Federal vs. State Exemptions
Some states let you choose federal or state exemptions. Federal: $27,900 homestead, $4,450 vehicle, $14,875 wildcard, unlimited retirement. State exemptions vary dramatically.
Key Exemptions for Medical Bankruptcy
Wildcard (protects cash, bank accounts), personal property, motor vehicle, and homestead. Medical filers rarely have significant non-exempt assets.
Why Most Cases Are No-Asset
Medical bills deplete savings, ongoing costs reduce income, most property is exempt, and retirement is fully protected. You keep everything and the debt is wiped out.
Frequently Asked Questions
Will I lose my house?
Almost certainly not. Homestead exemptions protect your home. Some states (TX, FL, KS) have unlimited homestead exemptions.
Are retirement accounts safe?
Yes. 401(k), IRA, pension are fully exempt with no limit for employer plans. IRAs exempt up to ~$1.5M.
What about my car?
Protected by the motor vehicle exemption ($4,450 federal equity). Most medical filers have modest vehicles that are completely exempt.
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