Virginia Bankruptcy Exemptions — What You Keep

Exemptions are the legal rules that determine what property you can keep when you file for bankruptcy. In Virginia, exemptions are critically important because they define the line between protected and at-risk assets §34-4.

Virginia requires use of state exemptions only — federal bankruptcy exemptions under §11 U.S.C. § 522(d) are not available. This means the specific Virginia exemption amounts below control what you can protect.

Homestead §34-4

$50,000 in a principal residence, plus a general exemption of $5,000 ($10,000 if the householder is 65 or older) and $500 per dependent. Amounts adjust every three years starting April 1, 2027. Disabled veterans may claim an additional $10,000 (§ 34-4.1). The general exemption applies to real or personal property selected by the householder. This protects equity in your primary residence — if your home equity is within this limit, you keep the house in bankruptcy.

Personal property §34-26

$5,000 in household furnishings, $1,000 in wearing apparel, and $5,000 in family portraits and heirlooms; the Bible and wedding and engagement rings are fully exempt regardless of value (limits adjusted periodically). The Bible, wedding and engagement rings, and the family burial lot are specifically exempt without dollar limitation under Va. Code § 34-26. Family portraits and heirlooms are exempt only up to $5,000. This covers household goods, furnishings, clothing, and everyday personal items.

Vehicle §34-26(8)

$10,000 total in motor vehicles not held as exempt under subdivision 7, valued at fair market value less any prior security interest; a perfected security interest on a vehicle has priority over the exemption. Monetary limits adjust every three years beginning April 1, 2027. This protects equity in your car — meaning the value of the vehicle minus what you owe on it.

Wages §34-29

Earnings above the garnishable portion are protected: garnishment may not exceed the lesser of 25% of weekly disposable earnings or the amount exceeding 40× the greater of the federal or the current Virginia minimum hourly wage; support orders are subject to separate, higher limits, and other exceptions apply for certain bankruptcy orders and tax debts — confirm with a lawyer. This applies to wages already earned but not yet paid at the time of filing.

Wildcard §34-4

$1,000 (any property; this is a separate portion of the homestead exemption that can be applied as a wildcard). A wildcard exemption can be applied to any property not fully covered by other exemptions.

Retirement accounts §34-34

ERISA-qualified plans, IRAs, Roth IRAs, Virginia Retirement System (VRS), and other state/local government retirement funds are fully exempt. Retirement accounts receive strong protection in bankruptcy — both under state law and federal law §29 U.S.C. § 1056 (ERISA).

Tools of trade §34-26(7)

$10,000 in tools, books, instruments, implements, and equipment used in trade or occupation. This protects the equipment you need to earn a living.

• In Chapter 7, non-exempt property can be liquidated by the trustee. High exemptions mean you keep more.
• In Chapter 13, the "best interests of creditors" test means your plan must pay unsecured creditors at least what they would have received if non-exempt assets were liquidated in Chapter 7. Higher exemptions can reduce your required plan payment.

• Is your home equity within the homestead limit, or does it exceed the cap?
• Do you have a vehicle loan that reduces your equity below the exemption?
• Are there assets that could be reclassified or converted to exempt form before filing?
• Would waiting to file change the exemption calculation (e.g., recent large deposit, bonus, tax refund)?