Exemptions in Bankruptcy are limits to how much value a person filing bankruptcy can retain in certain categories of assets without having those assets liquidated by a Trustee in a Chapter 7 Bankruptcy, or having to make payments to creditors toward the liquidation of debts as part of a Chapter 13 Bankruptcy.
Every three years, periodic adjustments are made to these dollar limits for the exemptions contained in the Bankruptcy Code. Effective April 1, 2025, the 2025 adjustments reflect a 13.2% increase in various dollar amounts. This means that debtors who file bankruptcy should be able to retain more assets than before.
Key changes for 2025 include:
- Homestead Exemption (11 U.S.C. § 522(d)(1)) – Increased from $27,900 to $31,575.
- Motor Vehicle Exemption (11 U.S.C. § 522(d)(2)) – Increased from $4,450 to $5,025.
- Household Goods Exemption (11 U.S.C. § 522(d)(3)) – Per item limit increased from $700 to $800, and the aggregate limit increased from $14,875 to $16,850
- Jewelry Exemption (11 U.S.C. § 522(d)(4)) – Increased from $1,875 to $2,125.
- Wildcard Exemption (11 U.S.C. § 522(d)(5)) – The standard amount increased from $1,475 to $1,675, and the unused homestead portion increased from $13,950 to $15,800.
- Tools of the Trade (11 U.S.C. § 522(d)(6)) – Increased from $2,800 to $3,175.
- Personal Injury Recovery Exemption (11 U.S.C. § 522(d)(11)(D)) – Increased from $27,900 to $31,575.
If you are struggling with unsecured debt (such as credit cards, medical bills, signature loans) and would like more information about what you can keep in bankruptcy, call Fred Simon Law at (502) 558-8576.