What is The WIld Card Federal Bankruptcy Exemption?

Posted by Wesley Scott on February 12, 2020 at 2:44 PM
Wesley Scott

You will sometimes hear bankruptcy lawyers talk about the “wild card” bankruptcy exemption and you wonder what that is. When you file bankruptcy, debtors are required to disclose all their assets on schedules. You are also required to select exemptions if you want to exempt, or protect, your assets. Section 522(d) of the Bankruptcy Code lays out the exemptions you can select under the Federal Bankruptcy Exemptions. You can chose none of the exemptions if you wish to, but we would not recommend that.

Section 522(d)(5) of the Bankruptcy Code allows debtors to exempt $1,325.00 of any property you want to PLUS any unused homestead equity exemption up to a maximum of $12,725.00. For example, if you are renter and live in Minnesota, and you own no homestead real estate, you would be able to use $1,325.00 + $12,725.00 for a total of $14,050.00 on any property at all. You could have $14,050.00 in your bank account and you could exempt it all.

Now, you have to be very careful in choosing exemptions in bankruptcy. Only a qualified bankruptcy lawyer can choose the exemptions that are appropriate for your assets. It almost never turns out well for people who try to represent themselves and navigate the Bankruptcy Code in all of its complexity. We have seen people try to do it and we always end up feeling bad for them.

If you make mistakes in choosing exemptions, the trustee will object to your exemptions or worse, take assets you could have exempted and sell them and use the proceeds to pay down your debt. Please hire qualified bankruptcy counsel always.


When the time is right, or when you are ready, reach out to Minnesota’s HIGHEST GOOGLE reviewed bankruptcy law firm at www.kainscott.com. You will be so thankful you did.


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