Homestead exemption

How it works

Equity is the value of your interest in the home that remains after liens, such as a mortgage, are taken into account. The homestead exemption keeps some or all of that equity away from unsecured creditors. 1

How much is protected depends on where you live. Depending on state law, a filer may be able to choose between the federal exemption list and the state list, or may be limited to the state list. The federal homestead exemption is $31,575 for cases filed on or after April 1, 2025. State amounts are different, so check the current figure for your state with a lawyer or your court. 2 1

There is a federal cap on recently acquired home equity. A filer who uses state exemptions cannot protect more than $214,000 of interest in a home that was acquired during the 1,215 days before filing, for cases filed on or after April 1, 2025. Equity moved from an earlier main home in the same state, bought before that period, is not counted. 2

Equity above the exemption is not protected. In Chapter 7, a trustee may sell nonexempt property and pay the proceeds to creditors. 3