Appendix A Federal and State Exemption Tables

• Library: Chapter 13 Bankruptcy (Nolo) (2020 Ed.)

APPENDIX A: Federal and State Exemption Tables

Doubling

Wage Garnishment Laws and Exemptions in Bankruptcy

What Income Is Exempt?

Checking the Law in Your State

Retirement Accounts

Confirm the Exemptions Before Relying on Them

Alabama

Alaska

Arizona

Arkansas

California—704 System

California—703 System

Colorado

Connecticut

Delaware

District of Columbia

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

Federal Bankruptcy Exemptions

Federal Nonbankruptcy Exemptions

The charts in this appendix are divided into categories of property, such as insurance, personal property, and wages. Following each exemption, we provide the numerical citation to the state statute that includes the exemption.

The states are listed alphabetically, followed by the federal exemptions. We also note which states allow you to choose between the federal and state bankruptcy exemptions.

RELATED TOPIC

Need help understanding a term? Many of the categories, types of property, and other terms used in these charts are defined in the Glossary, which you'll find right before this appendix.

Doubling

When a married couple files for bankruptcy jointly, federal law and the laws of some states allow them each to claim the full amount of an exemption. (11 U.S.C. § 522.) Because a couple gets to claim twice the amount available to those who file alone, this practice is informally known as "doubling."

Not all states allow doubling, however. And some states allow married filers to double only certain exemptions (for example, they might be allowed to double personal property exemptions but not the homestead exemption). In the charts that follow, we indicate exemptions that cannot be doubled and states that don't allow doubling at all. Unless you see a note stating that you cannot double, assume that you can.

Wage Garnishment Laws and Exemptions in Bankruptcy

Almost all states have a wage garnishment law that applies to judgment creditors, limiting how much they can take from your paycheck. In most states, you can use legally protected amounts under the wage garnishment law as an exemption in bankruptcy. Some states, however, don't allow this. If your state doesn't let bankruptcy filers use the wage garnishment law as an exemption, we indicate that on the chart. Some states have a specific statute that exempts a portion of wages in bankruptcy—obviously, you can use this in bankruptcy.

The federal bankruptcy exemptions do not have a separate exemption for wages. If you use the federal exemptions (assuming your state gives you a choice), the only way you can protect wages is by using the wildcard exemption.

What Income Is Exempt?

In most states, the wage garnishment law will allow you to protect income that was already earned but not yet received on the day you filed for bankruptcy—called "earned but unpaid wages."

In some states, the wage garnishment exemption also protects wages you received before you filed for bankruptcy (it's easiest to claim the exemption if these wages are not mixed with other funds). In other states, the wage garnishment exemption does not protect wages that you received before filing for bankruptcy.

Some state exemptions protect all kinds of "earnings," regardless of type, while others protect only wages for the "performance of services," and exclude other kinds of income.

Checking the Law in Your State

Before relying on a wage garnishment statute to protect your wages, make sure that the judge in your jurisdiction agrees that the garnishment statute creates an exemption that can be used in bankruptcy. Often, the best way to do this is to ask a local bankruptcy attorney. (Many provide free initial consultations.)

You can also find information about this issue on www.legalconsumer.com. It tracks a dozen or so collected cases on wage garnishment and bankruptcy (search for "Do wage garnishment laws create an exemption in bankruptcy?").

Retirement Accounts

Virtually all types of tax-exempt retirement accounts are exempt in bankruptcy, whether you use the state or federal exemptions. You can exempt 401(k)s, 403(b)s, profit-sharing and money purchase plans, IRAs (including Roth, SEP, and SIMPLE IRAs), and defined-benefit plans.

These exemptions are unlimited—that is, the entire account is exempt, regardless of how much money is in it—except in the case of traditional and Roth IRAs. For these types of IRAs only, the exemption is limited to a total value of $1,362,800 per person (this figure will be adjusted every three years for inflation). If you have more than one traditional or Roth IRA, you don't get to exempt $1,362,800 per account: Your total exemption, no matter how many accounts you have, is $1,362,800.

If you are using the federal bankruptcy exemptions, you can find this new retirement account provision at 11 U.S.C. § 522(d)(12). If you are using state exemptions, cite 11 U.S.C. § 522(b)(3)(C) as the applicable exemption when you complete your bankruptcy papers.

Confirm the Exemptions Before Relying on Them

The exemptions in the following charts were current when this book went to press, but your state may have changed the law since then. Also, states often carve out exceptions to the exemptions, which are far too detailed to list here. For instance, even if an item is listed as exempt in one of these charts, you might have to give it up to pay child support or a tax debt.

Before relying on any particular exemption, consider:

• reading the exemption statute yourself, using the research information in Ch. 11, and
• cross-checking the chart's information against the exemptions for your state listed on www.legalconsumer.com.

Last, but certainly not least, consult with a bankruptcy lawyer.

CAUTION

These charts provide general information only. There are exceptions to state exemption laws that are much too detailed to include here. Consider doing further legal research or consulting an attorney about the exemptions you plan to claim, particularly if you anticipate—or are facing—a challenge to your exemption claims.

Alabama

Federal bankruptcy exemptions not available. All law references are to Alabama Code unless otherwise noted.

ASSET	EXEMPTION	LAW
homestead	Real property or mobile home to $15,500; property cannot exceed 160 acres	6-10-2
	Must record homestead declaration before attempted sale of home	6-10-20
insurance	Annuity proceeds or avails to $250 per month	27-14-32
	Disability proceeds or avails to an average of $250 per month	27-14-31
	Fraternal benefit society benefits	27-34-27
	Life insurance proceeds or avails	6-10-8; 27-14-29
	Life insurance proceeds or avails if clause prohibits proceeds from being used to pay beneficiary's creditors	27-15-26
	Mutual aid association benefits	27-30-25
pensions	Tax-exempt retirement accounts, including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined-benefit plans	11 U.S.C. § 522(b)(3)(C)
	Traditional and Roth IRAs to $1,362,800 per person	11 U.S.C. § 522(b)(3)(C); (n)
	IRAs, Roth IRAs and other retirement accounts	19-3B-508
	Judges (only payments being received)	12-18-10(a),(b)
	Law enforcement officers	36-21-77
	Spendthrift trusts (with exceptions)	19-3B-501 to 503
	State employees	36-27-28
	Teachers	16-25-23
personal property	Books of debtor and family	6-10-6
	Burial place for self and family	6-10-5
	Church pew for self and family	6-10-5
	Clothing of debtor and family	6-10-6
	Family portraits or pictures	6-10-6
public benefits	Aid to blind, aged, disabled and other public assistance, including earned income tax credit (In re James, 406 F. 3d 1340 (11th Cir 2005))	38-4-8; 38-5-5
	Crime victims' compensation	15-23-15(e)
	Southeast Asian War POWs' benefits $500	31-7-1; 31-7-2
	Unemployment compensation	25-4-140
	Workers' compensation	25-5-86
tools of trade	Arms, uniforms, equipment that state military personnel are required to keep	31-2-78
wages	With respect to consumer loans, consumer credit sales and consumer leases, 75% of weekly net earnings or 30 times the federal minimum hourly wage; all other cases, 75% of earned but unpaid wages; bankruptcy judge can authorize more for low-income debtors	5-19-15; 6-10-7
wildcard	$7,750 of any personal property, except wages	6-10-6; 6-10-126

Alaska

Alaska exemption amounts are adjusted regularly by administrative order. Current amounts are found at 8 Alaska Admin. Code tit. 8, § 95.030.

ASSET	EXEMPTION	LAW
homestead insurance	$72,900 (joint owners can each claim a portion, but total can't exceed $72,900)	09.38.010(a)
	Disability benefits	09.38.015(b); 09.38.030(e)(1),(5)
	Fraternal benefit society benefits	21.84.240
	Life insurance or annuity contracts, total avails to $500,500	09.38.025
	Medical, surgical, or hospital benefits	09.38.015(a)(3)
miscellaneous	Alimony, to extent wages exempt	09.38.030(e)(2)
	Child support payments made by collection agency	09.38.015(b)
	Liquor licenses	09.38.015(a)(7)
	Property of business partnership	09.38.100(b)
pensions	Tax-exempt retirement accounts, including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined-benefit plans	11 U.S.C. § 522(b)(3)(C)
	Traditional and Roth IRAs to $1,362,800 per person	11 U.S.C. § 522(b)(3)(C); (n)
	Elected public officers (only benefits building up)	09...