What are bankruptcy exemptions?

Exemptions are laws that protect certain property from being taken by the bankruptcy trustee or creditors. They cover your home, car, personal belongings, retirement accounts, and other assets up to specified dollar limits. Exemptions determine what you keep in bankruptcy.

Can I lose my house in bankruptcy?

Not if your home equity falls within your state's homestead exemption. The exemption protects a certain dollar amount of equity in your primary residence. If your equity exceeds the exemption, the trustee could sell the home, but this is uncommon.

What is the homestead exemption?

The homestead exemption protects equity in your primary residence. Amounts vary dramatically by state, from under $10,000 in some states to unlimited in Texas, Florida, and Kansas. Some states require you to have owned and lived in the home for a minimum period.

Are retirement accounts protected in bankruptcy?

Yes. Most retirement accounts, including 401(k)s, 403(b)s, and IRAs, are fully protected in bankruptcy under federal law. Traditional and Roth IRAs are protected up to about $1.5 million (adjusted periodically). ERISA-qualified plans have unlimited protection.

What should I know before filing bankruptcy?

Bankruptcy is a legal process that can eliminate or restructure debts, but it has lasting effects on your credit and financial life. Before filing, understand which debts can be discharged, what property you can keep through exemptions, and which chapter fits your situation.

Your Bankruptcy Fresh Start

Practical guide to life after bankruptcy discharge

You Will Never Get Credit Again

False. Credit card offers arrive within weeks of discharge. Auto loans available in 1-2 years. FHA mortgages after 2 years (Chapter 7) or 1 year (Chapter 13).

Everyone Will Know

Public record, but virtually nobody checks. Employers rarely search. Neighbors and friends will not find out unless you tell them.

You Will Lose Everything

Most Chapter 7 filers keep all property. Exemptions protect your home, vehicle, retirement accounts, household goods. Most consumer cases are "no-asset" cases.

You Can Only File Once

You can file multiple times with waiting periods between discharges. Check your eligibility at 1328f.com.

Check your eligibility

Free Discharge Screener

Stay updated on new datasets and research findings

No spam. No marketing. Just data.

Related Resources

The Discharge Injunction - How Section 524 permanently bars creditor collection after discharge

Chapter 7 Discharge Bar - Eight-year bar between Chapter 7 discharges under Section 727(a)(8)

Hardship Discharge - Section 1328(b) discharge when you cannot complete your plan