Bankruptcy Guides by State

Bankruptcy is federal law, but many aspects vary by state—including exemptions that protect your property, median income thresholds for Chapter 7 eligibility, and which bankruptcy court handles your case. Select your state below for detailed information specific to filing bankruptcy where you live.

Select Your State

What You'll Find in Each State Guide

Understanding State Variations in Bankruptcy

Exemptions: Federal vs. State

Exemptions protect your property from being sold to pay creditors. Some states allow you to choose between federal bankruptcy exemptions and state exemptions. Other states require you to use state exemptions only. The exemption system you choose can significantly impact what property you keep.

States allowing federal exemptions: Alaska, Arkansas, Connecticut, Hawaii, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, Pennsylvania, Rhode Island, Texas, Vermont, Washington, Wisconsin, and the District of Columbia.

States requiring state exemptions: All other states require you to use state-specific exemptions.

Homestead Exemptions Vary Widely

The homestead exemption protects equity in your primary residence. This varies dramatically by state:

• Unlimited: Florida, Iowa, Kansas, Oklahoma, South Dakota, and Texas offer unlimited homestead protection (subject to acreage limits)
• High Protection: California ($600,000-$700,000), Massachusetts ($500,000), Nevada ($605,000)
• Moderate Protection: Many states protect $25,000-$100,000
• Low/No Protection: Some states protect little to no home equity

Median Income Thresholds

To qualify for Chapter 7, your income must be below your state's median income for your household size. These thresholds vary significantly:

• Highest: States like Maryland, Massachusetts, New Jersey have higher median incomes
• Lowest: States like Mississippi, Arkansas, West Virginia have lower median incomes
• Updated Annually: IRS updates median income figures every April

Residency Requirements for Exemptions

To use a state's exemptions, you generally must have lived in that state for at least 2 years before filing bankruptcy. If you've lived in your current state for less than 2 years, you may need to use your previous state's exemptions.

Common State Bankruptcy Questions

Can I file bankruptcy if I just moved to a new state?

Yes, but you must have lived in the state for the greater part of the 180 days before filing. However, which state's exemptions you use depends on where you've lived for the 2 years before filing.

Do I have to file in the state where I live?

Yes, you must file in the bankruptcy court for the district where you've lived for the greater part of the 180 days before filing.

Can I choose which state's exemptions to use?

Only if you've lived in a state that allows federal exemptions and you've been there for at least 2 years. Otherwise, you must use the exemptions of the state where you lived for the majority of the 2 years before filing.