Can I keep my 401(k) if I file Chapter 7 bankruptcy?

Yes, 401(k)s and other qualified retirement plans (ERISA) are fully protected in bankruptcy by federal law. Traditional and Roth IRAs are also protected up to approximately $1.5 million (adjusted for inflation in 2025).

What is the difference between state and federal bankruptcy exemptions?

Federal exemptions provide a uniform set of dollar limits (e.g., homestead $27,875, vehicle $4,650). State exemptions vary widely—some states like Texas and Florida offer unlimited homestead protection, while others have low caps. About half the states allow you to choose between the two systems; the rest require you to use state exemptions.

Are Social Security benefits protected in Chapter 7?

Absolutely. Social Security retirement, disability (SSDI), and Supplemental Security Income (SSI) are fully exempt under federal law. Unemployment benefits, veterans benefits, and public assistance (TANF, SNAP) are also completely protected. However, you must be able to trace these funds in bank accounts.

What is the homestead exemption for 2025?

Under the federal bankruptcy exemption system, the homestead exemption is $27,875 per debtor in 2025. You can also use up to $13,975 of unused homestead exemption to protect other property (wildcard). State homestead exemptions vary dramatically—from unlimited in Texas, Florida, and Iowa to as low as $10,000 in some states.

Can I choose between state and federal exemptions in my state?

It depends on your state. Approximately 30 states allow you to choose either the state or federal exemption system (including California, New York, Texas, Florida). The remaining states require you to use their specific state exemptions (including Pennsylvania, Virginia, Ohio). Use the selector above to see what applies in your state.

Are IRAs protected in Chapter 7 bankruptcy?

Yes, IRAs (both Traditional and Roth) are protected under federal bankruptcy law up to $1,512,350 per person in 2025. This limit is adjusted every three years for inflation. SEP IRAs and SIMPLE IRAs are treated as IRAs for exemption purposes. Many states also offer unlimited IRA protection beyond the federal cap.

What personal property can I keep in Chapter 7?

Under federal exemptions, you can keep: household goods up to $1,850 per item ($13,975 total), clothing (unlimited reasonably necessary), jewelry up to $1,950, tools of your trade up to $3,150, and health aids (unlimited). State exemptions vary significantly—for example, Kansas offers $20,000 total for personal property, while Alabama caps it at $3,000.

Does bankruptcy protect farm equipment and livestock?

Yes, but limits vary. Federal exemptions protect farm equipment under 'tools of trade' up to $3,150. Many agricultural states have much higher farm exemptions: Iowa protects farm equipment and livestock up to $10,000, Kansas up to $20,000, and Texas offers unlimited protection for farm equipment as part of rural homestead. Some states also protect growing crops separately.

How long do I have to file bankruptcy after moving to a new state?

To use your new state's exemptions, you generally must have lived there for at least 730 days (2 years) before filing. If you haven't met that requirement, you may be limited to the exemptions of the state where you lived for the majority of the 180-day period before that 2-year period. This is complex—consult a local attorney.

📘 Chapter 7 Bankruptcy Exemption Lookup 2026

Q: What happens if my property is worth more than the exemption limit?

If your asset exceeds the exemption amount, the bankruptcy trustee may sell the non-exempt portion and distribute the proceeds to creditors. However, you may be able to: (1) use a wildcard exemption to cover the excess, (2) negotiate to pay the trustee the non-exempt amount to keep the asset, or (3) convert non-exempt assets to exempt assets before filing (with caution to avoid fraud).

Retirement · Benefits · Farm · Personal Property – Detailed by State & Federal Law

📍 Select your state:

⚖️ Exemption system:

State exemptions Federal exemptions

👈 Select a state to see exemptions

💵 Average lawyer hourly rate in your state: $0

⚖️ State vs. Federal Exemption – A Quick Comparison

🏡 Florida (state)

Homestead: Unlimited (no dollar cap)
Vehicle: $1,000
Personal property: $1,000 per item
Wildcard: $4,000
IRA: Fully protected

📜 Federal exemptions

Homestead: $27,875 (+ unused to $13,975)
Vehicle: $4,650
Personal item: $1,850 per item / $13,975 total
Wildcard: $1,550 + up to $13,975 unused homestead
IRA: Up to $1,512,350

🚜 Iowa (state)

Homestead: Unlimited (rural 40 acres)
Vehicle: $7,000
Farm equipment: $10,000
Tools of trade: $10,000
IRA: Fully exempt

📋 Real‑Life Case Studies

📍 Texas

Situation: $60k home equity, $25k truck, $15k 401k.
Result: All protected under Texas state exemptions (unlimited homestead, vehicle not capped).

📍 California

Situation: $150k home equity, $10k jewelry, $200k IRA.
Result: Homestead protected up to $300k, jewelry limited to $0 under state system? Used federal: jewelry $1,950 exempt, IRA protected, house partially exempt. Saved ~$8k.

📍 Iowa

Situation: Farmer with $40k tractor, $12k livestock, $200k homestead.
Result: Tractor/livestock protected under farm exemption ($10k each, restructured). Homestead unlimited. Kept farm running.

🧭 How to Use This Lookup Tool (Step-by-Step)

Step 1: Select your state from the dropdown – the tool instantly loads your state’s exemptions (2026 data).
Step 2: Choose between State or Federal exemptions – some states allow you to pick either.
Step 3: Browse through the category tabs (Real Estate, Retirement, etc.) to see exact dollar caps and legal notes.
Step 4: Check the “other” tab for wildcard, health aids, or burial plots – often overlooked but valuable.
Step 5: Compare your assets with the exemption limits. If you exceed a cap, consult a local attorney – many offer free first visits.
Pro tip: Click the “case studies” to see how people in similar situations used exemptions.

❓ Frequently Asked Questions

Can I keep my 401(k) if I file Chapter 7?

Yes, 401(k)s and other qualified retirement plans (ERISA) are fully protected in bankruptcy by federal law, regardless of state. IRAs are protected up to ~$1.5 million (2026).

What’s the difference between state and federal exemptions?

Federal exemptions are a uniform list (e.g., homestead $27,875). Some states allow you to choose either system; others require you to use state exemptions only. Our tool shows both options where applicable.

Are Social Security benefits exempt?

Absolutely. Social Security, SSI, unemployment, and veterans benefits are fully exempt under federal law, but must be traceable in bank accounts.

What happens if my property is worth more than the exemption?

The bankruptcy trustee may sell the non-exempt portion and pay creditors. However, you can sometimes use a “wildcard” exemption or negotiate to buy back the asset. Many states also allow married couples to double exemptions.

Does this tool cover all states accurately?

We provide 2026 data for major states and federal exemptions. For states without specific data, we show typical ranges – always verify with a local attorney, especially for farm and wildcard rules.

⚠️ Important: Exemption laws are complex and vary significantly by state. Retirement accounts (401k, IRAs) are generally protected under federal law, but some states have additional protections. Public benefits like Social Security and unemployment are usually exempt. This tool provides general guidelines only. Always consult with a local bankruptcy attorney.

📌 Disclaimer: This tool is for informational purposes only. Exemption amounts are based on 2026 data and may change. Some states allow you to choose between state and federal exemptions. The protection of retirement accounts is governed by both federal and state law. This is not legal advice. Structured FAQ data (JSON‑LD) is included on this page.