Chapter 7 Exemptions by State: Homestead, Vehicles, Retirement

Chapter 7 exemptions vary by state because each state sets its own dollar limits on the property a filer can protect, and most states require their residents to use that state list instead of the federal one. Which set applies to you depends on where you have lived for the two years before filing, and whether your state lets you choose. The practical question for most people is the same: will my home, my car, my retirement account, and enough of my personal property survive the filing? The answer turns on three things — the applicable exemption system, the specific dollar caps in that system, and how you claim them on the right form.

What Exemptions Actually Do

When you file a Chapter 7 petition, nearly everything you own becomes part of the bankruptcy estate: your house, vehicles, bank accounts, investments, tax refunds, personal belongings, and certain property you become entitled to within 180 days after filing, such as an inheritance.¹ The trustee’s job is to gather non-exempt property, sell it, and pay unsecured creditors.

Exemptions are the carve-outs that pull property back out of the estate. Each one is a shield with a dollar limit. Equity that falls under the limit stays with you. Equity above the limit is reachable by the trustee, who can sell the asset, hand you the exempt share in cash, and distribute the rest.

Which State’s Exemptions Apply to You

Residency controls which state’s law governs your filing, and Congress wrote strict rules to stop people from relocating to a friendlier state right before filing.

The baseline is 730 days. If you have lived in the same state for the two years immediately before filing, you use that state’s exemptions.² If you have not, the law looks further back. You use the exemptions of whichever state you lived in for the greater part of the 180-day window that preceded the 730-day period. Someone who moved from Texas to California 18 months before filing still applies Texas exemption law.

If the look-back rules leave you ineligible for any state’s exemptions — a common result for people who have moved repeatedly or just returned from abroad — federal law provides a safety net. In that scenario, you can elect the federal exemption list regardless of your current state’s rules.²

State List or Federal List: Who Gets to Choose

The Bankruptcy Code offers every debtor either a set of federal exemptions written into the statute or the exemptions of their home state.² A majority of states, however, have passed opt-out laws that force residents to use the state list. In those states you cannot elect federal exemptions even if they would protect more of your property. In the remaining states, you compare both systems asset by asset and pick the one that saves more.

The choice is not academic. A renter with cash savings and no home equity usually does better under federal exemptions, which include a large wildcard. A homeowner in a state with a generous homestead exemption usually does better under state law. The only way to know is to total the protected value under each system before deciding.

Federal Dollar Amounts

For debtors who can elect them, the federal exemption amounts were adjusted effective April 1, 2025 and apply to any case filed through the next adjustment:³

Homestead equity in your primary residence: up to $31,575.
Motor vehicle equity in one vehicle: up to $5,025.
Household goods: up to $800 per item, $16,850 total.
Jewelry: up to $2,125.
Tools of the trade: up to $3,175.
Life insurance loan value: up to $16,850.
Wildcard: $1,675 in any property, plus up to $15,800 of any unused portion of the homestead exemption. A renter who claims no homestead gets a wildcard worth up to $17,475.

The wildcard is what makes the federal list attractive for people without home equity. Because it applies to any asset — cash, a tax refund, a boat — it fills gaps the named exemptions leave open.

Where State Exemptions Diverge Most

State laws reflect very different policy choices. Some protect homes aggressively, some protect personal property instead, some are modest across the board. The categories below are the ones that most often decide whether you keep an asset.

Homestead

Homestead protection is where state laws differ most sharply. Texas, Florida, Iowa, and Kansas offer unlimited homestead protection in dollar terms, though they impose acreage limits that typically distinguish between urban and rural properties. Other states cap the homestead at modest amounts that will not cover a home with meaningful equity. Several states use tiered systems where the amount depends on age, disability status, or household income; others set a flat limit.

If your equity exceeds the limit that applies to you, the trustee can sell the home, pay you the exempt share, and distribute the surplus to creditors. That is why homestead math is usually the first calculation in any Chapter 7 plan.

The 1,215-Day Homestead Cap

One federal rule overrides state homestead law for recent buyers. If you acquired your home within the 1,215 days (about three years and four months) before filing, your homestead exemption is capped at $214,000 regardless of what your state’s law would otherwise allow.³ Long-term homeowners are not affected. The rule exists to prevent people from pouring cash into a home in an unlimited-homestead state right before filing.

Motor Vehicles

Vehicle exemptions protect your equity — the gap between fair market value and the loan balance. Most states cap this between $2,000 and $7,500 per vehicle, with higher limits in some states for vehicles adapted for a person with a disability or needed for employment. When equity exceeds the cap, a wildcard exemption can often fill the gap. That is one of the most common uses of the wildcard, especially for debtors who own their cars outright.

Personal Property and the Wildcard

States protect furniture, clothing, appliances, and similar household property through either an aggregate cap or category-by-category limits. The used-goods value of most household items is low enough that they fit comfortably within exemption limits for the typical filer.

The wildcard is where state systems vary most in planning value. Many state wildcards are tied to the unused portion of the homestead exemption, meaning renters and people without home equity get a far larger wildcard than homeowners. Some state wildcards exceed $20,000; others do not exist at all. If you have cash in the bank, a pending tax refund, or an asset that does not fit a named category, the wildcard is usually what protects it.

Retirement Accounts

Retirement savings get the strongest protection of any asset class. Employer-sponsored plans like 401(k)s and 403(b)s that qualify under federal pension law are fully exempt with no dollar cap, whether you use state or federal exemptions. Traditional and Roth IRAs are also exempt, subject to a combined cap of $1,711,975 per person — a figure adjusted effective April 1, 2025 that remains in effect through 2028.³ Money rolled over from a qualified employer plan into an IRA does not count against that cap. For nearly all consumer filers, retirement accounts are untouchable.

Standard brokerage accounts and non-ERISA annuities do not get this treatment. They are part of the estate like any other asset and must be covered by a wildcard or other exemption to survive.

Wages

Wages you have earned but not yet been paid are treated differently from money sitting in your bank account. Federal law limits garnishment of disposable earnings to the lesser of 25% or the amount by which weekly earnings exceed 30 times the federal minimum wage.⁴ Many states protect more, some exempting earned wages entirely.

Timing matters. Once wages hit your bank account, they are usually reclassified as cash and need a cash or wildcard exemption to be protected. Some states trace deposited wages back to their source and continue to protect them for a short period, but that is not universal. A large direct deposit landing the week before filing deserves attention.

Tools of the Trade

Most states protect professional tools, equipment, and books necessary for your occupation. The federal cap is $3,175.³ State amounts vary, and some allow substantially more for equipment essential to a self-employed debtor’s income. A contractor with $20,000 in specialized equipment lives or dies on this exemption.

Joint Filings and Doubling

Married couples who file a joint Chapter 7 petition can sometimes double their exemptions, applying two full sets to shared property. Not every state allows doubling, and some that do restrict it to certain categories. Under the federal system, doubling is generally permitted. A couple using federal exemptions could protect up to $63,150 in homestead equity and up to $34,950 in combined wildcard coverage.

Whether to file jointly or individually depends on who owns which assets, how property is titled, and whether the non-filing spouse carries separate debts. Community property states add complexity because community property is part of the estate regardless of which spouse files.

Claiming Your Exemptions

Exemptions do not apply automatically. You assert each one on Schedule C, filed with your petition.⁵ For every asset you want to protect, you list it, cite the specific federal or state statute, state its fair market value, and state the dollar amount you are claiming. You sign under penalty of perjury.

Schedule C is built from Schedule A/B, your full inventory of what you own. Every asset on Schedule A/B that you want to keep needs a matching entry on Schedule C with a valid legal basis. Property you forget to list is property the trustee can take.

The 30-Day Objection Window

After you file, the trustee and your creditors review your exemption claims. The deadline for an objection is 30 days after the conclusion of the meeting of creditors (the “341 meeting”), though the court can extend it for cause.⁶ If no one objects in that window, your claimed exemptions become final by operation of law, even if a claim was technically wrong. When an objection is filed, the court holds a hearing and the objecting party must prove the exemption was improperly claimed.

If you find a forgotten asset or realize you cited the wrong statute, you can amend Schedule C. Amendments are signed under penalty of perjury and served on the trustee and all creditors, and filing one restarts the 30-day objection clock for the newly listed or changed property. There is no hard deadline for amending in most Chapter 7 cases, but doing it early avoids trouble.

What Happens to What You Cannot Protect

Property not covered by an exemption belongs to the estate. The trustee takes possession, sells the asset, deducts administrative costs and trustee fees, and distributes the rest to unsecured creditors according to the Code’s priority rules.

The trustee cares about equity, not sticker value. For a home with a $300,000 mortgage and $320,000 market value, the trustee is looking at $20,000 in equity minus sale costs. If the net recovery after paying your exempt share and covering sale expenses would be minimal, the trustee will often abandon the asset back to you. That happens frequently when non-exempt equity is small, because administrative costs would eat the proceeds.

Trustees also regularly let debtors buy back non-exempt equity by paying the estate its cash equivalent. If you have $3,000 of non-exempt vehicle equity, the trustee may accept $3,000 instead of auctioning the car. These negotiated buybacks are one of the most common resolutions for borderline assets.

Exemptions address what the trustee can reach. They do not resolve the underlying loan on a secured asset like a car or home — that is a separate decision about whether to reaffirm the debt, redeem the property, or surrender it, and it runs on its own track from the exemption analysis.

Pre-Filing Moves That Backfire

It is tempting to rearrange finances before filing — paying down a mortgage with non-exempt cash, buying exempt household goods with money that would otherwise be seized. Some planning is legitimate. Crossing into fraud can cost you your discharge entirely.

Federal law specifically targets homestead abuse. If you disposed of non-exempt property within the 10 years before filing with the intent to hinder or defraud creditors, and converted the proceeds into homestead equity, that equity can be stripped from your homestead exemption dollar for dollar.² The trustee does not need to prove criminal fraud; showing the transfer was designed to put assets beyond creditors’ reach is enough.

Beyond the homestead rule, the trustee can challenge any pre-filing asset conversion as a fraudulent transfer. Large or unusual transactions in the months before filing — paying off a relative’s loan, transferring property to a spouse, liquidating a brokerage account to buy exempt goods — draw scrutiny and rarely work the way the debtor hoped. If you are weighing moves like these, talk to a bankruptcy attorney before you make them.

1
Office of the Law Revision Counsel. 11 US Code 541 – Property of the Estate
2
Office of the Law Revision Counsel. 11 US Code 522 – Exemptions
3
Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
4
U.S. Department of Labor. Fact Sheet 30 – Wage Garnishment Protections of the Consumer Credit Protection Act
5
United States Courts. Schedule C – The Property You Claim as Exempt
6
Legal Information Institute. Federal Rule of Bankruptcy Procedure 4003 – Exemptions