Bankruptcy Exemptions – State & Federal Options

What Are Bankruptcy Exemptions?

When you file for bankruptcy, exemptions determine what property you can protect from being sold to repay creditors. Exemptions apply to specific types of property—such as your home, vehicle, retirement accounts, household goods, and personal items. The purpose is to ensure you can maintain a basic standard of living while getting a fresh financial start.

Exemptions are governed by law, and they vary widely from state to state.

• Federal exemptions are set by U.S. bankruptcy law and updated every three years.

• State exemptions are set by each state’s laws. Some states let you choose between federal and state exemptions; others require you to use the state list only.

Choosing the Right Exemption System

If your state allows you to choose between state and federal exemptions, selecting the right system can significantly impact how much property you keep. Factors include:

• The amount of home equity you have.

• Whether you own valuable personal property or vehicles.

• Whether you need a wildcard exemption for cash or other assets.

U.S. Bankruptcy Exemptions by State

Notes

• Choice states allow debtors to opt between state or federal exemptions. California is unique in offering two distinct state exemption schemes.

• Opt‑out states require use of state exemptions only; federal exemptions are not available.

• Florida stands out for its almost unlimited homestead exemption under state law.

• Texas is known for heritage-level homestead and property protections.

• The chart provides a high-level overview; for precise exemption amounts or additional categories (vehicles, wildcard, wages, retirement), it’s best to consult state statutes or a bankruptcy attorney.

Detailed Exemption Profiles

Pennsylvania (PA)

• System: Choice—state or federal (must pick one)Ascend Bankruptcy.

• Highlights:

  • No state homestead or vehicle exemption—filers often use federal exemptions to protect home equity ($31,575 single; $63,150 joint) and vehicle equity ($5,025)Upsolve+2usbankruptcyhelp.com+2.

  • State provides a small $300 wildcard plus exemptions for clothing, uniforms, sewing machines, retirement, public pensions, wages (75%), insurance proceeds, and benefitsrachelhunterlaw.com+2Bankruptcy Attorney Houston+2.

New Jersey (NJ)

• System: State-only (opt-out of federal) – must use NJ’s exemptions.

• Highlights: NJ has its own statutory exemptions covering limited categories like personal property, but generally does not allow federal exemptions.

Maryland (MD)

• System: State-only (opt‑out).

• Highlights: Maryland has a state homestead exemption ($25,150 in 2025), wildcard, and other asset protections, but federal exemptions are not permitted.

Florida (FL)

• System: State-only (opt-out)Wikipedia+1Upsolve+1.

• Highlights: Offers one of the strongest homestead protections—unlimited-value protection from forced sale under Florida Constitution; includes protection of sale proceeds if reinvested in a new homesteadusbankruptcyhelp.com+5Wikipedia+5austinbankruptcyattorney.com+5. Also includes personal property exemptions ($1,000 base, plus $4,000 if no homestead), vehicle ($1,000 equity), life insurance, annuities, retirement, wages, workers’ comp, unemployment, etc.Wikipedia.

Texas (TX)

• System: Choice—state or federal (must choose one)The Bankruptcy Site.

• Highlights:

  • State homestead exemption: Unlimited equity protection up to 10 acres (urban) or 100–200 acres (rural)austinbankruptcyattorney.com.

  • Personal property: $50,000 total for single filers; $100,000 jointaustinbankruptcyattorney.com+15Upsolve+15bankruptcy.justia.com+15.

  • No wildcard in the state systemUpsolve+1.

  • Federal wildcard (if using federal exemptions): up to $1,675 + $15,800 unused homestead equitytryascend.com+9Upsolve+9Upsolve+9.

Tennessee (TN)

• System: State-only (opt-out).

• Highlights: State exemptions include a homestead (e.g. $5,000 individual, $7,500 joint; higher for elderly/disabled), plus property and wage protections—but federal exemptions are not available.

Wyoming (WY)

• System: Choice—state or federal.

• Highlights: State exemptions include a homestead (e.g. $20,000 individual) and protections for personal and retirement property; filers must choose one system.

Arizona (AZ)

• System: State-only (opt-out).

• Highlights: State homestead exemption (~$400,000 as of 2025), plus personal property and retirement account protections; federal exemptions not allowed.

California (CA)

• System: State-only—but two state exemption systems available (System 1 and System 2).

• Highlights: System 1 typically offers larger homestead values; System 2 mirrors federal style exemption categories and includes a wildcard; filers choose between the two state systems.

Summary Table