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Chapter 7 Bankruptcy Exemptions

General Exemption Information

Chapter 7 bankruptcy code allows you to legally keep property or assets by claiming them as "exempt".

When you file chapter 7 bankruptcy, all of your property, whether real or personal, becomes owned by the "bankruptcy estate". However, the Trustee generally does not take actual (physical) possession of your property until after the Trustee files the "Property Exemption Report" in bankruptcy court.

Although you fill out and file a "Schedule C - Property Claimed as Exempt" form, your property is not exempt until the Trustee files the "Property Exemption Report". Once filed your property is then legally classified as "exempt" or "non-exempt".

NOTE: Should the Trustee erroneously list certain property as "non-exempt" when it should have been listed as "exempt", you must make an immediate objection, in writing because the report becomes final after 15 days.

Chapter 7 bankruptcy "Specific Property Exemptions"

The following exemptions are for informational purposes only. Always check the bankruptcy laws of your state and consult with a bankruptcy attorney to be sure.

  1. The combined value of up to $15,000 in value of real property or personal property that you or your dependent uses as a residence, or in a cooperative that owns property that you or your dependent use as a residence, or in a burial plot for you or your dependent;
  2. One motor vehicle up to $2,400 in value;
  3. Your interest up to $400 in value in any particular item or $8,000 in the combined value of household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, family, or household use of you or your dependent;
  4. The combined value up to $1,000 in value, in jewelry held primarily for the personal, family, or household use of you or your dependent;
  5. Your combined interest in any property, not to exceed $800 plus up to $7,500 of any unused amount of the exemption provided under paragraph 1 above;
  6. Your combined interest, not to exceed $1,500 in value, in any implements, professional books, or tools of the trade for you or your dependent;
  7. Any unmatured life insurance contract owned by you, other than a credit life insurance contract.
  8. Your combined interest, not to exceed value $8,000 less any amount of property of the estate transferred in the manner specified in section 542(d) of this title, in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by you that insures you or your dependent;
  9. Professionally prescribed health aids for you or your dependent;
  10. Your right to receive:
    • a social security benefit, unemployment compensation, or a local public assistance benefit;
    • veterans' benefit; disability, illness, or unemployment benefit;
    • alimony, support, or separate maintenance, to the extent reasonably necessary for the support of you and your dependents;
    • payment under a stock bonus, pension, profit sharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of you and your dependents.
  11. Your right to receive, or property that is traceable to:
    • an award under a crime victim's reparation law;
    • a payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;
    • a payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent on the date of such individual's death, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor;
    • a payment, not to exceed $15,000, on account of personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent; or
    • a payment in compensation of loss of future earnings of the debtor or an individual of whom the debtor is or was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.