What is the Wild Card Exemption?



By:Mike Cibik

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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