Federal Supplemental Exemptions

In most states, you can use the federal supplemental exemptions in conjunction with your state-specific exemptions. It is important u to note that these are supplemental exemptions not the complete set of federal exemptions. In those states that allow you to substitute the federal set of exemptions, you cannot use these supplemental exemptions; you can simply use the complete set of federal exemptions instead of state exemptions. Following is a list of supplemental exemptions.

Death And Disability Benefits

If you are one of those longshoremen and harbor workers or government employees who is receiving some kind of death and disability benefits from federal government, that amount of money can be exempted 100% under chapter 7 bankruptcy. Such benefits may also include war risk hazard injury or death compensation.

Survivor’s Benefits

Lighthouse workers, supreme court chief justice administrators, judicial center directors, US court directors, Judges, and those who offered military service often get survivor’s benefits. As per the laws regarding federal supplemental exemptions, the amount of money received as part of these benefits cannot be used to pay off your debts. Such benefits are 100% exempted.

Retirement Benefits

Veterans’ medal of honor benefits, Veterans’ benefits, Social Security benefits, and Military honor roll pensions come under this category. The retirement benefits that Railroad workers, Military service employees, Foreign service employees, Civil service employees, and CIA employees receive are also completely exempted.


Following are some other things that come under supplemental exemptions.

· If you have earned some wages but have not yet been paid, you can keep up to 75% of that amount. The remaining 25% can be used by the bankruptcy trustee to settle your debts. But, there can still be some exceptions. For example, low-income debtors can be allowed to keep more than 75% (if the court orders).
· Seaman’s wages, but only if there is a written agreement available confirming the employment and the wages.
· Seaman’s clothing
· Unemployment insurance received by railroad workers
· Group life insurance for those who are employed in Military service
· If you are employed outside continental US in a military service, your deposits in savings accounts cannot be used for debt repayment. You can keep 100% of that fund.
· Those Indians residing in Oregon who are receiving Klamath Indian tribe benefits can get the same exempted in full.

States Where The Above Exemptions Cannot Be Used

There are 17 states where the federal supplemental exemptions cannot be used include Arkansas, Connecticut, Hawaii, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Pennsylvania, Puerto Rico, Rhode Island, Texas, Vermont, Washington DC, Washington state, and Wisconsin. In all these states, you can use either state-specified exemptions or the federal set of exemptions.

States Where The Above Exemptions Can Be Used

The remaining states have made it mandatory to use only state-specific exemptions, but the debtors (who have filed for bankruptcy under chapter 7) are allowed to use federal supplemental exemptions (as explained above) in conjunction with the state exemptions. Those states include Alabama, Alaska, Arizona, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia, and Wyoming.

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Posted in Bankruptcy, Bankruptcy Exemptions | 2 Comments »

2 Responses to “Federal Supplemental Exemptions”

  1. [...] with the state exemptions. Following is a list of exemptions allowed as per federal laws. For federal supplemental exemptions, you can click [...]

  2. John says:

    Very informative and clear points. . After reading this article, I really realize that every one must read the list of supplemental exemptions. Article has some very important facts must to know for a person who is going to file a petition under chapter 7 bankruptcy. There are many states in US, they give certain exemptions but in some states you can get Federal Supplemental exemptions also. You can combine these exemptions with the exemption provided by your state. Supplemental exemptions can prove to be very beneficial for you. If you are taking some death and disability benefits these will be 100 % exempted. Any sort of death compensation will also not to be discharged under chapter 7 bankruptcy. Your benefits if you are getting as survivor of Supreme Court chief justice administrators or the directors of other courts will be fully exempted. Your retirement fund will also be fully exempted under chapter 7 bankruptcy.. But there are some states where these laws are not applicable. The exemptions given under Federal supplemental laws will not be provided in some states like Texas, Vermont etc. The article has done such a great job of providing such important and useful information.

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