Open Bankruptcy Project
Federal Bankruptcy Exemptions — 11 U.S.C. § 522(d)
Educational reference on the federal bankruptcy exemptions under 11 U.S.C. § 522(d). The federal exemption scheme protects specified categories of property from creditor reach in bankruptcy. The protection scales with the debtor's needs and is adjusted for inflation every three years.
The federal exemption scheme
Section 522(d) sets dollar caps for several categories of property a debtor may protect from creditors:
- Homestead: the debtor's residence (cap)
- Motor vehicle: one car (cap)
- Household goods: furniture, appliances, clothing, etc. (per-item and aggregate caps)
- Jewelry: separate cap
- Wildcard: "any property" exemption that the debtor can apply to anything not otherwise exempt
- Tools of trade: implements/professional books
- Life insurance: unmatured life insurance contract
- Health aids: prescribed health aids
- Crime-victim awards / wrongful-death recoveries
- Personal injury recovery: up to a statutory cap
- Retirement funds: generally protected without dollar cap (separate § 522(b)(3)(C) and (n) provisions)
The triennial COLA cycle
The dollar amounts in § 522(d) are adjusted for inflation every three years under § 104. The adjustment cycle:
- April 1, 2022: previous COLA adjustment
- April 1, 2025: most recent COLA adjustment
- April 1, 2028: next scheduled adjustment
Between cycles, the dollar caps are static. They do NOT adjust annually with the federal poverty line, Social Security COLA, or Consumer Price Index in any other way. The 3-year cycle is the only inflation mechanism for § 522(d).
Federal vs. state exemption schemes
Section 522(b) gives debtors a choice: federal exemptions (§ 522(d)) OR state exemptions, depending on the state. There are three regimes:
- Opt-out states (~41 states): the state has opted out of the federal scheme. Debtors must use that state's own exemption laws.
- Opt-in states (~17 states): the state allows debtors to choose between state and federal exemptions.
- D.C. and U.S. territories: separate rules apply.
Whether a state is opt-out or opt-in is a function of state legislation under § 522(b)(2)/(b)(3).
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