What you pay creditors during Chapter 13, and the amount of property you can keep in a Chapter 7 case depend on the exemptions you claim. However, different exemptions exist under Federal laws and Bankruptcy Law in Tucson, and the exemption set you can use depends on your location. In this article, you will learn about the different exemptions and their use.

Federal Exemptions

Federal exemptions do not vary by state, and they allow you to retain a set amount of equity in your assets. Commonly-used exemptions include homestead exemption (used to keep home equity), the wildcard exemption and the automobile exemption. There are more federal exemptions which can protect other assets, from jewelry to retirement accounts.

State Exemptions

Along with the federal exemptions, each US state has its own rules. They are mostly similar to the federal exemptions, but amounts vary by state. Some states are very generous, while others do not offer very much protection. Before filing for bankruptcy, you and your lawyer should check your state’s rules.

Which Set of Exemptions can I Use?

The answer to this question depends on your state’s laws. Most states keep residents from using Federal exemptions; if you are in one of those states, you’ll have to abide by the state’s rules. In states allowing residents to choose, you must go with one system only–no mixing and matching.

Domicile Rules

According to bankruptcy law, your domicile is the state in which you live, vote and pay taxes. If you normally live in one state but are staying somewhere temporarily for work, your home state is your domicile. If your domicile has been constant for two years, you can use the state or Federal exemptions, whichever is allowable.

If you have not had a domicile in the same place for two years, you must use the state exemptions from the place where you were domiciled for most of the six months prior to the two years before your bankruptcy.





If you cannot qualify for a state’s exemptions under these rules, you can use Federal exemptions. Those needing help with filing for Chapter 7 or 13 should call a bankruptcy lawyer at Neff & Griffitn, P.C. in Tucson.