What Are Federal Bankruptcy Exemptions?

: Reese Baker & Associates

  Filed under: Filing bankruptcy

federalExemptions are handled a little differently depending on whether you are in a chapter 7 or chapter 13 bankruptcy, and depending on your state of residence. Whether you choose Texas bankruptcy exemptions or exemptions under Federal law, no matter what State you live in. These exemptions allow you keep specific types and amounts of property in the Chapter 7 bankruptcy. In the Chapter 13 bankruptcy the exemptions can help determine how much you will have to pay to some of the creditors.

Property Protection Laws

Every three years in April the Federal exemption amounts are adjusted. The next time this will occur will be in April 2016. There is a list available of the Federal exemptions. Your bankruptcy lawyer should have this, and he will advise you which ones are applicable to you based on your circumstances.

One significant exemption is the Homestead exemption. You cannot use this towards property investments. This particular exemption will protect up to $22,975 worth of equity in your home. Even though there are Federal exemptions in place it may be that your State has rulings in place where you have to use the exemptions that have been allowed for the state you are filing in. Then there are some States that will give you the option to choose to use either the State or Federal exemptions but you cannot use both.

There are personal property exemptions, exemptions related to support payments and benefits you may be receiving, exemptions on recovery based on personal injury, wildcard exemption, and retirement amounts exemptions.