What Are the Virginia Bankruptcy Exemptions?

Medical bills, credit card debt, and other expenses can pile up fast—especially if something unexpected happens, like a job loss or serious illness. And with so many people in Virginia living paycheck to paycheck, even a short-term crisis can cause long-term financial stress.

If you’re facing things like wage garnishment, car repossession, or the risk of losing your home, filing for bankruptcy might help you get a fresh start. Most people who file bankruptcy don't lose anything but their debt! The majority of filers get to keep all of their property.

Bankruptcy Exemptions in Virginia: The Basics

Bankruptcy is a federal process, which means it works mostly the same no matter where you live. But there's one big difference from state to state: the rules about what property you can keep. These rules are called bankruptcy exemptions.

Federal law gives each state the choice to either use a set of federal exemptions or to create their own list of protected property. Some states let you choose between the two. But Virginia doesn’t. If you file for bankruptcy in Virginia, you have to use the exemptions provided by Virginia law. You can’t use the federal bankruptcy exemptions, though you may still qualify for a few federal protections that apply in special cases, called federal nonbankruptcy exemptions.

Feel confused? Upsolve may be able to help! Take our two-minute screener to see if you qualify to use our free filing tool. Most people with simple Chapter 7 cases are eligible.

Why Exemptions Matter in a Virginia Chapter 7 Case

When you file for Chapter 7 bankruptcy in Virginia, you don’t have to give up everything you own. In fact, state law allows you to keep certain property as long as it falls within exemption limits. This can include your car, retirement savings, the equity in your home, and more.

These protected items are called exempt assets. The bankruptcy trustee can only sell property that isn’t covered by an exemption. So if your car is worth less than the allowed exemption amount, you’ll likely get to keep it. But if it’s worth more, the trustee might sell it and give you back the exempt amount.

Your personal situation—like your income, the value of your property, and what kind of debt you have—will affect what the bankruptcy process looks like.

Does Virginia Allow You To Use Federal Bankruptcy Exemptions?

No, Virginia doesn’t allow you to use the federal bankruptcy exemptions. If you live in Virginia and file for bankruptcy, you’ll need to use the exemptions listed in Virginia state law.

Some states let filers choose between their state’s exemption list and the federal one. But Virginia is not one of those states. That said, you might still qualify for a few special protections called federal nonbankruptcy exemptions, depending on your situation. The federal nonbankruptcy exemptions can help you protect retirement income and certain benefits.

What Are the Virginia Bankruptcy Exemptions?

When you file for bankruptcy in Virginia, you’re allowed to keep certain property that’s considered necessary for living, working, or getting back on your feet. These protections are called exemptions, and they’re often grouped by property type.

Some of the most common categories include:

• Your home (real estate you live in)

• Your vehicle

• Household items like furniture and appliances

• Personal property, including clothing, heirlooms, and even pets

• Wildcard exemptions, which you can apply to anything you choose

In most cases, married couples filing jointly can claim the full exemption amount, as long as both have an ownership interest in the property. This is known as doubling the exemption, and it can help protect more of your shared assets.

Real Property: The Homestead Exemption

Virginia’s homestead exemption helps protect your home—or the equity you have in it—when you file for bankruptcy. This exemption is designed to make sure people don’t lose their place to live just because they’re going through financial trouble.

You can use this exemption to protect up to $50,000 of equity in real estate or personal property that serves as your primary residence. Equity is the part of your property’s value that you actually own, after subtracting any loans or mortgages.

• In a bankruptcy case, you claim this exemption by listing the property on your bankruptcy forms.

• Outside of bankruptcy, such as when a creditor is trying to collect a debt, you’ll need to file a homestead deed with the court to protect the property.

This protection can be a crucial tool if you own your home or have valuable property you live on.

📜 Legal reference: Virginia Code § 34-6

Wildcard Exemption

Virginia’s wildcard exemption gives you extra flexibility by letting you protect any property you choose, not just specific categories like your home or car.

You can use the wildcard exemption to protect up to:

• $5,000 in property value

• $10,000 if you're 65 or older

• An additional $500 for each dependent you support

You can apply this exemption to anything—from cash in your savings account to electronics, jewelry, or other valuable personal items. It’s especially helpful if you have something that isn’t covered by another exemption.

This is one of the most flexible tools available in a Virginia bankruptcy case, and it can help you hold on to things that matter most to you.

Motor Vehicle Exemption

In Virginia, you can protect up to $10,000 of equity in one or more motor vehicles when you file for bankruptcy.

This exemption is important because many people rely on their car to get to work, take care of their family, or handle everyday errands. If your car is paid off—or nearly paid off—this exemption can help you keep it.

Equity is the value of your car minus what you still owe on it. So, if your car is worth $7,000 and you owe $2,000, your equity is $5,000—and it would be fully protected under the $10,000 limit.

This exemption can be used by individuals or shared by couples, depending on who owns the car.

📜 Legal reference: Virginia Code § 34-8

Other Personal Property Exemptions

Virginia law allows you to protect a variety of personal items that are important for daily life or have sentimental value. These exemptions help ensure you can keep basic belongings and meaningful possessions during the bankruptcy process.

Here’s what you can protect:

• Household furnishings like beds, dressers, refrigerators, and kitchenware, up to $5,000

• Family heirlooms and portraits, up to $5,000

• Clothing, up to $1,000

• Firearms, up to $3,000

• All pets (as long as they aren't kept or raised for sale or profit)

• Medically prescribed health aids (no value limit)

• Family Bible

• Wedding and engagement rings (no specific dollar limit listed)

You’re also allowed to protect the following:

• A burial plot and up to $5,000 in a prepaid funeral contract

• Certain prepaid tuition plans, covered under separate Virginia education laws

• Up to $20,000 in personal property of a deceased spouse, if you're the surviving spouse

  • If there’s no surviving spouse, children can claim this exemption instead

Legal reference: Virginia. Code Ann. §§ 23-38.81, 34-18, 34-4, 34-27, 34-26, and 64.2-310

Money Benefits

Money benefits includes pensions, retirement accounts, public benefits, insurance, alimony, and child support.

Pension and Retirement Exemptions

As per the federal rules, retirement benefits of certain public employees are 100% exempt. Also, note that tax-exempt retirement accounts are exempt as well.

• You can protect your retirement accounts (tax-exempt), such as 401(k)s, profit-sharing plan, 403(b)s, as well as money purchase plan.

• You can also protect SIMPLE IRAs, SEP and defined benefit plans.

These bankruptcy exemptions are available under U.S.C. § 522. Under Section § 522(b)(3)(C)(n), you can protect IRAS as well as Roth IRAs to the maximum amount, even though you’re required to use Virginia state exemptions otherwise.

• Section 51.1-124.4 covers state employees

• Section 51.1-802 covers county, town, and city employees.

• Section 51.1-200 covers state police officers.

• Section 51.1-300 covers judges.

Wage Exemption

Under Section 34-29 – You can protect higher of the following amount:

• Forty times the federal hourly wage (minimum) 

• Or a minimum of 75 percent of disposable weekly earnings. 

It is worth noting that a judge may approve more for low-income filers in the state. 

Public Benefits

The following are fully exempt: 

• Crime victims' compensation (unless you are seeking to discharge debt for the treatment of a crime-related injury)

• Unemployment compensation

• General aid and assistance to blind, disabled and aged people

• Workers' compensation

• Earned income tax credit

Legal reference: Virginia. Code Ann. §§ 9.2-368.12, 63.2-506, 60.2-600, 65.1-82, 34-26(9).

Insurance

Accident benefits and sickness benefits are exempt under the law. Also, funds deposited in continuing healthcare provider accounts and proceeds received under an industrial sick insurance policy are exempt. The benefits offered by cooperative non-profit life benefit insurance companies are also protected.

• Life insurance proceeds are exempt under Section 38.2-3122.

• Group life insurance policy or its proceeds are exempt under Section 38.2-3339.

• Accident, industrial or sickness and illness benefits are exempt under Section 38.2-3406

• Cooperative life insurance benefits are exempt under Section 38.2-3811.

• Burial society benefits are exempt under Section 38.2-4021

• Fraternal benefit society benefits are exempt under Section 38:2-4118.

• Group life insurance or accident insurance for government officials is exempt under Section 51.1-510.

Alimony and Child Support 

Child support and alimony are considered exempt in Virginia to the extent that these payments are reasonably necessary for the ongoing support of the person filing bankruptcy and any of their dependents. You can exempt the amount under Virginia. Code Ann. §34-26(10).

Other Virginia Exemptions

• Tools of the trade: You can exempt up to $10,000 for various items needed in your trade, business or profession under Virginia. Code Ann. § § 34-26, 34-27.

  • If you are an agricultural worker, you can exempt a pair of mules or horses with gear, 1 wagon or cart, 1 tractor up to $3,000, 2 plows, and 1 drag.

  • You can also protect harvest cradle, rake, pitchfork, and fertilizer up to $1,000 under Virginia Code Ann. § 34-27.

• Military equipment

• Burial property and cemeteries

Legal Reference: Virginia Code Ann. §§ 34-26, 34-27, and 44-96.

Need Help Filing Chapter 7 Bankruptcy in Virginia?

While filing on your own can feel overwhelming, many people successfully file Chapter 7 without a lawyer by taking things step by step and making sure they understand how exemptions apply.

If you have a simple Chapter 7 case, Upsolve may be able to help. See if you're eligible to use our free Chapter 7 filing tool. (It only takes two minutes!) If you prefer to speak with an attorney, we can help you set up a free consultation with a bankruptcy lawyer near you to get legal advice specific to your case.

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