Federal Non-bankruptcy Exemptions vs. State Exemptions

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

UPDATED: Jul 15, 2021

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Although states can opt out of most federal bankruptcy exemptions, some are mandatory. These exemptions are available to everyone who is using his or her state’s exemptions, and are not available to anyone using the federal exemptions or the second California state option (which is very like the federal exemptions).

These exemptions are called non-bankruptcy exemptions, because they are found in areas of the United States Code other than the Bankruptcy Code. All of the bankruptcy exemptions are complete exemptions, not exemptions of a specified amount, except for the provision that at least 75% of wages will be exempt. If your state also specifies that a certain percentage of wages will be exempt, you don’t get to add the percentages together. You can choose whichever amount is higher.

Non-bankrputcy Exemptions
Asset Exemption US Code Section
Death and Disability Benefits for: Longshoreman and harbor workers 33 § 916
  Risk, hazard, death, or injury of War 42 § 1717
  Government employees 5 § 8130
Retirement Benefits for: Civil service employees 5 § 8346
  Military service employees 10 § 1440
  Foreign Service employees 22 § 4060
  Veterans 38 § 5301
  Military Medal of Honor roll 38 § 1562(c)
  Railroad workers 45 § 231m
  Social Security recipients 42 § 407
Survivor’s Benefits for: Military service 10 § 1450
  US judicial employees including judges, center directors, and administrative assistants to the US Supreme Court Chief Justice 28 § 376
  Lighthouse workers 33 § 775
Miscellaneous Military deposits made in savings accounts while the debtor was on permanent duty outside the US. 10 § 1035
  A minimum of 75% of weekly disposable wages or 30 times the federal hourly wage, whichever is greater. The bankruptcy judge may allow more for a debtor with a low income. 15 § 1673
  Indian lands, or proceeds from the sale of a homestead or lease. 25 § 410
  Benefits for Klamath Indians residing in Oregon. 25 §§ 543, 545
  Military group life insurance. 38 § 1970(g)
  Unemployment insurance benefits for railroad workers. 45 352(e)
  Wages for a seaman made under a written contract while the debtor was on a voyage. 46 § 11109
  Clothing of a seaman. 46 § 11110

Click here to read an Introduction to Bankruptcy Exemptions.

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