What Are the Washington D.C. Bankruptcy Exemptions?

What Are the Washington D.C. Bankruptcy Exemptions and Why Are They Important in a Chapter 7 Bankruptcy? 

One of the most important steps in the Chapter 7 bankruptcy process involves claiming bankruptcy exemptions. Ideally, when you file bankruptcy, you set yourself up to benefit from a fresh start, financially speaking. However, if you don’t claim all the bankruptcy exemptions available to you, you risk being burdened with having to purchase property to replace the nonexempt property that your bankruptcy trustee has sold to repay your creditors.

Starting over can be liberating. However, starting over without your personal property can be devastating. As you fill out your bankruptcy forms, take great care to claim as many exemptions as apply to your situation to safeguard your property from being sold by your trustee. This guide will explore the kinds of exemptions you can claim and the values of each exemption available to Washington D.C. residents.

Does Washington D.C. Allow Filers To Use Federal Bankruptcy Exemptions?

District of Columbia law allows Chapter 7 bankruptcy filers to apply either federal bankruptcy exemptions or DC's exemptions (plus certain federal nonbankruptcy exemptions) to their property. This means that you can choose whichever set of exemptions is best for your situation. But you can't pick and choose exemptions from both structures.

The information listed below will help you to compare and contrast the pros and cons of each approach. Note that if you moved to D.C. less than two years ago, you may be limited to using the federal exemptions.

Washington D.C. Bankruptcy Exemptions

The exemption amounts listed throughout are for individuals filing bankruptcy alone. But if you're married and filing for bankruptcy jointly with your spouse, you can double most exemption amounts for property you own together. One exception is the homestead exemption.

For example, say that the single filing exemption allowance for clothing in Washington D.C. was $200. If you both own the clothing in your house, your exemption amount would double to $400. Keep this in mind as you compare the Washington D.C. and federal exemptions.

Real Property: The Washington D.C. Homestead Exemption

f you’re a homeowner and you choose to apply D.C. bankruptcy exemptions to your property, you can exempt 100% of the equity in your home or co-op, as long as you and/or your dependents reside in the residence. Compared to most other states this is an incredibly generous exemption. If you’re a homeowner, the benefits of this state exemption may ultimately outweigh the advantages of claiming federal exemptions overall.

Personal Property Exemptions

To protect your tangible assets, you’ll need to claim as many personal property exemptions as you can. Unless otherwise noted, you can exempt the following kinds of personal property up to their full value:

• Appliances, books, clothing, household furnishings, household goods, musical instruments, and pets up to $425 per item and $8,625 total – values tend to be calculated at garage sale prices

• Family library up to $400

• Family pictures

• Food (enough to last three months)

• Health aids

• Motor vehicle up to $2,575 of equity in a single motor vehicle

Additionally, the following “tools of the trade” may also be exempted up to a certain allowance:

• Books, furniture, and tools of a professional or artist up to $300

• Mechanic’s tools up to $200

• Notary public’s seal and documents

Money Benefits

In addition to exemptions for tangible property and real estate, District of Columbia law allows for exemption of a variety of monetary, insurance-related, and retirement assets, as well as many public benefits.

Unless otherwise noted, the following monetary benefits may be exempted up to their full value under D.C. law:

• Aid to the blind, elderly, and disabled

• Alimony or spousal support

• Cemetery and burial funds

• Child support

• Condo deposit

• Co-op holdings (up to $500)

• Crime victims' compensation

• Disability benefits

• Fraternal benefit society benefits

• General public assistance

• Group life insurance policy or proceeds

• Higher education tuition savings account

• IRAS and Roth IRAs (up to currently allowed amount)

• Life insurance payments

• Life insurance proceeds (if a provision in the contract states that the proceeds cannot be used to pay creditors)

• Life insurance proceeds or avails

• Loss of future earnings payments

• Nonwage earnings - including pension payments, insurance proceeds, and retirement benefits (up to $200 per month for two months for a head of family and up to $60 per month for two months filers who aren’t a head of family)

• Pain and suffering recovery

• Pensions for judges and public school teachers

• Retirement benefits for police, firefighters, and teachers

• Social Security

• Stock bonus, annuity, pension, or profit-sharing plan

• Tax-exempt retirement accounts - including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans

• Unemployment compensation

• Uninsured motorist benefits

• Unmatured life insurance contract (excluding credit life insurance)

• Veteran’s benefits

• Wages (up to 2 months’ worth of earned but unpaid wages and pension payments at a 75% rate)

• Workers’ compensation

• Wrongful death damages

Washington D.C. Wildcard Exemption

If you own assets that you can't exempt or fully exempt using the provisions noted above, you can use the Washington D.C. wildcard exemption to protect an additional $850 of property value for the assets of your choice.

If you aren't a homeowner, you can claim an additional $8,075 worth of exemption value under the wildcard provision because you haven’t used the homestead exemption.

How Do Washington D.C.'s Exemption Compare With Federal Exemptions?

Now that you’ve seen how D.C.’s exemptions work, it’s a good time to review the federal option. Comparing them can help you figure out which to use to best protect your property.

Depending on the kind of property you own, both systems might protect everything, or one might offer stronger protection than the other. Remember, you can't pick and choose between federal and state exemptions. You have to pick one.

📅 Federal exemption amounts are updated every three years to keep up with inflation. The numbers below reflect the most recent update, which took effect on April 1, 2025.

💍 Like D.C.’s exemptions, most federal exemptions can be doubled if you’re married and filing a joint bankruptcy case, unless otherwise noted.

Common Federal Bankruptcy Exemptions

If you file Chapter 7 bankruptcy and use the federal exemption system, you may be able to protect all or most of your property, depending on what you own. Below is a breakdown of the most common exemptions.

Exempt Property With Dollar Limits

These types of property are protected up to a set dollar amount:

• Motor vehicle equity: Up to $5,025

• Jewelry: Up to $2,125

• Household goods, furniture, appliances, clothing, books, animals, musical instruments, and crops: Up to $800 per item, with a total limit of $16,850

• Tools of the trade (like work tools, books, or equipment): Up to $3,175

• Life insurance policy with loan or cash value: Up to $16,850

• Personal injury recovery: Up to $31,575 (excluding compensation for pain and suffering or for financial losses)

• Traditional and Roth IRAs: Protected up to $1,711,975 in total

• Wildcard exemption: Up to $1,625, plus any unused portion of the homestead exemption (up to $15,800)

Homestead Exemption

You can protect up to $31,575 in home equity if you're filing individually, or $63,150 if you're married and filing jointly.

If you don’t need the full homestead exemption to protect your home, you can apply up to $15,850 of it to any other property using the federal wildcard exemption. This is in addition to the $1,675 federal wildcard exemption, for a total of $17,475.

Fully Protected Property (No Dollar Limit)

The following types of property are fully protected under federal law, regardless of their value:

• Alimony and spousal support

• Child support

• Crime victims’ compensation

• Disability, illness, or unemployment benefits

• Health aids and medical equipment

• Life insurance benefits for someone you relied on for financial support

• Lost earnings payments

• Public assistance and other government benefits

• Social Security benefits

• Tax-exempt retirement accounts, such as 401(k)s, 403(b)s, SEP and SIMPLE IRAs, and other qualified plans

• Unemployment compensation

• Unmatured life insurance policies (excluding credit insurance)

• Veterans’ benefits

• Wrongful death awards if you depended on the deceased for financial support

Filing Chapter 7 Bankruptcy? 

If you aren't sure which set of exemptions will be most beneficial to protect the things you own, you can speak with aWashington D.C. bankruptcy attorney. Most bankruptcy law firms offer free consultations to prospective clients, which allows you to get some tailored legal advice for your case.

If you decide to file Chapter 7 bankruptcy, Upsolve’s filing tool can help you file your bankruptcy petition for free.