State-Specific Bankruptcy Info


State-Specific Bankruptcy Info

Filing for bankruptcy can be a complicated process. While bankruptcy is governed by federal law, each state has its own rules and procedures that can impact how a bankruptcy case proceeds. This article provides an overview of some key state-specific bankruptcy issues to be aware of if you are considering filing for bankruptcy.


When you file for bankruptcy, you are allowed to claim certain assets as “exempt” – meaning they are protected from being sold to pay back creditors. Each state has its own set of exemption laws that determine what property you can shield in a bankruptcy.

For example, some states like Texas and Florida have unlimited homestead exemptions, meaning you can protect your entire home value regardless of how expensive your house is. Other states like California only exempt a portion of home equity. Make sure to check your state’s exemptions so you know what assets you may be able to keep in bankruptcy.

Some Key State Exemption Issues:

  • Homestead exemptions – dollar amounts and other limits on home equity protection
  • Vehicle exemptions – how much value of a car you can exempt
  • Personal property exemptions – exemptions for jewelry, household goods, tools of trade, etc.
  • Retirement and pension exemptions – protection for 401(k)s and other retirement accounts
  • Wage garnishment – state laws governing creditors’ ability to garnish wages

It’s important to consult a local bankruptcy attorney to fully understand what exemptions you can take advantage of in your state.

State-Specific Bankruptcy Chapters

Most consumers file under Chapter 7 or Chapter 13 bankruptcy. However, some states have specific laws regarding other bankruptcy chapters that provide additional options.

Chapter 9 Bankruptcy

Chapter 9 bankruptcy allows municipalities like cities and towns to restructure their debts. Only about half of U.S. states specifically authorize their municipalities to file Chapter 9 bankruptcy. For example, Georgia municipalities cannot file Chapter 9, while Pennsylvania municipalities can with state approval [2].

Chapter 12 Bankruptcy

Chapter 12 bankruptcy provides debt relief to “family farmers” and “family fishermen” with regular annual income. Most states authorize Chapter 12, but some like Wisconsin and Kansas have more restrictive definitions of who qualifies as a family farmer or fisherman .

State Law Impact

While bankruptcy is federal law, some state laws can impact bankruptcy cases. For example, states have different laws regarding judgments, foreclosures, repossessions, and garnishments that may affect a bankruptcy. A local attorney can advise how state laws will apply in your situation.

State Bankruptcy Exemptions

Here is an overview of bankruptcy exemptions in some of the most populous U.S. states:


  • Homestead Exemption: $75,000 – $175,000 depending on circumstances
  • Personal Property Exemption: $600 + up to $7,800 “wildcard”
  • Vehicle Exemption: $2,300 – $3,325 depending on circumstances
  • Pension/Retirement Exemption: Unlimited
  • Wage Garnishment: Maximum 25% of disposable earnings


  • Homestead Exemption: Unlimited
  • Personal Property Exemption: Up to $50,000 for household furnishings, jewelry, pets, health aids, sporting equipment
  • Vehicle Exemption: Unlimited value for one vehicle
  • Pension/Retirement Exemption: Unlimited
  • Wage Garnishment: Maximum 30% of disposable earnings


  • Homestead Exemption: Unlimited “homestead” exemption
  • Personal Property Exemption: Up to $4,000 total exemption for personal property
  • Vehicle Exemption: $1,000
  • Pension/Retirement Exemption: Unlimited
  • Wage Garnishment: No weekly maximum for head of family

New York

  • Homestead Exemption: $150,000 – $300,000 depending on county
  • Personal Property Exemption: Up to $13,200 household goods; $3,000 tools of trade
  • Vehicle Exemption: $4,550
  • Pension/Retirement Exemption: Unlimited
  • Wage Garnishment: Maximum 10% of gross income


  • Homestead Exemption: $15,000
  • Personal Property Exemption: $4,000
  • Vehicle Exemption: $2,400
  • Pension/Retirement Exemption: Unlimited
  • Wage Garnishment: Maximum 15% of gross income

Consult a bankruptcy attorney to fully understand the exemptions available in your state.

State-Specific Bankruptcy Resources

Many states offer resources on bankruptcy specific to their state laws and exemptions:

It’s a good idea to consult these state-specific resources and speak to a local bankruptcy attorney when considering filing bankruptcy. While bankruptcy is governed by federal law, states have a significant impact on exemptions, eligibility, and other bankruptcy rules and procedures.

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