When a debtor files for Chapter 7 bankruptcy, he will submit a list of property he wishes to keep and withhold from the bankruptcy estate. Such property is called an "exemption." The types and amount of exemptions allowed vary according to federal and state law. By far, the most important exemption to most debtors is the homestead exemption. A homestead exemption is the amount of equity in the debtor's primary residence that he is allowed to keep. The federal bankruptcy homestead exemption is $20,200 for bankruptcies filed after April 1, 2005. However, state homestead exemptions vary greatly. Though states may allow their citizens to use a State, rather than federal, homestead exemption, federal law dictates that a state homestead exemption cannot exceed $125,000 if the home was purchased during the 1,215 days leading up to the bankruptcy filing.
Additionally, though the U.S. Bankruptcy Code allows debtors to choose between the federal or applicable state homestead exemptions, the states were allowed to opt-out of this framework and require their residents to use the state homestead exemption. The current law regarding homestead exemptions in each state is as follows:
State |
State Exemption Amount in Equity |
State or Federal Exemption |
|
Alabama |
Up to $5,000 and 160 acres |
State only |
|
Alaska |
Up to $67,500 |
State or Federal |
|
Arizona |
Up to $150,000 |
State only |
|
Arkansas |
Up to $2,500 and 16 acres |
State or Federal |
|
California |
Varies under two exemption schemes |
State only |
|
Colorado |
Up to $45,000 |
State only |
|
Connecticut |
$18,450 |
State or federal |
|
Delaware |
Up to $20,200 |
State only |
|
District of Columbia |
Unlimited |
D.C or federal |
|
Florida |
Can keep property unless more than .5 acre in municipality or 160 acres in rural area |
State only |
|
Georgia |
Up to $5,000 |
State only |
|
Hawaii |
Up to $20,000/1 acre |
Choose from two state schemes |
|
Idaho |
Up to $50,000 |
State only |
|
Illinois |
Up to $7,500 |
State only |
|
Indiana |
Up to $7,500 |
State only |
|
Iowa |
Up to $125,000 |
State only |
|
Kansas |
Up to $125,00/160 acres |
State only |
|
Kentucky |
Up to $5,000 |
State only |
|
Louisiana |
Up to $25,000 |
State only |
|
Maine |
Up to $35,000 or $70,00 if dependents also reside in home |
State only |
|
Maryland |
Up to $5,000 aggregate with personal property |
State only |
|
Massachusetts |
Up to $20,200 or $500,000 |
State or federal |
|
Michigan |
Up to $20,200 or $3,500 |
State or federal |
|
Minnesota |
Up to $20,200 or $200,000 ($500,000 if agricultural) |
State or federal |
|
Mississippi |
Up to $75,000/160 acres |
State only |
|
Missouri |
Up to $15,000 |
State only |
|
Montana |
Up to $100,000 |
State only |
|
Nebraska |
Up to $12,500/160 acres |
State only |
|
Nevada |
Up to $350,000 |
State only |
|
New Hampshire |
Up to $100,000 |
State or federal |
|
New Jersey |
Up to $20,200 |
State or federal |
|
New Mexico |
Up to $30,000 |
State or federal |
|
New York |
Up to $50,000 |
State only |
|
North Carolina |
Up to $18,500 |
State only |
|
North Dakota |
Up to $80,000 |
State only |
|
Ohio |
Up to $5,000 |
State only |
|
Oklahoma |
Up to $125,000 |
State only |
|
Oregon |
Up to $30,000 |
State only |
|
Pennsylvania |
Up to $20,200 |
State or federal |
|
Rhode Island |
Up to $200,000 |
State or federal |
|
South Carolina |
Up to $50,000 |
State only |
|
South Dakota |
Up to $30,000/160 acres |
State only |
|
Tennessee |
Up to $5,000 |
State only |
|
Texas |
Your home |
State or federal |
|
Utah |
Up to $20,000 |
State only |
|
Vermont |
Up to $75,000 |
State or federal |
|
Virginia |
Up to $5,000 |
State only |
|
Washington |
Up to $40,000 |
State or federal |
|
West Virginia |
Up to $25,000 |
State only |
|
Wisconsin |
Up to $40,000 |
State or federal |
|
Wyoming |
Up to $10,000 |
State only |
For a complete listing of all property exemptions in each state, as well as detailed state residency requirements, contact your local bankruptcy court.
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