Bankruptcy offers different exemption systems for debtors who file. In Chapter 13 bankruptcy exemptions may help determine what payment arrangements are created for your repayment plan. In Chapter 7 bankruptcy they can offer protection of assets from creditors. In most cases, the exemptions you are eligible for will depend on the state you reside in. They are available at different levels including state and federal, with rules depending on length of residency.
Federal exemptions provide protection of various assets but often provide the same amount for each state. The homestead exemption is a common exemption used at the federal level that helps protect equity in your home. Other exemptions commonly used by debtors include the automobile exemption and exemptions for retirement accounts. The wildcard exemption is also common since it can provide additional protection for various assets not fully protected under state exemptions.
State exemptions can offer protection for various assets but the amounts vary from one state to another. They offer protection for a variety of assets like the federal exemption, but there are laws that should be reviewed upon filing to understand the amounts. Some states offer more protection than others on certain assets.
So when determining which exemptions you can use it's depends on where you reside, also known as your domicile. Some states may limit the amount of federal exemptions utilized, while others allow residents to be flexible with their options. Keep in mind, your domicile is where you consider your permanent home or place of residence. If you live in one state and work in another or recently moved from one state to another, this could affect which exemptions you are eligible for. Discuss questions and concerns with your bankruptcy attorney.