Federal Exemptions for Chapter 7: Home, Vehicle, and Wildcard

If you file Chapter 7, the federal bankruptcy exemptions in 11 U.S.C. § 522(d) let you keep your home equity up to $31,575, one vehicle up to $5,025, most household goods, your retirement accounts, prescribed health aids, and a flexible wildcard that protects any property you choose. These dollar amounts took effect on April 1, 2025, and apply to cases filed through March 31, 2028.¹ The catch: roughly 34 states have opted out of the federal list, so whether you can use it depends on where you live.

Can You Use the Federal List at All?

Section 522(b)(2) lets each state force its residents onto a state-specific exemption list instead of the federal one. About two-thirds of states have done so.² If you live in an opt-out state, the federal list is simply not available to you, and the exemptions below do not apply.

If your state has not opted out, you choose one system or the other for your whole case. You cannot combine them, so you cannot pair a state homestead exemption with a federal vehicle exemption. Whichever list you pick governs every asset in the estate.²

Where You Lived Matters

The applicable exemption law is the one in the state where you were domiciled for the 730 days before filing. If you moved during that window, the law of the state where you lived for most of the 180 days before that 730-day period usually controls. If that lookback leaves you with no state’s exemptions available, you can elect the federal list even from an opt-out state.³

Your Home

Section 522(d)(1) protects up to $31,575 of equity in your primary residence.¹ Equity is the current market value minus your mortgage balance. A $200,000 home with a $185,000 mortgage carries $15,000 in equity and sits well under the cap. The same provision also covers a cooperative ownership interest you live in or a burial plot for you or a dependent.²

The federal homestead amount is modest next to some state figures. A few states offer unlimited homestead protection, so if your state gives you the choice, compare before filing.

Your Vehicle

Section 522(d)(2) covers up to $5,025 of equity in one motor vehicle.¹ A $12,000 car with a $9,000 loan has $3,000 in equity, fully protected. If equity exceeds the cap, the trustee can sell the car, but you still receive the exempt $5,025.

Household Goods, Clothing, and Jewelry

Furniture, appliances, clothing, electronics, and books held primarily for personal, family, or household use are protected under § 522(d)(3) up to $800 per item and $16,850 overall.¹ Items used in a business or held for investment do not qualify.⁴ Values are set at what the item would sell for at a garage sale, not replacement cost, so most used household property comes in well under the limits.

Personal-use jewelry gets its own slot under § 522(d)(4) at $2,125 total.¹ Wedding and engagement rings are the usual items here. Jewelry worth more than the cap can sometimes be covered by the wildcard.

The Wildcard: Any Property You Choose

Section 522(d)(5) is the most flexible exemption. You can apply $1,675 to any property, plus up to $15,800 of whatever portion of your homestead exemption you did not use.¹ Cash in a bank account, a tax refund, a second vehicle, a valuable collection: the wildcard can shield any of it.

Renters benefit most. With no home equity to claim, the full $15,800 of homestead spillover is available, which stacks with the base $1,675 for $17,475 of flexible coverage. Homeowners use the wildcard too, but the spillover is limited to the portion of the $31,575 homestead cap they did not actually need.² A homeowner with $10,000 in equity uses $10,000 of the homestead and can carry up to $15,800 into the wildcard, for a total of $17,475.

Life Insurance

Federal law splits life insurance into two protections. Under § 522(d)(7), the unmatured policy itself is fully exempt, provided it is not a credit life insurance contract, so the trustee cannot cancel it.³ Section 522(d)(8) separately protects up to $16,850 of accrued dividends, interest, or loan value in an unmatured policy insuring you or a dependent.¹ Cash value above the cap can sometimes be covered by the wildcard.

Tools of Your Trade and Health Aids

Section 522(d)(6) protects up to $3,175 in books, tools, and equipment you (or a dependent) need to earn a living.¹ Mechanic’s tools, trade equipment, and professional reference books fit here.

Professionally prescribed health aids such as wheelchairs, hearing aids, and prosthetics are fully exempt under § 522(d)(9) with no dollar cap.² Health Savings Accounts are not on the federal list; the only way to shield HSA funds under the federal system is through the wildcard.

Retirement Accounts, Benefits, and Support Payments

Tax-qualified employer retirement plans, including 401(k)s, 403(b)s, and profit-sharing plans, are fully protected under § 522(d)(12) with no dollar limit.² Traditional and Roth IRAs are also protected but capped at $1,711,975 per person.¹ Amounts rolled over from an employer plan into an IRA do not count against the cap, and a bankruptcy court can raise it if fairness requires.

Social Security benefits, unemployment compensation, and local public assistance are fully exempt under § 522(d)(10)(A). Alimony, child support, and separate maintenance you receive are protected under § 522(d)(10)(D) to the extent reasonably necessary to support you and your dependents, which the trustee measures against your income and expenses.²

Legal Awards and Settlements

Crime victim reparation awards are fully exempt under § 522(d)(11)(A) with no cap.³ Personal injury payments are protected up to $31,575 under § 522(d)(11)(D), though that figure does not cover compensation for pain and suffering or for actual financial losses like lost wages.¹ Wrongful death awards and future earnings awards have their own protections to the extent you need the money for support.

Joint Filers Double Every Limit

When you and your spouse file jointly, § 522(m) applies the exemption rules separately to each of you. Every dollar amount doubles: the homestead becomes $63,150, the wildcard pool becomes $34,950, and so on. Both spouses must use the same system; one cannot pick federal while the other picks state.²

Claiming Your Exemptions

You claim exemptions on Schedule C (Official Form 106C), which you file with your bankruptcy petition. Each asset must be listed with the specific exemption subsection you are relying on.⁵ An asset you leave off may not be protected, so complete the schedule carefully.

Once you file, the trustee and your creditors have 30 days from the later of the meeting of creditors or any amendment to object to a claimed exemption.⁵ If no one objects in that window, the exemptions stand, even if a technical argument against them could have been made. You can amend Schedule C after filing, and the amendment restarts the 30-day clock for the new items.

Federal Exemption Limits at a Glance

The following figures apply to Chapter 7 cases filed between April 1, 2025, and March 31, 2028. The next inflation adjustment is scheduled for April 1, 2028.¹

Homestead, § 522(d)(1): $31,575 in equity in your primary residence
Motor vehicle, § 522(d)(2): $5,025 in equity in one vehicle
Household goods, § 522(d)(3): $800 per item, $16,850 total
Jewelry, § 522(d)(4): $2,125 in personal-use jewelry
Wildcard, § 522(d)(5): $1,675 of any property, plus up to $15,800 of unused homestead
Tools of the trade, § 522(d)(6): $3,175 in professional tools, books, or equipment
Life insurance policy, § 522(d)(7): full protection for the unmatured contract itself
Life insurance cash value, § 522(d)(8): $16,850 in accrued value or loan value
Health aids, § 522(d)(9): no dollar limit on prescribed health aids
Public benefits, § 522(d)(10)(A): full protection for Social Security, unemployment, and public assistance
Alimony and support, § 522(d)(10)(D): protected to the extent reasonably necessary
Crime victim awards, § 522(d)(11)(A): no dollar limit
Personal injury payments, § 522(d)(11)(D): $31,575
Retirement accounts, § 522(d)(12): no limit for 401(k)s, 403(b)s, and similar plans; $1,711,975 cap for traditional and Roth IRAs

1
Federal Register. Adjustment of Certain Dollar Amounts Applicable to Bankruptcy Cases
2
Office of the Law Revision Counsel. 11 USC 522 Exemptions
3
Office of the Law Revision Counsel. 11 U.S. Code 522 – Exemptions
4
Office of the Law Revision Counsel. 11 USC 522 Exemptions
5
Legal Information Institute. Rule 4003 Exemptions