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Bankruptcy Exemptions
Always consult bankruptcy counsel for proper exemption counseling. These choices need extensive expertise, so that the situation of a bankruptcy can best utilize the exemptions available.
Every state does not permit the use of federal exemptions. Some states have "opted-out" of the system. Although the Bankruptcy Code is federal, Congress specifically permitted this opt-out of the federal bankruptcy exemption scheme.
Sometimes, a debtor may want to choose the state exemptions out of choice. For example, Pennsylvania law includes tenancy- by- the-entireties. Tenants-by-the-entireties covers personal property such as bank accounts and in fact, anything acquired by the spouses for use in a home owned in the entireties. "Entireties" ownership means husband/wife joint ownership. However, while it is an unbreakable unity and is unassailable by any creditor of either spouse, it does not hold true when both spouses owe the debt jointly.
Bankruptcy Exemptions Under Federal Law (Sec. 522)
| Section
| Description
| Max Amount
| Joint Amount
| | 522(d)(1)
| Real property or personal property used as a residence (e.g. a trailer).
| $20,200
| $40,400
| | 522(d)(2)
| Debtor's interest in one motor vehicle.
| $3,225
| 6,450
| | 522(d)(3)
| Household goods, clothing, appliances, animals, crops, musical instruments for family use, not to exceed $525 in any one item.
| $10,775
| $21,550
| | 522(d)(4)
| Jewelry for personal or family use.
| $1,350
| $2,700
| | 522(d)(5)
| Aggregate interest in any property, not to exceed $975 in value plus $9,250 of unused amount of exemption under 522(d)(1).
| $11,200
| $22,440
| | 522(d)(6)
| Implements, professional books, tools of trade.
| $2,025
| $4,050
| | 522(d)(7)
| An unmatured life insurance contract of debtor other than credit life.
| n/a
| n/a
| | 522(d)(8)
| Unmatured life contract's accrued dividend .
| $10,775
| $21,550
| | 522(d)(9)
| Professionally prescribed health aids.
| n/a
| n/a
| | 522(d)(10)
| Debtor's right to receive social security, veteran's benefits, disability, illness and unemployment benefits, alimony, support or maintenance to extent reasonably necessary for the support of debtor and dependents. Also a payment under a stock bonus, pension profit-sharing, annuity or similar plan on account of illness disability, death, age or length of service to the above extent.
| n/a
| n/a
| | 522(d)(11)(d)
| Rights to receive bodily injury payment for pain & suffering or actual pecuniary loss.
| $20,200
| x
| | x
| x
| x
| x
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