Federal Bankruptcy Exceptions

There are both federal laws and state laws that apply to bankruptcy and each set of laws has its own bankruptcy exemptions. The federal government makes its federal bankruptcy exemptions available to anyone who files Chapter 7 bankruptcy regardless of what state they file in. But, each state has the right to restrict its residents to using the state exemptions, having “opted out” of the federal bankruptcy exemptions. New York State has “opted in” and now there is a choice if you file in New York.

The federal bankruptcy exemption amounts increased on April 1, 2019. Every three years, bankruptcy code figures are subject to change, including the federal bankruptcy exemption amounts. Here are the federal exemption limits for bankruptcy cases filed on or after April 1, 2019:

• Equity in residential property. $23,675 increases to $25,150. (11 U.S.C. § 522(d)(1).)
• Equity in one motor vehicle. $3,775 increases to $4,000, (11 U.S.C. § 522(d)(2).)
• Interest in household goods and furnishings. This exemption includes wearing apparel, appliances, books, animals, crops, and musical instruments. The $600 per item amount increases to $625 and $12,625 aggregate value increases to $13,400. (11 U.S.C. § 522(d)(3).)
• $1,600 increases to $1,700. (§ 522(d)(4))
• Wildcard exemption. The general wildcard amount of $1,250 increases to $1,325, and $11,850 of unused residential property exemption amount increases to $12,575. (11 U.S.C. § 522(d)(5).)
• Tools of the trade. $2,375 increases to $2,525 (11 U.S.C. § 522(d)(6).)
• Unmatured life insurance. $12,625 increases to $13,400. (11 U.S.C. § 522(d)(8).)
• Personal bodily injury award. $23,675 increases to $25,150. (11 U.S.C. § 522(d)(11)(D).)
• Lien avoidance limit. $6,425 increases to $6,825. (11 U.S.C. § 522(f)(3).)
• Maximum IRA limits. $1,283,025 increases to $1,362,800. (11 U.S.C. § 522(n).)
• Qualified homestead exemption. $160,375 increases to $170,350. (11 U.S.C, § 522(p).)
• State homestead exemption. $160,375 increases to $170,350. (11 U.S.C. § 522(q).)
• Education IRA funds. $6,425 increases to $6,825. (11 U.S.C. § 541(b)(5)(C).)
• Pre-purchased tuition credits. $6,425 increases to $6,825. (11 U.S.C. § 541(b)(6)(C).)
• Qualified ABLE program funds. $6,425 increases to $6,825. (11 U.S.C. § 541(b)(10)(C).)

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