Federal Bankruptcy Exemptions: Property You Can Keep in Chapter 7 and 13

Federal bankruptcy exemptions are the property categories and dollar limits set by 11 U.S. Code 522 that let you keep specific assets when you file. The current figures, in effect since April 1, 2025, protect up to $31,575 of home equity, $5,025 of vehicle equity, $16,850 of household goods, retirement accounts, and several types of income. Whether you can actually use them depends on your state: about 20 states and the District of Columbia let filers choose between federal and state exemptions, while the rest require their own.

Whether You Can Use the Federal System at All

The Bankruptcy Code lets each state block its residents from the federal list. If your state permits the choice, you pick the system that protects more of your property, but you cannot mix individual exemptions from both.

Which state’s law applies turns on where you have lived. You use the exemptions of the state where you have been domiciled for the full 730 days before filing. If you moved during that window, the court looks at where you lived for the majority of the 180 days before the start of that 730-day period.¹

There is a safety net. If the residency formula leaves you ineligible for any state exemption at all, the statute lets you fall back on the federal exemptions even if your state has opted out.¹

Home Equity

The homestead exemption protects up to $31,575 of equity in your primary residence. Equity is what is left after your mortgage and any liens. The property can be a house, condo, mobile home, or cooperative unit, and the exemption also covers a burial plot.¹

A separate cap applies if you bought your home or moved to a new state within the 1,215 days (about three years and four months) before filing. In that situation, your protection on equity acquired during the window is capped at $214,000, even in states with generous homestead laws of their own.²

Vehicles, Household Goods, and Other Personal Property

Each category below has its own dollar limit, and each applies per debtor.

Motor Vehicle

You can protect up to $5,025 of equity in one motor vehicle. If your car loan balance exceeds the car’s value, your equity may already be zero and the exemption effectively keeps the vehicle out of reach. If your car is paid off and worth $12,000, only $5,025 is protected; a trustee could sell it, pay you the exempt amount, and give the rest to creditors.¹

Household Goods and Furnishings

Furniture, appliances, clothing, books, animals, and musical instruments used by you or your family are protected up to $800 per item and $16,850 in total. Used household goods rarely carry much resale value, so most people keep everything in this category. Antiques, collectibles, and high-end electronics are where the per-item cap tends to matter.¹

Jewelry

Jewelry held for personal or family use is exempt up to $2,125 total. This is an aggregate limit, not per piece.¹

Tools of the Trade

Equipment, professional books, and tools you need for your work are protected up to $3,175. That covers everything from a mechanic’s toolbox to a photographer’s camera gear, as long as the items are genuinely used in your profession.¹

Health Aids

Professionally prescribed health aids for you or your dependents are fully exempt with no dollar limit. Wheelchairs, hearing aids, and prosthetics cannot be taken to pay creditors.¹

The Wildcard

The wildcard applies to any property you choose. Its base amount is $1,675, usable to protect cash, a tax refund, or extra equity that spills over another exemption’s limit.¹

If you are not using the full homestead exemption, you can add up to $15,800 of the unused portion to that $1,675 base, for a potential wildcard total of $17,475. Renters benefit most: a renter who claims no homestead at all can apply the full $17,475 to bank accounts, a second vehicle, or anything else.²

Income and Benefits

Social Security benefits, veterans’ benefits, unemployment compensation, public assistance, and disability or illness benefits are all exempt with no dollar cap.¹

Alimony, child support, and separate maintenance are exempt to the extent reasonably necessary for the support of you and your dependents. There is no fixed dollar limit, but a court will look at whether the amount you want to protect truly matches what you need for basic support.¹

Payments for personal bodily injury are exempt up to $31,575, but that does not cover pain and suffering or compensation for actual financial losses. Wrongful death and loss-of-future-earnings awards have no fixed cap but are limited to what is reasonably necessary for your support.¹

Retirement Accounts

Retirement savings get some of the strongest protection in bankruptcy. Funds in employer-sponsored plans like 401(k)s, 403(b)s, and defined benefit pensions are protected without any dollar limit and sit entirely outside the bankruptcy estate.¹

Traditional and Roth IRAs are capped. The aggregate exemption for all your IRA accounts combined is $1,711,975 for cases filed between April 1, 2025, and March 31, 2028. Funds rolled over from a qualified employer plan into an IRA keep their unlimited protection and do not count toward the cap; the cap applies only to amounts you contributed directly to the IRA.²

Life Insurance

An unmatured life insurance policy you own is fully exempt, so a trustee cannot cash it in to pay creditors. Credit life insurance is the one exception.¹

If your policy has accrued cash surrender value, dividends, or loan value, that accumulated value is exempt up to $16,850. Whole life policies are the main concern here; term life policies generally have no cash value to protect.²

Doubling for Married Couples

When spouses file jointly, each claims their own set of exemptions, which doubles every federal amount. A couple can protect up to $63,150 in home equity, $10,050 in vehicle equity, and so on across every category. Both spouses have to use the same system; one cannot choose federal while the other picks state exemptions.¹

How Exemptions Play Out in Chapter 7 and Chapter 13

In Chapter 7, the trustee can sell any non-exempt property and pay the proceeds to creditors. Exemptions decide directly what you keep. If everything you own is exempt, the trustee has nothing to sell and the case is a “no-asset” case. Most consumer Chapter 7 cases end that way.

In Chapter 13, you keep your property and repay creditors through a three-to-five-year plan. Exemptions still matter because your plan must pay unsecured creditors at least what they would have received in a Chapter 7 liquidation. The more you can exempt, the lower that floor, which often means lower monthly payments.

How to Claim Your Exemptions

You claim exemptions on Schedule C (Official Form 106C). For each asset you list a description, its current value, the amount you are claiming as exempt, and the specific statute that authorizes the exemption.³

After you file Schedule C, the trustee and creditors have 30 days after the conclusion of your meeting of creditors to object to a claimed exemption. The court can extend the deadline for good cause, and a trustee who discovers fraud can object within one year after the case closes. If no one objects in time, your claimed exemptions become final.⁴

If you left something off or claimed the wrong amount, you can amend Schedule C at any time before the case closes. You must notify the trustee and any affected party, and the 30-day objection clock restarts for anything newly claimed or changed.⁵

1
Office of the Law Revision Counsel. 11 U.S. Code 522 – Exemptions
2
Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
3
United States Courts. Schedule C: The Property You Claim as Exempt (Individuals)
4
Legal Information Institute. Federal Rules of Bankruptcy Procedure Rule 4003 – Exemptions
5
Legal Information Institute. Federal Rules of Bankruptcy Procedure Rule 1009 – Amending a Voluntary Petition, List, Schedule, or Statement