Bankruptcy by State: Exemptions, Courts, and Key Differences

Bankruptcy is federal law, but the property you keep depends almost entirely on where you live. This guide covers exemptions, court links, median income data, and critical differences across all 50 states and the District of Columbia.

1. Why Your State Matters in Bankruptcy

Bankruptcy is governed by federal law -- Title 11 of the United States Code. Every bankruptcy case in every state follows the same Bankruptcy Code, the same Federal Rules of Bankruptcy Procedure, and the same basic structure. But Congress made one enormous carve-out: exemptions.

Exemptions determine what property you get to keep when you file bankruptcy. In Chapter 7, the trustee can sell any non-exempt property to pay creditors. In Chapter 13, the value of your non-exempt property sets the floor for how much you must pay unsecured creditors through your plan. Either way, exemptions are the single most important variable in determining what bankruptcy actually costs you.

And exemptions vary wildly from state to state. A homeowner in Texas or Florida can protect an unlimited amount of home equity. The same homeowner in Alabama can protect only $5,000. A debtor in Kansas can shield a 160-acre homestead from creditors entirely. A debtor in New Jersey is capped at zero under state law (though New Jersey allows the federal exemptions, which include a $27,900 homestead exemption).

Beyond exemptions, your state also determines:

• Median income thresholds -- The means test under 11 U.S.C. Section 707(b) compares your income to your state's median. States with high median incomes (Connecticut, New Jersey, Maryland) set a higher bar for Chapter 7 qualification. States with low median incomes (Mississippi, West Virginia, Arkansas) set a lower one.
• Which bankruptcy court hears your case -- Each state has one to four federal judicial districts, each with its own bankruptcy court, local rules, filing procedures, and judicial culture.
• Local legal culture -- Trustee aggressiveness, typical attorney fees, and judicial attitudes toward debtors vary significantly by district.
• Chapter 13 plan length -- Below-median-income debtors can propose 36-month plans. Above-median debtors must commit to 60 months. Since median income varies by state, the same income could mean a 3-year plan in one state and a 5-year plan in another.

The practical impact is significant. Two people with identical debts, identical assets, and identical incomes can have completely different bankruptcy outcomes based solely on which state they live in. One may keep their home; the other may lose it. One qualifies for Chapter 7; the other does not. Understanding your state's specific rules is not optional -- it is the foundation of any competent bankruptcy analysis.

2. Federal vs. State Exemptions

The Bankruptcy Code provides its own set of exemptions at 11 U.S.C. Section 522(d). These federal exemptions include a homestead exemption of $27,900, a motor vehicle exemption of $4,450, a wildcard exemption of $1,475 plus up to $13,950 of unused homestead exemption, and various other protections for household goods, jewelry, tools of the trade, and retirement accounts. These amounts are adjusted for inflation every three years; the current figures took effect on April 1, 2022.

However, Section 522(b)(2) allows each state to pass a law prohibiting its residents from using the federal exemptions. About 30 states have done this -- they have "opted out" of the federal scheme. In those states, debtors must use the state exemption schedule, period.

The remaining states -- roughly 20 -- allow debtors to choose. You can use either the federal exemptions or the state exemptions, whichever protects more of your property. But you must choose one system or the other. You cannot mix and match, taking the homestead exemption from one system and the vehicle exemption from the other.

When Federal Exemptions Are Better

The federal exemptions tend to benefit debtors who:

• Do not own a home -- The federal wildcard exemption lets you convert up to $13,950 of unused homestead exemption into a general-purpose wildcard. A renter can protect up to $15,425 ($1,475 base wildcard + $13,950 unused homestead) of any property. Many state wildcard exemptions are far less generous.
• Have modest home equity but significant personal property -- The federal system's balanced approach may protect more total value than a state system with a high homestead but weak personal property exemptions.
• Live in states with very low state exemptions -- States like New Jersey, Maryland, and Pennsylvania have weak state exemption schemes, making the federal alternative almost always the better choice for residents of those states.

When State Exemptions Are Better

State exemptions tend to benefit debtors who:

• Own significant home equity -- States like Massachusetts ($500,000), Nevada ($605,000), and Minnesota ($450,000) far exceed the federal homestead exemption. If you have substantial equity in your home, a generous state homestead exemption may be the only way to keep it.
• Live in states with unlimited homestead exemptions -- Texas, Florida, Kansas, Iowa, South Dakota, and Oklahoma all offer unlimited-dollar homestead exemptions (subject to acreage limits). The federal exemption cannot compete with this.
• Have state-specific protections -- Some states offer unusually generous exemptions for specific property types: retirement accounts, wages, tools of the trade, or personal injury claims that exceed federal levels.

3. 50-State Exemption Overview

The table below summarizes key exemption amounts for all 50 states and the District of Columbia. All figures represent per-debtor amounts (married couples filing jointly may be able to double some exemptions). Homestead amounts are for individuals unless noted. Median income figures are for a one-person household from the most recent U.S. Census / DOJ data.

* California offers two mutually exclusive exemption systems ("System 1" and "System 2"). System 1 includes the large homestead exemption. System 2 has no homestead exemption but includes a much larger wildcard. Debtors must choose one system.

4. States with Unlimited Homestead Exemptions

Six states offer homestead exemptions with no dollar limit, meaning you can protect any amount of equity in your primary residence. These are some of the most debtor-friendly jurisdictions in the country for homeowners.

Texas

Texas is widely considered the most debtor-friendly state in the country. The Texas homestead exemption has no dollar cap -- only acreage limits (10 acres in a city, 100 acres in rural areas for a single person, 200 for a family). Texas also exempts one motor vehicle per licensed household member with no value cap, plus a $50,000 personal property wildcard ($100,000 for families). Texas allows the federal exemptions as an alternative, but most homeowning debtors will prefer the state system.

Texas Property Code Sections 41.001 -- 41.002 govern the homestead exemption.

Florida

Florida's homestead exemption has no dollar limit but is restricted to half an acre within a municipality or 160 acres outside one. Florida's Constitution (Article X, Section 4) protects the homestead, and the protection extends beyond bankruptcy to judgment creditors as well. However, Florida's non-homestead exemptions are relatively modest: only $1,000 for a vehicle and $4,000 in wildcard (available only to debtors who do not claim the homestead).

Kansas

Kansas allows an unlimited homestead exemption for property up to 1 acre in a city or 160 acres on a farm. Kansas Statutes Section 60-2301. Kansas also has one of the most generous vehicle exemptions at $20,000 per vehicle. Kansas does not allow the federal exemptions.

Iowa

Iowa's homestead exemption has no dollar limit but is restricted to half an acre in a city or 40 acres outside one. Iowa Code Section 561.2. Iowa's vehicle exemption is $7,000, and the wildcard is $1,000. Iowa does not allow federal exemptions.

South Dakota

South Dakota protects an unlimited-value homestead on up to 1 acre in a town or 160 acres in the country. South Dakota Codified Laws Section 43-31-1. South Dakota has no separate vehicle exemption and no federal election, but offers a $6,000 wildcard.

Oklahoma

Oklahoma's homestead exemption has no dollar limit, covering up to one-quarter acre in a city or 160 acres in rural areas. Oklahoma Statutes Title 31, Section 2. Oklahoma also provides a $7,500 vehicle exemption but has no wildcard and does not allow the federal exemptions.

5. States That Allow Federal Exemptions

Roughly 20 states (plus the District of Columbia) allow debtors to choose between their state exemption scheme and the federal exemptions under 11 U.S.C. Section 522(d). In these states, you should calculate your total exempt property under both systems and choose whichever protects more.

States that currently allow the federal exemption election:

6. Bankruptcy Court Links by State

Every state has at least one federal judicial district with its own bankruptcy court. Larger states have multiple districts. Below are links to each bankruptcy court's official website, where you can find local rules, filing fees, forms, and pro se resources.

Each court has its own local rules that supplement the Federal Rules of Bankruptcy Procedure. Local rules govern everything from document formatting requirements to hearing procedures to attorney fee disclosure. Before filing in any district, review the court's local rules carefully.

7. How Domicile Affects Your Exemptions

Your state of domicile determines which exemptions you can use, but the rules for determining domicile in bankruptcy are not as straightforward as "where you live now." Congress imposed specific lookback periods to prevent forum shopping.

The 730-Day Rule

Under 11 U.S.C. Section 522(b)(3)(A), you must have been domiciled in a state for at least 730 days (exactly 2 years) before filing to use that state's exemptions. If you have not lived in your current state for 730 days, you use the exemptions of the state where you were domiciled for the greater portion of the 180-day period before the 730-day lookback period.

The 1,215-Day Cap

Even after you satisfy the 730-day rule, Congress added another restriction. Under 11 U.S.C. Section 522(p), if you acquired an interest in your homestead within 1,215 days (about 3 years and 4 months) before filing, the homestead exemption is capped at $189,050 -- regardless of what state law allows. This cap was specifically designed to prevent people from buying expensive homes in unlimited-homestead states shortly before filing.

Important exceptions to the 1,215-day cap:

• It does not apply to equity transferred from a previous homestead in the same state
• It does not apply to the family farmer's homestead
• It does not reduce the homestead exemption below $189,050 -- it only caps amounts above that

The 10-Year Felony/Securities Fraud Provision

Under 11 U.S.C. Section 522(q), the homestead exemption is capped at $189,050 if the debtor has been convicted of a felony demonstrating that the filing was an abuse of the bankruptcy system, or owes a debt arising from securities law violations, fraud, manipulation, or certain other bad acts. This provision has no time limit and applies regardless of how long you have owned the home.

8. State Median Income and the Means Test

The means test under 11 U.S.C. Section 707(b)(2) is the gateway to Chapter 7 bankruptcy for individuals with primarily consumer debts. The first step compares your current monthly income (averaged over the 6 months before filing) to the median income for your state and household size. If you are below the median, you pass the means test automatically and can file Chapter 7 without further analysis.

Median income also matters in Chapter 13. Below-median debtors can propose 36-month repayment plans. Above-median debtors are required to commit to plans of 60 months (5 years). The difference can amount to tens of thousands of dollars in total plan payments.

The U.S. Trustee Program publishes updated median income data every six months, usually in May and November. The data is derived from Census Bureau surveys and adjusted for household size.

Where to Find Current Median Income Data

• DOJ/USTP Means Testing Page -- Official source for current and historical median income tables, expense allowances (IRS standards), and the means test form (Official Form 122A-2)
• meanstest.org -- Our free means test calculator uses the latest DOJ data for all 50 states. Enter your state, household size, and income to see if you are above or below the median instantly.

Median Income by State -- Key Ranges

For a single-person household, median income ranges from approximately $43,500 (Mississippi) to over $76,000 (District of Columbia). A few representative comparisons:

These figures change with each DOJ update. For the most current numbers, use the means test calculator or check the DOJ means testing page directly.

9. Frequently Asked Questions

Do bankruptcy exemptions vary by state?

Yes. Bankruptcy exemptions vary dramatically by state. Each state sets its own exemption amounts for property like homes, vehicles, and personal belongings. Some states offer unlimited homestead exemptions (Texas, Florida, Kansas), while others cap the homestead exemption at $5,000 or less. About 20 states allow debtors to choose between state exemptions and the federal exemption schedule under 11 U.S.C. Section 522(d). The remaining states require debtors to use state exemptions only.

What is a homestead exemption in bankruptcy?

A homestead exemption protects equity in your primary residence from being taken by the bankruptcy trustee. The amount varies widely by state. Texas, Florida, Kansas, Iowa, South Dakota, and Oklahoma offer unlimited homestead exemptions (subject to acreage limits). Other states range from as low as $5,000 (Alabama) to over $500,000 (Massachusetts, Nevada). If your home equity exceeds the exemption, the trustee can sell the home in Chapter 7, pay you the exempt amount, and distribute the rest to creditors.

Which states allow you to choose federal bankruptcy exemptions?

Approximately 20 states allow debtors to choose between state exemptions and the federal exemption schedule. These include Alaska, Arkansas, Connecticut, District of Columbia, Hawaii, Kentucky, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Washington, and Wisconsin. In these states, you pick whichever system protects more of your property -- you cannot mix and match from both.

What is the 730-day domicile rule for bankruptcy exemptions?

Under 11 U.S.C. Section 522(b)(3)(A), you must have been domiciled in a state for at least 730 days (2 years) before filing to use that state's exemptions. If you moved within the last 730 days, you use the exemptions of the state where you lived for the greater part of the 180-day period before the 730-day lookback. This prevents people from moving to a state with generous exemptions right before filing. Congress added a further cap under Section 522(p) limiting the homestead exemption to $189,050 if you acquired your home within 1,215 days of filing.

How does state median income affect bankruptcy?

State median income determines whether you pass the Chapter 7 means test under 11 U.S.C. Section 707(b)(2). If your household income is below the median for your state and household size, you pass automatically and can file Chapter 7. If above, you must complete the full means test calculation. Median income also determines the length of a Chapter 13 plan -- below-median debtors can propose 36-month plans, while above-median debtors must commit to 60 months. The U.S. Trustee Program publishes updated median income figures every six months.

Can I file bankruptcy in a different state than where I live?

Generally, no. Under 28 U.S.C. Section 1408, you must file bankruptcy in the district where you have lived for the greater part of the 180 days before filing. You cannot choose a state with better exemptions and file there -- venue is determined by your domicile. However, the exemptions you use are governed by the 730-day rule, so even if you file in your new state, you may still use exemptions from the state where you previously lived.