What are the Virginia Bankruptcy Exemptions?

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Written by the Upsolve Team.  Reviewed by Andrea Wimmer, Esq
Updated March 19, 2020

What are the Virginia bankruptcy exemptions, and why are they important in a Chapter 7 bankruptcy? 

Debt, such as student loans and medical bills, can get out of control quite quickly, even when you are generally good when it comes to managing your money. Often, all it takes is just one unexpected health complication to accrue a mountain of healthcare bills, or losing a job to cut off the family's primary source of income suddenly. A lot of people in Virginia live paycheck-to-paycheck. This is why when an unfortunate or life-changing event occurs, then any type of financial security, you assumed you had may go flying out the window. It may be time to file for Virginia bankruptcy if the threats of repossession, foreclosure, and wage garnishments are becoming too much. When you file for bankruptcy in Virginia, you can generally preserve or protect some items, such as your car and home, from the bankruptcy trustee

Despite the stigma and many myths often associated with bankruptcy in the state, the process could help you end creditor harassment while discharging certain debts that you can’t repay. Items you are permitted to keep are called exempt assets. Virginia bankruptcy laws let you keep the property or assets on your exemption list during the bankruptcy process while your trustee collects and sells only your nonexempt assets in order to repay your creditors. If you file for Chapter 7 bankruptcy in Virginia, you may be able to protect most of your valuable possessions, such as a car and retirement accounts.

An exemption list specifies the maximum amount under the law for each exempt asset. Your trustee can only take items if their value exceeds the maximum allowed value. Keep in mind that the details of the bankruptcy process in Virginia will depend on your specific circumstances as well as the type of bankruptcy that you decide to file. The best bankruptcy attorneys in the state protect as many of your valuable assets as possible. 

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Does Virginia allow the use of federal bankruptcy exemptions?

Exempt property, such as a car or trade implements, is free of the claims of your creditors and can’t be taken by your trustee to be liquidated. Laws in Virginia determine the types as well as the amount of exempt property. 

While the U.S. Bankruptcy Code applies in almost the same way throughout the country, there is one important exception you should be aware of; and that is the ability to protect your assets through bankruptcy exemptions. In many instances, the federal laws govern the bankruptcy process exclusively, but, in the context of bankruptcy exemptions, federal law allows each state to determine whether they would like to use the bankruptcy exemptions delineated under the federal law or create and use their own. 

Each state in the US has the choice of applying the federal bankruptcy exemptions or using their own list of asset values that will be protected or exempt from creditors in bankruptcy. While some states in the country allow people to choose between exemptions drafted by state lawmakers and federal exemptions, residents of Virginia who file for bankruptcy can only use the state exemptions expressly provided for in the state law. In Virginia, you are not permitted to use the federal bankruptcy exemptions.  You can use Virginia’s state exemptions and, if applicable, the federal nonbankruptcy exemptions.

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Virginia Bankruptcy Exemptions

Exempt assets include assets and belongings important to your wellbeing for occupational, practical, or personal reasons, like pensions, appliances, tools, personal effects, your vehicle, and your home. You may exempt any asset or property that falls into one of the bankruptcy exemption categories below. Note that the main goal of allowing exempt property and other personal assets are to allow a person to keep sufficient assets to start anew after bankruptcy. The exempt property often includes items like clothing, furnishings, home, and some equity in a car. 

Unless otherwise indicated, when spouses file bankruptcy together in Virginia, then each spouse may claim the full amount of the bankruptcy exemption (informally known as “doubling”) provided each spouse has an ownership interest in the relevant property.

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Real Property - The Virginia Homestead Exemption

Note that homestead protection laws in the state are intended to prevent people and families from being kicked out of their homes in the tragic event of a significant change in economic stature. Federal and state homestead laws usually help protect most or all of the equity in your primary residence. This is done by allowing you to declare a certain portion of your real estate or property as a "homestead." And homestead protection laws are often used in the context of bankruptcy or actions on the part of your creditors.

You can protect up to $5,000 of equity in your home or property that is covered by the Virginia homestead exemption. Also, you can protect $500 for each of your dependents. If you are at least 65 years old or are a disabled veteran, you can exempt up to $10,000. On the other hand, surviving spouses or minors qualify for a $20,000 homestead exemption in the state. The exemption is found in Virginia. Code Ann. § § 34-4, 34-18, and 64.2-311.

Note that you have to file a homestead declaration before you file for bankruptcy in Virginia, to take advantage of the state’s homestead exemption. The homestead exemption in Virginia applies to real property, which includes your home, manufactured home, condominium, or floating home.

You have to claim the property as exempt in the bankruptcy schedules. Also, to claim this homestead exemption in the state, you or your bankruptcy lawyer must also adequately prepare and file a proper “homestead deed” within a specific time limit. 

Wildcard Exemption

Here is another important exemption. Under Virginia law, you can apply the remaining homestead exemption, if any, to protect your personal property through this exemption. If you are a disabled veteran, you can protect up to $10,000 in property or cash. The exemption is available under Virginia. Code Ann. § 34-4.1.

Other Virginia bankruptcy exemptions filers may use to protect their property in a Chapter 7 bankruptcy or Chapter 13 case include the following.

Motor Vehicle

In most places, you cannot get to work without a motor vehicle. The motor vehicle exemption in Virginia plays an important role in determining whether or not your bankruptcy trustee is allowed to take your car to repay your unsecured creditors. Keep in mind that many people in the state owe more on their vehicles than it is worth.  However, if your vehicle is paid for, or nearly paid for, then Virginia bankruptcy exemptions allow you to protect up to $6,000 equity in the car.

You are also allowed to split that $6,000 between 2 or more cars if you want.  That is important for married couples in Virginia who have both vehicles in one spouse’s name. People in Virginia who use their motor vehicle to get to and from their business or need the car for work may be eligible to increase this exemption to $10,000.

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Other Personal Property 

You can use Virginia. Code Ann. §§ 23-38.81, 34-18, 34-4, 34-27, 34-26, and 64.2-310 to protect up to $5,000 in your household furnishings. Under the same code, you can protect up to $5,000 for family portraits as well as family heirlooms, $1,000 in wearing apparel, and $3,000 for firearms. You can also exempt all pets, such as dogs, cats, birds, rabbits, squirrels, and other pets, provided you have not kept or raised them for sale or profit. 

You can also protect medically prescribed health aids, your family bible, and prepaid tuition contracts with this generous exemption. You can even protect your wedding ring and engagement ring. A surviving spouse may claim a bankruptcy exemption for any personal property of their deceased spouse for a value of up to $20,000. And the children can claim this exemption if there’s no surviving spouse.

Money Benefits

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: 

You can protect crime victims' compensation under Section 19.2-368.12 unless you are seeking to discharge debt for the treatment of a crime-related injury. Unemployment compensation is exempt under Section 60.2-600. Under Section 63.2-506, general aid and assistance to blind, disabled and aged people are exempt. Workers' compensation is also exempt under Section 65.1-82. You can also protect earned income tax credit under Section 34-26(9).


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. Moreover, the benefits offered by cooperative non-profit life benefit insurance companies are 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).

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Other Virginia Exemptions

Trade Implements

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

You can protect military equipment under Virginia Code Ann. § 44-96.

Burial Property and Cemeteries 

Crematory and burial plots are fully exempt under the law.

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Filing Chapter 7 bankruptcy? 

If you are concerned about keeping your motor vehicle or home after filing Chapter 7 bankruptcy in the state, you should hire an experienced and professional bankruptcy lawyer in Virginia who you can trust will have all your best interests in mind. You can file bankruptcy in Virginia to protect your assets and get a new start. Many other bankruptcy exemptions may apply to your case. Bankruptcy exemptions in Virginia are specific, and you have to apply them to your belongings on the date you file your bankruptcy case. You should contact an experienced bankruptcy lawyer in Virginia to see how they can help you. When choosing a bankruptcy attorney in Virginia, it is important to have a competent and experienced attorney that can navigate the whole bankruptcy process and make things simpler for you. 

Bankruptcy lawyers in the state provide legal representation to people in different types of bankruptcy cases and debt relief actions. They will advocate for your rights and are fully committed to helping you get the positive resolution you seek. Please discuss your specific questions about your financial situation with a qualified and professional attorney in order to determine whether items and assets you own would be exempt. The attorney will also tell you, for example, whether Chapter 7 or Chapter 13 is better for you.

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About the authors

Andrea Wimmer, Esq

Andrea practiced exclusively as debtors’ counsel in consumer chapter 7 and 13 cases for more than 10 years before joining Upsolve, first as a contributing writer and editor and ultimately joining the team full time in August 2019. While in private practice, Andrea handled all ban... read more

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