What is the Wild Card Exemption?

by Nicholas Ortiz, Boston Bankruptcy Attorney

May 19, 2009

In states that haven’t opted out of the federal exemptions, such as Massachusetts, there exists something referred to as the “wild card” exemption. This is a very useful exemption and what allows most bankruptcy debtors to keep all their property. Section 522(d) of the Bankruptcy Code states, in relevant part:

The following property may be exempted [...]
(1) The debtor’s aggregate interest, not to exceed $20,200 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor.
[....]
(5) The debtor’s aggregate interest in any property, not to exceed in value $1,075 plus up to $10,125 of any unused amount of the exemption provided under paragraph (1) of this subsection.

Subsection five is the wild card exemption. These two subsections work together to allow the debtor who doesn’t use the so-called federal homestead to exempt over $10,000 in “any property”. This, coupled with the other asset-specific exemptions found elsewhere in Section 522, usually allows a debtor exempt all his property in bankruptcy. Note: the dollar amounts in the statute adjust up every three years and will do so again in 2010.

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Nicholas Ortiz, Boston Bankruptcy Attorney

From Attorney Ortiz: We have been helping consumers and small businesses in Massachusetts successfully navigate through the bankruptcy process since 2002. We offer free initial consultations and payment plans. Call us at 617-716-0282 to discuss your debt relief options. Mention the Bankruptcy Law Network when you call!

Last modified: May 20, 2009