Figuring out which bankruptcy exemptions to use and how to use them is not very challenging when filing bankruptcy in Virginia. Virginia is an exemption “opt-out” state, so you must use Virginia exemptions, not federal exemptions. Long ago, the federal government gave each state (and Commonwealth, in this case) the authority to choose which properties a debtor can keep when he or she files for bankruptcy.
The laws protecting property from creditors and bankruptcy trustees are called “exemptions.” Property that is included in your bankruptcy estate under federal law, but that is not not exempt under Virginia law, can be taken and sold to pay your creditors. You should consult an experienced Virginia bankruptcy attorney to learn how best to exempt your property in bankruptcy under the applicable codes.
The following is a complete list of Virginia bankruptcy exemptions:
Homestead
34-4 – $5,000 plus $500 per dependent (if over 65 exemption is $10,000): Tenancies by the entirety are exempt without limitation as to debts of one spouse [In re Harris, 155 B.R. 948 (E.D.Va. 1993)]. Sale proceeds are exempt up to $5,000(34-20). Must file homestead declaration prior to filing for bankruptcy (34-6).
64.1-151.3 – Minor children may claim exemption if there is no surviving spouse. A surviving spouse may claim up to $15,000.
Personal Property
34-4.1 – $2,000 of any property of a disabled veteran who is a householder.
34-13 – Unused homestead.
34-26 – Motor vehicle up to $2,000; wearing apparel up to $1,000; household furnishings up to $5,000; family portraits and heirlooms up to $5,000; burial plot; wedding and engagement rings, family Bible; animals owned as pets, provided they are not raised for sale or profit; and medically prescribed health aids.
34-28.1 – Personal injury recoveries and causes of action.
23-38.81 – Prepaid tuition contracts.
Wages
34-29 – Greater of the following: 40 times the federal minimum hourly wage or minimum of 75% of disposable weekly earnings. Judge may approve more for low income debtor.
Pensions
11 U.S.C. § 522 – Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000 per person.
34-34 – ERISA-qualified benefits up to $25,000.
51.1-124.4 – State employees.
51.1-802 – County, city and town employees.
51.1-200 – State police officers.
51.1-300 – Judges.
Public Benefits
3.1-1111.1 – Payments to tobacco farmers.
19.2-368.12 – Crime victims’ compensation, unless seeking to discharge debt for treatment of crime-related injury.
60.2-600 – Unemployment compensation.
63.2-506 – General assistance and aid to blind, aged, and disabled.
65.1-82 – Workers’ compensation.
Tools of Trade
44-96 – Arms, uniforms and equipment of a military member.
34-26 – Tools, books, instruments, implements, equipment, and machines, including motor vehicles, vessels, and aircraft, necessary for use in occupation or trade up to $10,000.
34-27 – For farmer: tractor to $3,000, 1 wagon or cart, pair of horses, pair of mules with gear; fertilizer to $1,000; 2 plows, harvest cradle, 2 iron wedges, pitchfork and rake.
Insurance
38.2-3122 – Life insurance proceeds, dividends, interest, loan, cash, or surrender value.
38.2-3339 – Group life insurance policy or proceeds.
38.2-3406 – Accident, sickness or industrial sick benefits.
38.2-3811 – Cooperative life insurance benefits.
38.2-4021 – Burial society benefits.
38:2-4118 – Fraternal benefit society benefits.
51.1-510 – Group life or accident insurance for government officials.
Misc.
50-73.105 – Business partnership property.
34-4.1 – For disabled veterans, $10,000 of any property.