support and alimony survive bankruptcy and can collect against exempt property. The statute explicitly overrides state law that would say otherwise.
- Tax liens: a properly filed tax lien attaches to exempt property and survives.
- Certain fraud debts: debts from fraud against a federal depository institution or from fraudulently obtained educational aid can also reach exempt property.
- Secured debts with valid liens: your mortgage and car loan don’t disappear because you exempted the equity. The exemption protects equity, not the collateral itself.
This is where filers get caught off guard. Exempting your home doesn’t cancel the mortgage. Exempting a bank account doesn’t stop a child support garnishment.
Homestead Caps for Recent Buyers and Movers
Two anti-abuse provisions limit the homestead specifically. If you acquired your home within 1,215 days (about three years and four months) before filing, your state homestead is capped at $214,000 no matter what the state normally allows. And if you sold non-exempt property within the 10 years before filing and rolled the proceeds into home equity with the intent to put assets out of creditors’ reach, the court can reduce your homestead by the amount traceable to that transfer. The 10-year lookback is long, and trustees do use it.
Stripping Liens That Impair Exemptions
An exemption is worth less if a lien sits on top of it. Section 522(f) lets you avoid two kinds of liens that impair exempt property. The first is judicial liens (liens from a court judgment), with an exception carved out for domestic support obligations. The second is certain non-purchase-money security interests in household goods, clothing, appliances, tools of the trade, or health aids. That second category commonly reaches finance companies that took a security interest in furniture or electronics you already owned.
The math: if the total of all liens plus your exemption exceeds the property’s value, the judicial lien impairs the exemption to that extent and can be stripped. It’s a technical motion, but a valuable one. Without it, a judgment lien can follow property right through the discharge.
Claiming Exemptions on Schedule C
Exemptions don’t apply on their own. You have to list every asset you want to protect on Schedule C of your petition and cite the specific statute and dollar amount for each claim.5Legal Information Institute. Federal Rules of Bankruptcy Procedure Rule 4003 – Exemptions Omitting an asset or citing the wrong provision can cost you property you were entitled to keep.
Creditors and the trustee then have 30 days after the conclusion of the meeting of creditors (or the filing of an amendment or supplemental schedule, whichever is later) to object. If no one objects in that window, the exemption stands even if it was technically improper. The burden of proof sits with the objecting party, not with you.
You can amend Schedule C under Rule 1009 to add exemptions you missed or fix errors, and courts generally allow amendments freely unless creditors would be prejudiced. An amendment restarts the 30-day objection clock for the newly claimed items. If you notice an asset you left off, amend promptly rather than hoping it goes unnoticed.
The 180-Day Trap After Filing
Your estate doesn’t necessarily close on filing day. Under 11 U.S.C. 541(a)(5), certain property you become entitled to within 180 days after filing gets pulled into the estate:6Office of the Law Revision Counsel. 11 US Code 541 – Property of the Estate
- Inheritances, measured from the date of death rather than when funds arrive.
- Life insurance proceeds you become entitled to receive.
- Property from a divorce decree or settlement.
After the 180 days, new property generally stays out. If you know an inheritance or a divorce settlement is on the horizon, when you file matters as much as how you fill out the schedules.