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Property you keep
Exempt property
Exempt property is property an individual debtor is allowed to keep in bankruptcy, free from the claims of creditors who do not have liens on it. 1
Talk to a lawyerHow does exempt property work in bankruptcy?
The protection comes from the Bankruptcy Code or from state law. Many states have adopted their own exemption law in place of the federal exemptions, while in other places a debtor can choose between the federal exemptions and those under state law. Whether an item is exempt is therefore often a question of state law. 1 2
Which state's law applies depends on where the debtor's domicile has been for the 730 days before filing, not simply on where the debtor lives on the filing date. 3
Exempt status has to be claimed on Schedule C. Unless a party in interest objects, the property on that list is exempt; property left off it may be sold by the trustee. 3 4
Exempt does not mean free of liens. Exempt property stays liable for a debt secured by a lien that was not avoided and for a properly filed tax lien, although a debtor can remove certain judicial liens to the extent they impair an exemption. 3
What is the difference between exempt and nonexempt property?
| Topic | Exempt property | Nonexempt property |
|---|---|---|
| What happens to it 1 2 | The debtor keeps it, free from creditors who have no lien on it 1 2 | The trustee may sell it and pay the proceeds to creditors 1 2 |
| Examples on the federal list 3 | A home, a vehicle, household goods, tools of the trade, benefits such as Social Security and tax-exempt retirement funds, most up to a dollar limit 3 | Property no exemption covers 3 |
| Property with a lien 3 2 | A lien that was not avoided can still reach it 3 2 | The trustee sells it if it is worth more than the liens on it plus any exemption 3 2 |
State exemption lists differ. A lawyer in your state can tell you which list applies.
Common questions
Is the amount of exempt property the same everywhere?
No. It depends on the exemptions that apply to you. As one example, the federal homestead exemption is $31,575 for cases filed on or after April 1, 2025. 3
Can someone challenge my exemptions?
Yes. A trustee or creditor may object, generally within 30 days after the 341 meeting of creditors ends or after a later amendment to the list. 1
Can a creditor take exempt property after bankruptcy?
Generally not for debts from before the case. Exempt property stays liable for domestic support obligations, certain taxes that are not discharged, debts secured by a lien that was not avoided, and properly filed tax liens. 3
Sources
Not sure what you could keep?
A bankruptcy lawyer in your state can go through the exemptions that apply to you.
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