Federal bankruptcy exemption amounts are adjusted every three years, with the next adjustment set for April 1, 2022. Exemptions are the laws that let bankruptcy filers keep the property they own. With this increase in available exemptions, bankruptcy filers will be able to keep more assets. While the majority of Chapter 7 bankruptcy cases are already “no asset” cases in which no property is collected from the bankruptcy filer, these higher exemption amounts will make it more likely for bankruptcy filers to fall into this “no asset” category and keep all of their assets.
Some of the exemption changes set to take effect on April 1, 2022:
- “Wildcard” exemption (can be used on any asset) – Currently $1,325 + up to $12,575 of unused homestead exemption, increasing to $1,475 + up to $13,950. For those who don’t need to protect equity in their home, that means that the wildcard exemption can protect $15,425 of any type of asset, on top of all of the other available exemptions.
- Vehicle exemption – Currently $4,000, increasing to $4,450. This applies to the equity in a vehicle (value of the vehicle minus any loan balance). If your vehicle has more equity than this, the wildcard exemption may be available to exempt the remaining equity.
- Homestead exemption – Currently $25,150, increasing to $27,900. For cases where the home has equity greater than this figure, the New York State exemptions can still be selected instead which allow for protection of $89,975 of equity.