11 U.S.C. § 522 — Exemptions

Page 131 TITLE 11—BANKRUPTCY § 522 tive date, except as otherwise provided, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–554 effective 30 days after Oct. 27, 1986, see section 302(a) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title. CONFIDENTIALITY OF TAX INFORMATION Pub. L. 109–8, title III, § 315(c), Apr. 20, 2005, 119 Stat. 91, provided that: ‘‘(1) Not later than 180 days after the date of the en- actment of this Act [Apr. 20, 2005], the Director of the Administrative Office of the United States Courts shall establish procedures for safeguarding the confiden- tiality of any tax information required to be provided under this section. ‘‘(2) The procedures under paragraph (1) shall include restrictions on creditor access to tax information that is required to be provided under this section. ‘‘(3) Not later than 540 days after the date of enact- ment of this Act, the Director of the Administrative Office of the United States Courts shall prepare and submit to the President pro tempore of the Senate and the Speaker of the House of Representatives a report that— ‘‘(A) assesses the effectiveness of the procedures es- tablished under paragraph (1); and ‘‘(B) if appropriate, includes proposed legislation to— ‘‘(i) further protect the confidentiality of tax in- formation; and ‘‘(ii) provide penalties for the improper use by any person of the tax information required to be provided under this section.’’ PROVIDING REQUESTED TAX DOCUMENTS TO THE COURT Pub. L. 109–8, title XII, § 1228, Apr. 20, 2005, 119 Stat. 200, provided that: ‘‘(a) CHAPTER 7 CASES.—The court shall not grant a discharge in the case of an individual who is a debtor in a case under chapter 7 of title 11, United States Code, unless requested tax documents have been pro- vided to the court. ‘‘(b) CHAPTER 11 AND CHAPTER 13 CASES.—The court shall not confirm a plan of reorganization in the case of an individual under chapter 11 or 13 of title 11, United States Code, unless requested tax documents have been filed with the court. ‘‘(c) DOCUMENT RETENTION.—The court shall destroy documents submitted in support of a bankruptcy claim not sooner than 3 years after the date of the conclusion of a case filed by an individual under chapter 7, 11, or 13 of title 11, United States Code. In the event of a pending audit or enforcement action, the court may ex- tend the time for destruction of such requested tax doc- uments.’’ § 522. Exemptions (a) In this section— (1) ‘‘dependent’’ includes spouse, whether or not actually dependent; and (2) ‘‘value’’ means fair market value as of the date of the filing of the petition or, with respect to property that becomes property of the estate after such date, as of the date such property becomes property of the estate. (b)(1) Notwithstanding section 541 of this title, an individual debtor may exempt from property of the estate the property listed in either para- graph (2) or, in the alternative, paragraph (3) of this subsection. In joint cases filed under sec- tion 302 of this title and individual cases filed under section 301 or 303 of this title by or against debtors who are husband and wife, and whose estates are ordered to be jointly adminis- tered under Rule 1015(b) of the Federal Rules of Bankruptcy Procedure, one debtor may not elect to exempt property listed in paragraph (2) and the other debtor elect to exempt property listed in paragraph (3) of this subsection. If the parties cannot agree on the alternative to be elected, they shall be deemed to elect paragraph (2), where such election is permitted under the law of the jurisdiction where the case is filed. (2) Property listed in this paragraph is prop- erty that is specified under subsection (d), un- less the State law that is applicable to the debt- or under paragraph (3)(A) specifically does not so authorize. (3) Property listed in this paragraph is— (A) subject to subsections (o) and (p), any property that is exempt under Federal law, other than subsection (d) of this section, or State or local law that is applicable on the date of the filing of the petition to the place in which the debtor’s domicile has been lo- cated for the 730 days immediately preceding the date of the filing of the petition or if the debtor’s domicile has not been located in a single State for such 730-day period, the place in which the debtor’s domicile was located for 180 days immediately preceding the 730-day pe- riod or for a longer portion of such 180-day pe- riod than in any other place; (B) any interest in property in which the debtor had, immediately before the com- mencement of the case, an interest as a tenant by the entirety or joint tenant to the extent that such interest as a tenant by the entirety or joint tenant is exempt from process under applicable nonbankruptcy law; and (C) retirement funds to the extent that those funds are in a fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986. If the effect of the domiciliary requirement under subparagraph (A) is to render the debtor ineligible for any exemption, the debtor may elect to exempt property that is specified under subsection (d). (4) For purposes of paragraph (3)(C) and sub- section (d)(12), the following shall apply: (A) If the retirement funds are in a retire- ment fund that has received a favorable deter- mination under section 7805 of the Internal Revenue Code of 1986, and that determination is in effect as of the date of the filing of the petition in a case under this title, those funds shall be presumed to be exempt from the es- tate. (B) If the retirement funds are in a retire- ment fund that has not received a favorable determination under such section 7805, those funds are exempt from the estate if the debtor demonstrates that— (i) no prior determination to the contrary has been made by a court or the Internal Revenue Service; and Page 132 TITLE 11—BANKRUPTCY § 522 1 See Adjustment of Dollar Amounts notes below. (ii)(I) the retirement fund is in substantial compliance with the applicable require- ments of the Internal Revenue Code of 1986; or (II) the retirement fund fails to be in sub- stantial compliance with the applicable re- quirements of the Internal Revenue Code of 1986 and the debtor is not materially respon- sible for that failure. (C) A direct transfer of retirement funds from 1 fund or account that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986, under section 401(a)(31) of the Internal Revenue Code of 1986, or otherwise, shall not cease to qualify for exemption under para- graph (3)(C) or subsection (d)(12) by reason of such direct transfer. (D)(i) Any distribution that qualifies as an eligible rollover distribution within the mean- ing of section 402(c) of the Internal Revenue Code of 1986 or that is described in clause (ii) shall not cease to qualify for exemption under paragraph (3)(C) or subsection (d)(12) by reason of such distribution. (ii) A distribution described in this clause is an amount that— (I) has been distributed from a fund or ac- count that is exempt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986; and (II) to the extent allowed by law, is depos- ited in such a fund or account not later than 60 days after the distribution of such amount. (c) Unless the case is dismissed, property ex- empted under this section is not liable during or after the case for any debt of the debtor that arose, or that is determined under section 502 of this title as if such debt had arisen, before the commencement of the case, except— (1) a debt of a kind specified in paragraph (1) or (5) of section 523(a) (in which case, notwith- standing any provision of applicable nonbank- ruptcy law to the contrary, such property shall be liable for a debt of a kind specified in such paragraph); (2) a debt secured by a lien that is— (A)(i) not avoided under subsection (f) or (g) of this section or under section 544, 545, 547, 548, 549, or 724(a) of this title; and (ii) not void under section 506(d) of this title; or (B) a tax lien, notice of which is properly filed; (3) a debt of a kind specified in section 523(a)(4) or 523(a)(6) of this title owed by an in- stitution-affiliated party of an insured deposi- tory institution to a Federal depository insti- tutions regulatory agency acting in its capac- ity as conservator, receiver, or liquidating agent for such institution; or (4) a debt in connection with fraud in the ob- taining or providing of any scholarship, grant, loan, tuition, discount, award, or other finan- cial assistance for purposes of financing an education at an institution of higher edu- cation (as that term is defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001)). (d) The following property may be exempted under subsection (b)(2) of this section: (1) The debtor’s aggregate interest, not to exceed $15,000 1 in value, in real property or personal property that the debtor or a depend- ent of the debtor uses as a residence, in a co- operative that owns property that the debtor or a dependent of the debtor uses as a resi- dence, or in a burial plot for the debtor or a dependent of the debtor. (2) The debtor’s interest, not to exceed $2,400 1 in value, in one motor vehicle. (3) The debtor’s interest, not to exceed $400 1 in value in any particular item or $8,000 1 in aggregate value, in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments, that are held primarily for the personal, fam- ily, or household use of the debtor or a depend- ent of the debtor. (4) The debtor’s aggregate interest, not to exceed $1,000 1 in value, in jewelry held pri- marily for the personal, family, or household use of the debtor or a dependent of the debtor. (5) The debtor’s aggregate interest in any property, not to exceed in value $800 1 plus up to $7,500 1 of any unused amount of the exemp- tion provided under paragraph (1) of this sub- section. (6) The debtor’s aggregate interest, not to exceed $1,500 1 in value, in any implements, professional books, or tools, of the trade of the debtor or the trade of a dependent of the debt- or. (7) Any unmatured life insurance contract owned by the debtor, other than a credit life insurance contract. (8) The debtor’s aggregate interest, not to exceed in value $8,000 1 less any amount of property of the estate transferred in the man- ner specified in section 542(d) of this title, in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract owned by the debtor under which the insured is the debtor or an individual of whom the debtor is a dependent. (9) Professionally prescribed health aids for the debtor or a dependent of the debtor. (10) The debtor’s right to receive— (A) a social security benefit, unemploy- ment compensation, or a local public assist- ance benefit; (B) a veterans’ benefit; (C) a disability, illness, or unemployment benefit; (D) alimony, support, or separate mainte- nance, to the extent reasonably necessary for the support of the debtor and any de- pendent of the debtor; (E) a payment under a stock bonus, pen- sion, profitsharing, annuity, or similar plan or contract on account of illness, disability, death, age, or length of service, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor, un- less— (i) such plan or contract was established by or under the auspices of an insider that employed the debtor at the time the debt- Page 133 TITLE 11—BANKRUPTCY § 522 or’s rights under such plan or contract arose; (ii) such payment is on account of age or length of service; and (iii) such plan or contract does not qual- ify under section 401(a), 403(a), 403(b), or 408 of the Internal Revenue Code of 1986. (11) The debtor’s right to receive, or prop- erty that is traceable to— (A) an award under a crime victim’s rep- aration law; (B) a payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor; (C) a payment under a life insurance con- tract that insured the life of an individual of whom the debtor was a dependent on the date of such individual’s death, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor; (D) a payment, not to exceed $15,000,1 on account of personal bodily injury, not in- cluding pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a depend- ent; or (E) a payment in compensation of loss of future earnings of the debtor or an indi- vidual of whom the debtor is or was a de- pendent, to the extent reasonably necessary for the support of the debtor and any de- pendent of the debtor. (12) Retirement funds to the extent that those funds are in a fund or account that is ex- empt from taxation under section 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code of 1986. (e) A waiver of an exemption executed in favor of a creditor that holds an unsecured claim against the debtor is unenforceable in a case under this title with respect to such claim against property that the debtor may exempt under subsection (b) of this section. A waiver by the debtor of a power under subsection (f) or (h) of this section to avoid a transfer, under sub- section (g) or (i) of this section to exempt prop- erty, or under subsection (i) of this section to recover property or to preserve a transfer, is un- enforceable in a case under this title. (f)(1) Notwithstanding any waiver of exemp- tions but subject to paragraph (3), the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is— (A) a judicial lien, other than a judicial lien that secures a debt of a kind that is specified in section 523(a)(5); or (B) a nonpossessory, nonpurchase-money se- curity interest in any— (i) household furnishings, household goods, wearing apparel, appliances, books, animals, crops, musical instruments, or jewelry that are held primarily for the personal, family, or household use of the debtor or a depend- ent of the debtor; (ii) implements, professional books, or tools, of the trade of the debtor or the trade of a dependent of the debtor; or (iii) professionally prescribed health aids for the debtor or a dependent of the debtor. (2)(A) For the purposes of this subsection, a lien shall be considered to impair an exemption to the extent that the sum of— (i) the lien; (ii) all other liens on the property; and (iii) the amount of the exemption that the debtor could claim if there were no liens on the property; exceeds the value that the debtor’s interest in the property would have in the absence of any liens. (B) In the case of a property subject to more than 1 lien, a lien that has been avoided shall not be considered in making the calculation under subparagraph (A) with respect to other liens. (C) This paragraph shall not apply with re- spect to a judgment arising out of a mortgage foreclosure. (3) In a case in which State law that is appli- cable to the debtor— (A) permits a person to voluntarily waive a right to claim exemptions under subsection (d) or prohibits a debtor from claiming exemp- tions under subsection (d); and (B) either permits the debtor to claim ex- emptions under State law without limitation in amount, except to the extent that the debt- or has permitted the fixing of a consensual lien on any property or prohibits avoidance of a consensual lien on property otherwise eligi- ble to be claimed as exempt property; the debtor may not avoid the fixing of a lien on an interest of the debtor or a dependent of the debtor in property if the lien is a nonpossessory, nonpurchase-money security interest in imple- ments, professional books, or tools of the trade of the debtor or a dependent of the debtor or farm animals or crops of the debtor or a depend- ent of the debtor to the extent the value of such implements, professional books, tools of the trade, animals, and crops exceeds $5,000.1 (4)(A) Subject to subparagraph (B), for pur- poses of paragraph (1)(B), the term ‘‘household goods’’ means— (i) clothing; (ii) furniture; (iii) appliances; (iv) 1 radio; (v) 1 television; (vi) 1 VCR; (vii) linens; (viii) china; (ix) crockery; (x) kitchenware; (xi) educational materials and educational equipment primarily for the use of minor de- pendent children of the debtor; (xii) medical equipment and supplies; (xiii) furniture exclusively for the use of minor children, or elderly or disabled depend- ents of the debtor; (xiv) personal effects (including the toys and hobby equipment of minor dependent children and wedding rings) of the debtor and the de- pendents of the debtor; and Page 134 TITLE 11—BANKRUPTCY § 522 (xv) 1 personal computer and related equip- ment. (B) The term ‘‘household goods’’ does not in- clude— (i) works of art (unless by or of the debtor, or any relative of the debtor); (ii) electronic entertainment equipment with a fair market value of more than $500 1 in the aggregate (except 1 television, 1 radio, and 1 VCR); (iii) items acquired as antiques with a fair market value of more than $500 1 in the aggre- gate; (iv) jewelry with a fair market value of more than $500 1 in the aggregate (except wedding rings); and (v) a computer (except as otherwise provided for in this section), motor vehicle (including a tractor or lawn tractor), boat, or a motorized recreational device, conveyance, vehicle, watercraft, or aircraft. (g) Notwithstanding sections 550 and 551 of this title, the debtor may exempt under sub- section (b) of this section property that the trustee recovers under section 510(c)(2), 542, 543, 550, 551, or 553 of this title, to the extent that the debtor could have exempted such property under subsection (b) of this section if such prop- erty had not been transferred, if— (1)(A) such transfer was not a voluntary transfer of such property by the debtor; and (B) the debtor did not conceal such property; or (2) the debtor could have avoided such trans- fer under subsection (f)(1)(B) of this section. (h) The debtor may avoid a transfer of prop- erty of the debtor or recover a setoff to the ex- tent that the debtor could have exempted such property under subsection (g)(1) of this section if the trustee had avoided such transfer, if— (1) such transfer is avoidable by the trustee under section 544, 545, 547, 548, 549, or 724(a) of this title or recoverable by the trustee under section 553 of this title; and (2) the trustee does not attempt to avoid such transfer. (i)(1) If the debtor avoids a transfer or recovers a setoff under subsection (f) or (h) of this sec- tion, the debtor may recover in the manner pre- scribed by, and subject to the limitations of, section 550 of this title, the same as if the trust- ee had avoided such transfer, and may exempt any property so recovered under subsection (b) of this section. (2) Notwithstanding section 551 of this title, a transfer avoided under section 544, 545, 547, 548, 549, or 724(a) of this title, under subsection (f) or (h) of this section, or property recovered under section 553 of this title, may be preserved for the benefit of the debtor to the extent that the debt- or may exempt such property under subsection (g) of this section or paragraph (1) of this sub- section. (j) Notwithstanding subsections (g) and (i) of this section, the debtor may exempt a particular kind of property under subsections (g) and (i) of this section only to the extent that the debtor has exempted less property in value of such kind than that to which the debtor is entitled under subsection (b) of this section. (k) Property that the debtor exempts under this section is not liable for payment of any ad- ministrative expense except— (1) the aliquot share of the costs and ex- penses of avoiding a transfer of property that the debtor exempts under subsection (g) of this section, or of recovery of such property, that is attributable to the value of the portion of such property exempted in relation to the value of the property recovered; and (2) any costs and expenses of avoiding a transfer under subsection (f) or (h) of this sec- tion, or of recovery of property under sub- section (i)(1) of this section, that the debtor has not paid. (l) The debtor shall file a list of property that the debtor claims as exempt under subsection (b) of this section. If the debtor does not file such a list, a dependent of the debtor may file such a list, or may claim property as exempt from property of the estate on behalf of the debtor. Unless a party in interest objects, the property claimed as exempt on such list is ex- empt. (m) Subject to the limitation in subsection (b), this section shall apply separately with respect to each debtor in a joint case. (n) For assets in individual retirement ac- counts described in section 408 or 408A of the In- ternal Revenue Code of 1986, other than a sim- plified employee pension under section 408(k) of such Code or a simple retirement account under section 408(p) of such Code, the aggregate value of such assets exempted under this section, without regard to amounts attributable to roll- over contributions under section 402(c), 402(e)(6), 403(a)(4), 403(a)(5), and 403(b)(8) of the Internal Revenue Code of 1986, and earnings thereon, shall not exceed $1,000,000 1 in a case filed by a debtor who is an individual, except that such amount may be increased if the interests of jus- tice so require. (o) For purposes of subsection (b)(3)(A), and notwithstanding subsection (a), the value of an interest in— (1) real or personal property that the debtor or a dependent of the debtor uses as a resi- dence; (2) a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence; (3) a burial plot for the debtor or a depend- ent of the debtor; or (4) real or personal property that the debtor or a dependent of the debtor claims as a home- stead; shall be reduced to the extent that such value is attributable to any portion of any property that the debtor disposed of in the 10-year period end- ing on the date of the filing of the petition with the intent to hinder, delay, or defraud a creditor and that the debtor could not exempt, or that portion that the debtor could not exempt, under subsection (b), if on such date the debtor had held the property so disposed of. (p)(1) Except as provided in paragraph (2) of this subsection and sections 544 and 548, as a re- sult of electing under subsection (b)(3)(A) to ex- empt property under State or local law, a debtor may not exempt any amount of interest that Page 135 TITLE 11—BANKRUPTCY § 522 1 Replaced by 22 U.S.C. 4060(c). 2 Replaced by 46 U.S.C. 11108, 11109. 3 Replaced by 5 U.S.C. 8346. 4 Replaced by 45 U.S.C. 231m. 5 Railroad unemployment benefits are covered by 45 U.S.C. 352(e). 6 Veterans benefits generally are covered by 38 U.S.C. 3101 [now 5301]. was acquired by the debtor during the 1215-day period preceding the date of the filing of the pe- tition that exceeds in the aggregate $125,000 1 in value in— (A) real or personal property that the debtor or a dependent of the debtor uses as a resi- dence; (B) a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence; (C) a burial plot for the debtor or a depend- ent of the debtor; or (D) real or personal property that the debtor or dependent of the debtor claims as a home- stead. (2)(A) The limitation under paragraph (1) shall not apply to an exemption claimed under sub- section (b)(3)(A) by a family farmer for the prin- cipal residence of such farmer. (B) For purposes of paragraph (1), any amount of such interest does not include any interest transferred from a debtor’s previous principal residence (which was acquired prior to the be- ginning of such 1215-day period) into the debtor’s current principal residence, if the debtor’s pre- vious and current residences are located in the same State. (q)(1) As a result of electing under subsection (b)(3)(A) to exempt property under State or local law, a debtor may not exempt any amount of an interest in property described in subparagraphs (A), (B), (C), and (D) of subsection (p)(1) which exceeds in the aggregate $125,000 1 if— (A) the court determines, after notice and a hearing, that the debtor has been convicted of a felony (as defined in section 3156 of title 18), which under the circumstances, demonstrates that the filing of the case was an abuse of the provisions of this title; or (B) the debtor owes a debt arising from— (i) any violation of the Federal securities laws (as defined in section 3(a)(47) of the Se- curities Exchange Act of 1934), any State se- curities laws, or any regulation or order issued under Federal securities laws or State securities laws; (ii) fraud, deceit, or manipulation in a fi- duciary capacity or in connection with the purchase or sale of any security registered under section 12 or 15(d) of the Securities Exchange Act of 1934 or under section 6 of the Securities Act of 1933; (iii) any civil remedy under section 1964 of title 18; or (iv) any criminal act, intentional tort, or willful or reckless misconduct that caused serious physical injury or death to another individual in the preceding 5 years. (2) Paragraph (1) shall not apply to the extent the amount of an interest in property described in subparagraphs (A), (B), (C), and (D) of sub- section (p)(1) is reasonably necessary for the support of the debtor and any dependent of the debtor. (Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2586; Pub. L. 98–353, title III, §§ 306, 453, July 10, 1984, 98 Stat. 353, 375; Pub. L. 99–554, title II, § 283(i), Oct. 27, 1986, 100 Stat. 3117; Pub. L. 101–647, title XXV, § 2522(b), Nov. 29, 1990, 104 Stat. 4866; Pub. L. 103–394, title I, § 108(d), title III, §§ 303, 304(d), 310, title V, § 501(d)(12), Oct. 22, 1994, 108 Stat. 4112, 4132, 4133, 4137, 4145; Pub. L. 106–420, § 4, Nov. 1, 2000, 114 Stat. 1868; Pub. L. 109–8, title II, §§ 216, 224(a), (e)(1), title III, §§ 307, 308, 313(a), 322(a), Apr. 20, 2005, 119 Stat. 55, 62, 65, 81, 87, 96; Pub. L. 111–327, § 2(a)(17), Dec. 22, 2010, 124 Stat. 3559.) HISTORICAL AND REVISION NOTES LEGISLATIVE STATEMENTS Section 522 of the House amendment represents a compromise on the issue of exemptions between the po- sition taken in the House bill, and that taken in the Senate amendment. Dollar amounts specified in section 522(d) of the House bill have been reduced from amounts as contained in H.R. 8200 as passed by the House. The States may, by passing a law, determine whether the Federal exemptions will apply as an alter- native to State exemptions in bankruptcy cases. Section 522(c)(1) tracks the House bill and provides that dischargeable tax claims may not be collected out of exempt property. Section 522(f)(2) is derived from the Senate amend- ment restricting the debtor to avoidance of nonpossessory, nonpurchase money security interests. Exemptions: Section 522(c)(1) of the House amend- ment adopts a provision contained in the House bill that dischargeable taxes cannot be collected from ex- empt assets. This changes present law, which allows collection of dischargeable taxes from exempt property, a rule followed in the Senate amendment. Non- dischargeable taxes, however, will continue to the [be] collectable out of exempt property. It is anticipated that in the next session Congress will review the ex- emptions from levy currently contained in the Internal Revenue Code [title 26] with a view to increasing the exemptions to more realistic levels. SENATE REPORT NO. 95–989 Subsection (a) of this section defines two terms: ‘‘de- pendent’’ includes the debtor’s spouse, whether or not actually dependent; and ‘‘value’’ means fair market value as of the date of the filing of the petition. Subsection (b) tracks current law. It permits a debtor the exemptions to which he is entitled under other Fed- eral law and the law of the State of his domicile. Some of the items that may be exempted under Federal laws other than title 11 include: Foreign Service Retirement and Disability pay- ments, 22 U.S.C. 1104; 1 Social security payments, 42 U.S.C. 407; Injury or death compensation payments from war risk hazards, 42 U.S.C. 1717; Wages of fishermen, seamen, and apprentices, 46 U.S.C. 601; 2 Civil service retirement benefits, 5 U.S.C. 729, 2265; 3 Longshoremen’s and Harbor Workers’ Compensa- tion Act death and disability benefits, 33 U.S.C. 916; Railroad Retirement Act annuities and pensions, 45 U.S.C. 228(L); 4 Veterans benefits, 45 U.S.C. 352(E); 5 Special pensions paid to winners of the Congres- sional Medal of Honor, 38 U.S.C. 3101; 6 and Federal homestead lands on debts contracted before issuance of the patent, 43 U.S.C. 175. He may also exempt an interest in property in which the debtor had an interest as a tenant by the entirety or joint tenant to the extent that interest would have been exempt from process under applicable nonbank- ruptcy law. Page 136 TITLE 11—BANKRUPTCY § 522 7 Replaced by 22 U.S.C. 4060(c). 8 Replaced by 46 U.S.C. 11108, 11109. 9 Replaced by 5 U.S.C. 8346. 10 Replaced by 45 U.S.C. 231m. 11 Railroad unemployment benefits are covered by 45 U.S.C. 352(e). 12 Veterans benefits generally are covered by 38 U.S.C. 3101 [now 5301]. Under proposed section 541, all property of the debtor becomes property of the estate, but the debtor is per- mitted to exempt certain property from property of the estate under this section. Property may be exempted even if it is subject to a lien, but only the unencumbered portion of the property is to be counted in computing the ‘‘value’’ of the property for the pur- poses of exemption. As under current law, the debtor will be permitted to convert nonexempt property into exempt property be- fore filing a bankruptcy petition. The practice is not fraudulent as to creditors, and permits the debtor to make full use of the exemptions to which he is entitled under the law. Subsection (c) insulates exempt property from prepetition claims other than tax claims (whether or not dischargeable), and other than alimony, mainte- nance, or support claims that are excepted from dis- charge. The bankruptcy discharge does not prevent en- forcement of valid liens. The rule of Long v. Bullard, 117 U.S. 617 (1886), is accepted with respect to the enforce- ment of valid liens on nonexempt property as well as on exempt property. Cf. Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 583 (1935). Subsection (c)(3) permits the collection of discharge- able taxes from exempt assets. Only assets exempted from levy under Section 6334 of the Internal Revenue Code [title 26] or under applicable state or local tax law cannot be applied to satisfy these tax claims. This rule applies to prepetition tax claims against the debtor re- gardless of whether the claims do or do not receive pri- ority and whether they are dischargeable or non- dischargeable. Thus, even if a tax is dischargeable vis- a-vis the debtor’s after-acquired assets, it may never- theless be collectible from exempt property held by the estate. (Taxes incurred by the debtor’s estate which are collectible as first priority administrative expenses are not collectible from the debtor’s estate which are col- lectible as first priority administrative expenses are not collectible from the debtor’s exempt assets.) Subsection (d) protects the debtor’s exemptions, ei- ther Federal or State, by making unenforceable in a bankruptcy case a waiver of exemptions or a waiver of the debtor’s avoiding powers under the following sub- sections. Subsection (e) protects the debtor’s exemptions, his discharge, and thus his fresh start by permitting him to avoid certain liens on exempt property. The debtor may avoid a judicial lien on any property to the extent that the property could have been exempted in the ab- sence of the lien, and may similarly avoid a nonpur- chase-money security interest in certain household and personal goods. The avoiding power is independent of any waiver of exemptions. Subsection (f) gives the debtor the ability to exempt property that the trustee recovers under one of the trustee’s avoiding powers if the property was involun- tarily transferred away from the debtor (such as by the fixing of a judicial lien) and if the debtor did not con- ceal the property. The debtor is also permitted to ex- empt property that the trustee recovers as the result of the avoiding of the fixing of certain security interests to the extent that the debtor could otherwise have ex- empted the property. Subsection (g) provides that if the trustee does not exercise an avoiding power to recover a transfer of property that would be exempt, the debtor may exer- cise it and exempt the property, if the transfer was in- voluntary and the debtor did not conceal the property. If the debtor wishes to preserve his right to pursue any action under this provision, then he must intervene in any action brought by the trustee based on the same cause of action. It is not intended that the debtor be given an additional opportunity to avoid a transfer or that the transferee should have to defend the same ac- tion twice. Rather, the section is primarily designed to give the debtor the rights the trustee could have, but has not, pursued. The debtor is given no greater rights under this provision than the trustee, and thus, the debtor’s avoiding powers under proposed sections 544, 545, 547, and 548, are subject to proposed 546, as are the trustee’s powers. These subsections are cumulative. The debtor is not required to choose which he will use to gain an exemp- tion. Instead, he may use more than one in any par- ticular instance, just as the trustee’s avoiding powers are cumulative. Subsection (h) permits recovery by the debtor of property transferred by an avoided transfer from either the initial or subsequent transferees. It also permits preserving a transfer for the benefit of the debtor. In ei- ther event, the debtor may exempt the property recov- ered or preserved. Subsection (i) makes clear that the debtor may ex- empt property under the avoiding subsections (f) and (h) only to the extent he has exempted less property than allowed under subsection (b). Subsection (j) makes clear that the liability of the debtor’s exempt property is limited to the debtor’s ali- quot share of the costs and expenses recovery of prop- erty that the trustee recovers and the debtor later ex- empts, and any costs and expenses of avoiding a trans- fer by the debtor that the debtor has not already paid. Subsection (k) requires the debtor to file a list of property that he claims as exempt from property of the estate. Absent an objection to the list, the property is exempted. A dependent of the debtor may file it and thus be protected if the debtor fails to file the list. Subsection (l) provides the rule for a joint case. HOUSE REPORT NO. 95–595 Subsection (a) of this section defines two terms: ‘‘de- pendent’’ includes the debtor’s spouse, whether or not actually dependent; and ‘‘value’’ means fair market value as of the date of the filing of the petition. Subsection (b), the operative subsection of this sec- tion, is a significant departure from present law. It per- mits an individual debtor in a bankruptcy case a choice between exemption systems. The debtor may choose the Federal exemptions prescribed in subsection (d), or he may choose the exemptions to which he is entitled under other Federal law and the law of the State of his domicile. If the debtor chooses the latter, some of the items that may be exempted under other Federal laws include: —Foreign Service Retirement and Disability pay- ments, 22 U.S.C. 1104; 7 —Social security payments, 42 U.S.C. 407; —Injury or death compensation payments from war risk hazards, 42 U.S.C. 1717; —Wages of fishermen, seamen, and apprentices, 46 U.S.C. 601; 8 —Civil service retirement benefits, 5 U.S.C. 729, 2265; 9 —Longshoremen’s and Harbor Workers’ Compensa- tion Act death and disability benefits, 33 U.S.C. 916; —Railroad Retirement Act annuities and pensions, 45 U.S.C. 228(l); 10 —Veterans benefits, 45 U.S.C. 352(E); 11 —Special pensions paid to winners of the Congres- sional Medal of Honor, 38 U.S.C. 3101; 12 and —Federal homestead lands on debts contracted before issuance of the patent, 43 U.S.C. 175. He may also exempt an interest in property in which the debtor had an interest as a tenant by the entirety or joint tenant to the extent that interest would have been exempt from process under applicable nonbank- ruptcy law. The Rules will provide for the situation where the debtor’s choice of exemption, Federal or State, was improvident and should be changed, for ex- ample, where the court has ruled against the debtor with respect to a major exemption. Page 137 TITLE 11—BANKRUPTCY § 522 Under proposed 11 U.S.C. 541, all property of the debt- or becomes property of the estate, but the debtor is permitted to exempt certain property from property of the estate under this section. Property may be exempt- ed even if it is subject to a lien, but only the unencumbered portion of the property is to be counted in computing the ‘‘value’’ of the property for the pur- poses of exemption. Thus, for example, a residence worth $30,000 with a mortgage of $25,000 will be exemptable [sic] to the extent of $5,000. This follows current law. The remaining value of the property will be dealt with in the bankruptcy case as is any interest in property that is subject to a lien. As under current law, the debtor will be permitted to convert nonexempt property into exempt property be- fore filing a bankruptcy petition. See Hearings, pt. 3, at 1355–58. The practice is not fraudulent as to creditors and permits the debtor to make full use of the exemp- tions to which he is entitled under the law. Subsection (c) insulates exempt property from prepetition claims, except tax and alimony, mainte- nance, or support claims that are excepted from dis- charge. The bankruptcy discharge will not prevent en- forcement of valid liens. The rule of Long v. Bullard, 117 U.S. 617 (1886) [6 S.Ct. 917, 29 L.Ed. 1004], is accepted with respect to the enforcement of valid liens on non- exempt property as well as on exempt property. Cf. Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 583 (1935) [55 S.Ct. 854]. Subsection (d) specifies the Federal exemptions to which the debtor is entitled. They are derived in large part from the Uniform Exemptions Act, promulgated by the Commissioners of Uniform State Laws in Au- gust, 1976. Eleven categories of property are exempted. First is a homestead to the extent of $10,000, which may be claimed in real or personal property that the debtor or a dependent of the debtor uses as a residence. Sec- ond, the debtor may exempt a motor vehicle to the ex- tent of $1500. Third, the debtor may exempt household goods, furnishings, clothing, and similar household items, held primarily for the personal, family, or household use of the debtor or a dependent of the debt- or. ‘‘Animals’’ includes all animals, such as pets, live- stock, poultry, and fish, if they are held primarily for personal, family or household use. The limitation for third category items is $300 on any particular item. The debtor may also exempt up to $750 of personal jewelry. Paragraph (5) permits the exemption of $500, plus any unused amount of the homestead exemption, in any property, in order not to discriminate against the non- homeowner. Paragraph (6) grants the debtor up to $1000 in implements, professional books, or tools, of the trade of the debtor or a dependent. Paragraph (7) ex- empts a life insurance contract, other than a credit life insurance contract, owned by the debtor. This para- graph refers to the life insurance contract itself. It does not encompass any other rights under the contract, such as the right to borrow out the loan value. Because of this provision, the trustee may not surrender a life insurance contract, which remains property of the debtor if he chooses the Federal exemptions. Paragraph (8) permits the debtor to exempt up to $5000 in loan value in a life insurance policy owned by the debtor under which the debtor or an individual of whom the debtor is a dependent is the insured. The exemption provided by this paragraph and paragraph (7) will also include the debtor’s rights in a group insurance certifi- cate under which the insured is an individual of whom the debtor is a dependent (assuming the debtor has rights in the policy that could be exempted) or the debtor. A trustee is authorized to collect the entire loan value on every life insurance policy owned by the debtor as property of the estate. First, however, the debtor will choose which policy or policies under which the loan value will be exempted. The $5000 figure is re- duced by the amount of any automatic premium loan authorized after the date of the filing of the petition under section 542(d). Paragraph (9) exempts profes- sionally prescribed health aids. Paragraph (10) exempts certain benefits that are akin to future earnings of the debtor. These include social security, unemployment compensation, or public as- sistance benefits, veteran’s benefits, disability, illness, or unemployment benefits, alimony, support, or sepa- rate maintenance (but only to the extent reasonably necessary for the support of the debtor and any depend- ents of the debtor), and benefits under a certain stock bonus, pension, profitsharing, annuity or similar plan based on illness, disability, death, age or length of serv- ice. Paragraph (11) allows the debtor to exempt certain compensation for losses. These include crime victim’s reparation benefits, wrongful death benefits (with a reasonably necessary for support limitation), life insur- ance proceeds (same limitation), compensation for bod- ily injury, not including pain and suffering ($10,000 lim- itation), and loss of future earnings payments (support limitation). This provision in subparagraph (D)(11) is designed to cover payments in compensation of actual bodily injury, such as the loss of a limb, and is not in- tended to include the attendant costs that accompany such a loss, such as medical payments, pain and suf- fering, or loss of earnings. Those items are handled sep- arately by the bill. Subsection (e) protects the debtor’s exemptions, ei- ther Federal or State, by making unenforceable in a bankruptcy case a waiver of exemptions or a waiver of the debtor’s avoiding powers under the following sub- sections. Subsection (f) protects the debtor’s exemptions, his discharge, and thus his fresh start by permitting him to avoid certain liens on exempt property. The debtor may avoid a judicial lien on any property to the extent that the property could have been exempted in the ab- sence of the lien, and may similarly avoid a nonpur- chase-money security interest in certain household and personal goods. The avoiding power is independent of any waiver of exemptions. Subsection (g) gives the debtor the ability to exempt property that the trustee recovers under one of the trustee’s avoiding powers if the property was involun- tarily transferred away from the debtor (such as by the fixing of a judicial lien) and if the debtor did not con- ceal the property. The debtor is also permitted to ex- empt property that the trustee recovers as the result of the avoiding of the fixing of certain security interests to the extent that the debtor could otherwise have ex- empted the property. If the trustee does not pursue an avoiding power to recover a transfer of property that would be exempt, the debtor may pursue it and exempt the property, if the transfer was involuntary and the debtor did not conceal the property. If the debtor wishes to preserve his right to pursue an action under this provision, then he must intervene in any action brought by the trustee based on the same cause of action. It is not intended that the debtor be given an additional opportunity to avoid a transfer or that the transferee have to defend the same action twice. Rather, the section is primarily designed to give the debtor the rights the trustee could have pursued if the trustee chooses not to pursue them. The debtor is given no greater rights under this provi- sion than the trustee, and thus the debtor’s avoiding powers under proposed 11 U.S.C. 544, 545, 547, and 548, are subject to proposed 11 U.S.C. 546, as are the trust- ee’s powers. These subsections are cumulative. The debtor is not required to choose which he will use to gain an exemp- tion. Instead, he may use more than one in any par- ticular instance, just as the trustee’s avoiding powers are cumulative. Subsection (i) permits recovery by the debtor of prop- erty transferred in an avoided transfer from either the initial or subsequent transferees. It also permits pre- serving a transfer for the benefit of the debtor. Under either case the debtor may exempt the property recov- ered or preserved. Subsection (k) makes clear that the debtor’s aliquot share of the costs and expenses [for] recovery of prop- erty that the trustee recovers and the debtor later ex- empts, and any costs and expenses of avoiding a trans- fer by the debtor that the debtor has not already paid. Page 138 TITLE 11—BANKRUPTCY § 522 Subsection (l) requires the debtor to file a list of property that he claims as exempt from property of the estate. Absent an objection to the list, the property is exempted. A dependent of the debtor may file it and thus be protected if the debtor fails to file the list. Subsection (m) requires the clerk of the bankruptcy court to give notice of any exemptions claimed under subsection (l), in order that parties in interest may have an opportunity to object to the claim. Subsection (n) provides the rule for a joint case: each debtor is entitled to the Federal exemptions provided under this section or to the State exemptions, which- ever the debtor chooses. Editorial Notes REFERENCES IN TEXT The Federal Rules of Bankruptcy Procedure, referred to in subsec. (b)(1), are set out in the Appendix to this title. The Internal Revenue Code of 1986, referred to in sub- secs. (b)(3)(C), (4), (d)(10)(E)(iii), (12), and (n), is classi- fied generally to Title 26, Internal Revenue Code. Sections 3(a)(47), 12, and 15(d) of the Securities Ex- change Act of 1934, referred to in subsec. (q)(1)(B)(i), (ii), are classified to sections 78c(a)(47), 78l, and 78o(d), respectively, of Title 15, Commerce and Trade. Section 6 of the Securities Exchange Act of 1933, re- ferred to in subsec. (q)(1)(B)(ii), is classified to section 77f of Title 15, Commerce and Trade. AMENDMENTS 2010—Subsec. (b)(3)(A). Pub. L. 111–327, § 2(a)(17)(A), substituted ‘‘petition to the place’’ for ‘‘petition at the place’’ and ‘‘located in a single State’’ for ‘‘located at a single State’’. Subsec. (c)(1). Pub. L. 111–327, § 2(a)(17)(B), substituted ‘‘such paragraph’’ for ‘‘section 523(a)(5)’’. 2005—Subsec. (b). Pub. L. 109–8, § 224(a)(1)(B)–(F), des- ignated introductory provisions of subsec. (b) as par. (1), substituted ‘‘paragraph (3)’’ for ‘‘paragraph (2)’’ in two places and ‘‘paragraph (2)’’ for ‘‘paragraph (1)’’ wherever appearing, struck out ‘‘Such property is—’’ after ‘‘case is filed.’’, and struck out former par. (1) which read: ‘‘property that is specified under sub- section (d) of this section, unless the State law that is applicable to the debtor under paragraph (2)(A) of this subsection specifically does not so authorize; or, in the alternative,’’. Subsec. (b)(2). Pub. L. 109–8, § 224(a)(1)(B), added par. (2). Former par. (2) redesignated (3). Subsec. (b)(2)(C). Pub. L. 109–8, § 224(a)(1)(A)(i)–(iii), added subpar. (C). Subsec. (b)(3). Pub. L. 109–8, § 307(2), inserted ‘‘If the effect of the domiciliary requirement under subpara- graph (A) is to render the debtor ineligible for any ex- emption, the debtor may elect to exempt property that is specified under subsection (d).’’ at end. Pub. L. 109–8, § 224(a)(1)(A)(iv), redesignated par. (2) as (3) and inserted introductory provisions. Subsec. (b)(3)(A). Pub. L. 109–8, § 308(1), inserted ‘‘sub- ject to subsections (o) and (p),’’ before ‘‘any property’’. Pub. L. 109–8, § 307(1), substituted ‘‘730 days’’ for ‘‘180 days’’ and ‘‘or if the debtor’s domicile has not been lo- cated at a single State for such 730-day period, the place in which the debtor’s domicile was located for 180 days immediately preceding the 730-day period or for a longer portion of such 180-day period than in any other place’’ for ‘‘, or for a longer portion of such 180-day pe- riod than in any other place’’. Subsec. (b)(4). Pub. L. 109–8, § 224(a)(1)(G), added par. (4). Subsec. (c)(1). Pub. L. 109–8, § 216(1), added par. (1) and struck out former par. (1) which read as follows: ‘‘a debt of a kind specified in section 523(a)(1) or 523(a)(5) of this title;’’. Subsec. (d). Pub. L. 109–8, § 224(a)(2)(A), substituted ‘‘subsection (b)(2)’’ for ‘‘subsection (b)(1)’’ in introduc- tory provisions. Subsec. (d)(12). Pub. L. 109–8, § 224(a)(2)(B), added par. (12). Subsec. (f)(1)(A). Pub. L. 109–8, § 216(2), substituted ‘‘a debt of a kind that is specified in section 523(a)(5); or’’ for ‘‘a debt— ‘‘(i) to a spouse, former spouse, or child of the debt- or, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree or other order of a court of record, determination made in accordance with State or territorial law by a governmental unit, or property settlement agreement; and ‘‘(ii) to the extent that such debt— ‘‘(I) is not assigned to another entity, volun- tarily, by operation of law, or otherwise; and ‘‘(II) includes a liability designated as alimony, maintenance, or support, unless such liability is ac- tually in the nature of alimony, maintenance or support.; or’’. Subsec. (f)(4). Pub. L. 109–8, § 313(a), added par. (4). Subsec. (g)(2). Pub. L. 109–8, § 216(3), substituted ‘‘sub- section (f)(1)(B)’’ for ‘‘subsection (f)(2)’’. Subsec. (n). Pub. L. 109–8, § 224(e)(1), added subsec. (n). Subsec. (o). Pub. L. 109–8, § 308(2), added subsec. (o). Subsecs. (p), (q). Pub. L. 109–8, § 322(a), added subsecs. (p) and (q). 2000—Subsec. (c)(4). Pub. L. 106–420 added par. (4). 1994—Subsec. (b). Pub. L. 103–394, § 501(d)(12)(A), sub- stituted ‘‘Federal Rules of Bankruptcy Procedure’’ for ‘‘Bankruptcy Rules’’. Subsec. (d)(1) to (6). Pub. L. 103–394, § 108(d)(1)–(6), sub- stituted ‘‘$15,000’’ for ‘‘$7,500’’ in par. (1), ‘‘$2,400’’ for ‘‘$1,200’’ in par. (2), ‘‘$400’’ and ‘‘$8,000’’ for ‘‘$200’’ and ‘‘$4,000’’, respectively, in par. (3), ‘‘$1,000’’ for ‘‘$500’’ in par. (4), ‘‘$800’’ and ‘‘$7,500’’ for ‘‘$400’’ and ‘‘$3,750’’, re- spectively, in par. (5), and ‘‘$1,500’’ for ‘‘$750’’ in par. (6). Subsec. (d)(8). Pub. L. 103–394, § 108(d)(7), substituted ‘‘$8,000’’ for ‘‘$4,000’’. Subsec. (d)(10)(E)(iii). Pub. L. 103–394, § 501(d)(12)(B), substituted ‘‘or 408’’ for ‘‘408, or 409’’ and ‘‘Internal Rev- enue Code of 1986’’ for ‘‘Internal Revenue Code of 1954 (26 U.S.C. 401(a), 403(a), 403(b), 408, or 409)’’. Subsec. (d)(11)(D). Pub. L. 103–394, § 108(d)(8), sub- stituted ‘‘$15,000’’ for ‘‘$7,500’’. Subsec. (f)(1). Pub. L. 103–394, §§ 303(3), 310(1), des- ignated existing provisions as par. (1) and inserted ‘‘but subject to paragraph (3)’’ after ‘‘waiver of exemptions’’ in introductory provisions. Former par. (1) redesig- nated subpar. (A) of par. (1). Subsec. (f)(1)(A). Pub. L. 103–394, §§ 303(2), 304(d), re- designated par. (1) as subpar. (A) of par. (1) and inserted ‘‘, other than a judicial lien that secures a debt— ‘‘(i) to a spouse, former spouse, or child of the debt- or, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree or other order of a court of record, determination made in accordance with State or territorial law by a governmental unit, or property settlement agreement; and ‘‘(ii) to the extent that such debt— ‘‘(I) is not assigned to another entity, volun- tarily, by operation of law, or otherwise; and ‘‘(II) includes a liability designated as alimony, maintenance, or support, unless such liability is ac- tually in the nature of alimony, maintenance or support.’’ Subsec. (f)(1)(B). Pub. L. 103–394, § 303(1), redesignated par. (2) as subpar. (B) of par. (1) and subpars. (A) to (C) of par. (2) as cls. (i) to (iii), respectively, of subpar. (B) of par. (1). Subsec. (f)(2). Pub. L. 103–394, § 303(4), added par. (2). Former par. (2) redesignated subpar. (B) of par. (1). Subsec. (f)(3). Pub. L. 103–394, § 310(2), added par. (3). 1990—Subsec. (c)(3). Pub. L. 101–647 added par. (3). 1986—Subsec. (h)(1). Pub. L. 99–554, § 283(i)(1), sub- stituted ‘‘553 of this title’’ for ‘‘553 of this tittle’’. Subsec. (i)(2). Pub. L. 99–554, § 283(i)(2), substituted ‘‘this’’ for ‘‘his’’ after ‘‘subsection (g) of’’. 1984—Subsec. (a)(2). Pub. L. 98–353, § 453(a), inserted ‘‘or, with respect to property that becomes property of Page 139 TITLE 11—BANKRUPTCY § 522 an estate after such date, as of the date such property becomes property of the estate’’. Subsec. (b). Pub. L. 98–353, § 306(a), inserted provision that in joint cases filed under section 302 of this title and individual cases filed under section 301 or 303 of this title by or against debtors who are husband and wife, and whose estates are ordered to be jointly admin- istered under Rule 1015(b) of the Bankruptcy Rules, one debtor may not elect to exempt property listed in para- graph (1) and the other debtor elect to exempt property listed in paragraph (2) of this subsection, but that if the parties cannot agree on the alternative to be elected, they shall be deemed to elect paragraph (1), where such election is permitted under the law of the jurisdiction where the case is filed. Subsec. (c). Pub. L. 98–353, § 453(b), amended subsec. (c) generally. Prior to amendment, subsec. (c) read as follows: ‘‘Unless the case is dismissed, property ex- empted under this section is not liable during or after the case for any debt of the debtor that arose, or that is determined under section 502 of this title as if such claim had arisen before the commencement of the case, except— ‘‘(1) a debt of a kind specified in section 523(a)(1) or section 523(a)(5) of this title; or ‘‘(2) a lien that is— ‘‘(A) not avoided under section 544, 545, 547, 548, 549, or 724(a) of this title; ‘‘(B) not voided under section 506(d) of this title; or ‘‘(C)(i) a tax lien, notice of which is properly filed; and ‘‘(ii) avoided under section 545(2) of this title.’’ Subsec. (d)(3). Pub. L. 98–353, § 306(b), inserted ‘‘or $4,000 in aggregate value’’. Subsec. (d)(5). Pub. L. 98–353, § 306(c), amended par. (5) generally. Prior to amendment, par. (5) read as follows: ‘‘The debtor’s aggregate interest, not to exceed in value $400 plus any unused amount of the exemption provided under paragraph (1) of this subsection, in any prop- erty.’’ Subsec. (e). Pub. L. 98–353, § 453(c), substituted ‘‘an ex- emption’’ for ‘‘exemptions’’. Subsec. (m). Pub. L. 98–353, § 306(d), substituted ‘‘Sub- ject to the limitation in subsection (b), this section shall apply separately with respect to each debtor in a joint case’’ for ‘‘This section shall apply separately with respect to each debtor in a joint case’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–8 effective 180 days after Apr. 20, 2005, with amendments by sections 216, 224(a), (e)(1), 307, and 313(a) of Pub. L. 109–8 not applicable with respect to cases commenced under this title before such effective date, except as otherwise provided, and amendments by sections 308 and 322(a) of Pub. L. 109–8 applicable with respect to cases commenced under this title on or after Apr. 20, 2005, see section 1501 of Pub. L. 109–8, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1994 AMENDMENT Amendment by Pub. L. 103–394 effective Oct. 22, 1994, and not applicable with respect to cases commenced under this title before Oct. 22, 1994, see section 702 of Pub. L. 103–394, set out as a note under section 101 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–554 effective 30 days after Oct. 27, 1986, see section 302(a) of Pub. L. 99–554, set out as a note under section 581 of Title 28, Judiciary and Judicial Procedure. EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–353 effective with respect to cases filed 90 days after July 10, 1984, see section 552(a) of Pub. L. 98–353, set out as a note under section 101 of this title. Court Rules and Judicial Documents ADJUSTMENT OF DOLLAR AMOUNTS The dollar amounts specified in this section were ad- justed by notices of the Judicial Conference of the United States pursuant to section 104 of this title as follows: By notice dated Jan. 31, 2022, 87 F.R. 6625, effective Apr. 1, 2022, in subsec. (d)(1), dollar amount ‘‘25,150’’ was adjusted to ‘‘27,900’’; in subsec. (d)(2), dollar amount ‘‘4,000’’ was adjusted to ‘‘4,450’’; in subsec. (d)(3), dollar amounts ‘‘625’’ and ‘‘13,400’’ were adjusted to ‘‘700’’ and ‘‘14,875’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,700’’ was adjusted to ‘‘1,875’’; in subsec. (d)(5), dollar amounts ‘‘1,325’’ and ‘‘12,575’’ were adjusted to ‘‘1,475’’ and ‘‘13,950’’, respectively; in subsec. (d)(6), dollar amount ‘‘2,525’’ was adjusted to ‘‘2,800’’; in subsec. (d)(8), dollar amount ‘‘13,400’’ was adjusted to ‘‘14,875’’; in subsec. (d)(11)(D), dollar amount ‘‘25,150’’ was ad- justed to ‘‘27,900’’; in subsec. (f)(3), dollar amount ‘‘6,825’’ was adjusted to ‘‘7,575’’; in subsec. (f)(4), dollar amount ‘‘725’’ was adjusted to ‘‘800’’ each time it ap- peared; in subsec. (n), dollar amount ‘‘1,362,800’’ was ad- justed to ‘‘1,512,350’’; in subsec. (p), dollar amount ‘‘170,350’’ was adjusted to ‘‘189,050’’; and, in subsec. (q), dollar amount ‘‘170,350’’ was adjusted to ‘‘189,050’’. See notice of the Judicial Conference of the United States set out as a note under section 104 of this title. By notice dated Feb. 5, 2019, 84 F.R. 3488, effective Apr. 1, 2019, in subsec. (d)(1), dollar amount ‘‘23,675’’ was adjusted to ‘‘25,150’’; in subsec. (d)(2), dollar amount ‘‘3,775’’ was adjusted to ‘‘4,000’’; in subsec. (d)(3), dollar amounts ‘‘600’’ and ‘‘12,625’’ were adjusted to ‘‘625’’ and ‘‘13,400’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,600’’ was adjusted to ‘‘1,700’’; in subsec. (d)(5), dollar amounts ‘‘1,250’’ and ‘‘11,850’’ were adjusted to ‘‘1,325’’ and ‘‘12,575’’, respectively; in subsec. (d)(6), dollar amount ‘‘2,375’’ was adjusted to ‘‘2,525’’; in subsec. (d)(8), dollar amount ‘‘12,625’’ was adjusted to ‘‘13,400’’; in subsec. (d)(11)(D), dollar amount ‘‘23,675’’ was ad- justed to ‘‘25,150’’; in subsec. (f)(3), dollar amount ‘‘6,425’’ was adjusted to ‘‘6,825’’; in subsec. (f)(4), dollar amount ‘‘675’’ was adjusted to ‘‘725’’ each time it ap- peared; in subsec. (n), dollar amount ‘‘1,283,025’’ was ad- justed to ‘‘1,362,800’’; in subsec. (p), dollar amount ‘‘160,375’’ was adjusted to ‘‘170,350’’; and, in subsec. (q), dollar amount ‘‘160,375’’ was adjusted to ‘‘170,350’’. By notice dated Feb. 16, 2016, 81 F.R. 8748, effective Apr. 1, 2016, in subsec. (d)(1), dollar amount ‘‘22,975’’ was adjusted to ‘‘23,675’’; in subsec. (d)(2), dollar amount ‘‘3,675’’ was adjusted to ‘‘3,775’’; in subsec. (d)(3), dollar amounts ‘‘575’’ and ‘‘12,250’’ were adjusted to ‘‘600’’ and ‘‘12,625’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,550’’ was adjusted to ‘‘1,600’’; in subsec. (d)(5), dollar amounts ‘‘1,225’’ and ‘‘11,500’’ were adjusted to ‘‘1,250’’ and ‘‘11,850’’, respectively; in subsec. (d)(6), dollar amount ‘‘2,300’’ was adjusted to ‘‘2,375’’; in subsec. (d)(8), dollar amount ‘‘12,250’’ was adjusted to ‘‘12,625’’; in subsec. (d)(11)(D), dollar amount ‘‘22,975’’ was ad- justed to ‘‘23,675’’; in subsec. (f)(3), dollar amount ‘‘6,225’’ was adjusted to ‘‘6,425’’; in subsec. (f)(4), dollar amount ‘‘650’’ was adjusted to ‘‘675’’ each time it ap- peared; in subsec. (n), dollar amount ‘‘1,245,475’’ was ad- justed to ‘‘1,283,025’’; in subsec. (p), dollar amount ‘‘155,675’’ was adjusted to ‘‘160,375’’; and, in subsec. (q), dollar amount ‘‘155,675’’ was adjusted to ‘‘160,375’’. By notice dated Feb. 12, 2013, 78 F.R. 12089, effective Apr. 1, 2013, in subsec. (d)(1), dollar amount ‘‘21,625’’ was adjusted to ‘‘22,975’’; in subsec. (d)(2), dollar amount ‘‘3,450’’ was adjusted to ‘‘3,675’’; in subsec. (d)(3), dollar amounts ‘‘550’’ and ‘‘11,525’’ were adjusted to ‘‘575’’ and ‘‘12,250’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,450’’ was adjusted to ‘‘1,550’’; in subsec. (d)(5), dollar amounts ‘‘1,150’’ and ‘‘10,825’’ were adjusted to ‘‘1,225’’ and ‘‘11,500’’, respectively; in subsec. (d)(6), dollar amount ‘‘2,175’’ was adjusted to ‘‘2,300’’; in subsec. (d)(8), dollar amount ‘‘11,525’’ was adjusted to ‘‘12,250’’; in subsec. (d)(11)(D), dollar amount ‘‘21,625’’ was ad- justed to ‘‘22,975’’; in subsec. (f)(3), dollar amount ‘‘5,850’’ was adjusted to ‘‘6,225’’; in subsec. (f)(4), dollar Page 140 TITLE 11—BANKRUPTCY § 523 1 So in original. Probably should be followed by a comma. 2 See Adjustment of Dollar Amounts notes below. amount ‘‘600’’ was adjusted to ‘‘650’’ each time it ap- peared; in subsec. (n), dollar amount ‘‘1,171,650’’ was ad- justed to ‘‘1,245,475’’; in subsec. (p), dollar amount ‘‘146,450’’ was adjusted to ‘‘155,675’’; and, in subsec. (q), dollar amount ‘‘146,450’’ was adjusted to ‘‘155,675’’. By notice dated Feb. 19, 2010, 75 F.R. 8747, effective Apr. 1, 2010, in subsec. (d)(1), dollar amount ‘‘20,200’’ was adjusted to ‘‘21,625’’; in subsec. (d)(2), dollar amount ‘‘3,225’’ was adjusted to ‘‘3,450’’; in subsec. (d)(3), dollar amounts ‘‘525’’ and ‘‘10,775’’ were adjusted to ‘‘550’’ and ‘‘11,525’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,350’’ was adjusted to ‘‘1,450’’; in subsec. (d)(5), dollar amounts ‘‘1,075’’ and ‘‘10,125’’ were adjusted to ‘‘1,150’’ and ‘‘10,825’’, respectively; in subsec. (d)(6), dollar amount ‘‘2,025’’ was adjusted to ‘‘2,175’’; in subsec. (d)(8), dollar amount ‘‘10,775’’ was adjusted to ‘‘11,525’’; in subsec. (d)(11)(D), dollar amount ‘‘20,200’’ was ad- justed to ‘‘21,625’’; in subsec. (f)(3)(B), dollar amount ‘‘5,475’’ was adjusted to ‘‘5,850’’; in subsec. (f)(4)(B), dol- lar amount ‘‘550’’ was adjusted to ‘‘600’’ each time it ap- peared; in subsec. (n), dollar amount ‘‘1,095,000’’ was ad- justed to ‘‘1,171,650’’; in subsec. (p)(1), dollar amount ‘‘136,875’’ was adjusted to ‘‘146,450’’; and, in subsec. (q)(1), dollar amount ‘‘136,875’’ was adjusted to ‘‘146,450’’. By notice dated Feb. 7, 2007, 72 F.R. 7082, effective Apr. 1, 2007, in subsec. (d)(1), dollar amount ‘‘18,450’’ was adjusted to ‘‘20,200’’; in subsec. (d)(2), dollar amount ‘‘2,950’’ was adjusted to ‘‘3,225’’; in subsec. (d)(3), dollar amounts ‘‘475’’ and ‘‘9,850’’ were adjusted to ‘‘525’’ and ‘‘10,775’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,225’’ was adjusted to ‘‘1,350’’; in subsec. (d)(5), dollar amounts ‘‘975’’ and ‘‘9,250’’ were adjusted to ‘‘1,075’’ and ‘‘10,125’’, respectively; in subsec. (d)(6), dollar amount ‘‘1,850’’ was adjusted to ‘‘2,025’’; in subsec. (d)(8), dollar amount ‘‘9,850’’ was adjusted to ‘‘10,775’’; in subsec. (d)(11)(D), dollar amount ‘‘18,450’’ was adjusted to ‘‘20,200’’; in subsec. (f)(3), dollar amount ‘‘5,000’’ was ad- justed to ‘‘5,475’’; in subsec. (f)(4), dollar amount ‘‘500’’ was adjusted to ‘‘550’’ each time it appeared; in subsec. (n), dollar amount ‘‘1,000,000’’ was adjusted to ‘‘1,095,000’’; in subsec. (p), dollar amount ‘‘125,000’’ was adjusted to ‘‘136,875’’; and, in subsec. (q), dollar amount ‘‘125,000’’ was adjusted to ‘‘136,875’’. By notice dated Feb. 18, 2004, 69 F.R. 8482, effective Apr. 1, 2004, in subsec. (d)(1), dollar amount ‘‘17,425’’ was adjusted to ‘‘18,450’’; in subsec. (d)(2), dollar amount ‘‘2,775’’ was adjusted to ‘‘2,950’’; in subsec. (d)(3), dollar amounts ‘‘450’’ and ‘‘9,300’’ were adjusted to ‘‘475’’ and ‘‘9,850’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,150’’ was adjusted to ‘‘1,225’’; in subsec. (d)(5), dollar amounts ‘‘925’’ and ‘‘8,725’’ were adjusted to ‘‘975’’ and ‘‘9,250’’, respectively; in subsec. (d)(6), dollar amount ‘‘1,750’’ was adjusted to ‘‘1,850’’; in subsec. (d)(8), dollar amount ‘‘9,300’’ was adjusted to ‘‘9,850’’; and, in subsec. (d)(11)(D), dollar amount ‘‘17,425’’ was adjusted to ‘‘18,450’’. By notice dated Feb. 13, 2001, 66 F.R. 10910, effective Apr. 1, 2001, in subsec. (d)(1), dollar amount ‘‘16,150’’ was adjusted to ‘‘17,425’’; in subsec. (d)(2), dollar amount ‘‘2,575’’ was adjusted to ‘‘2,775’’; in subsec. (d)(3), dollar amounts ‘‘425’’ and ‘‘8,625’’ were adjusted to ‘‘450’’ and ‘‘9,300’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,075’’ was adjusted to ‘‘1,150’’; in subsec. (d)(5), dollar amounts ‘‘850’’ and ‘‘8,075’’ were adjusted to ‘‘925’’ and ‘‘8,725’’, respectively; in subsec. (d)(6), dollar amount ‘‘1,625’’ was adjusted to ‘‘1,750’’; in subsec. (d)(8), dollar amount ‘‘8,625’’ was adjusted to ‘‘9,300’’; and, in subsec. (d)(11)(D), dollar amount ‘‘16,150’’ was adjusted to ‘‘17,425’’. By notice dated Feb. 3, 1998, 63 F.R. 7179, effective Apr. 1, 1998, in subsec. (d)(1), dollar amount ‘‘15,000’’ was adjusted to ‘‘16,150’’; in subsec. (d)(2), dollar amount ‘‘2,400’’ was adjusted to ‘‘2,575’’; in subsec. (d)(3), dollar amounts ‘‘400’’ and ‘‘8,000’’ were adjusted to ‘‘425’’ and ‘‘8,625’’, respectively; in subsec. (d)(4), dollar amount ‘‘1,000’’ was adjusted to ‘‘1,075’’; in subsec. (d)(5), dollar amounts ‘‘800’’ and ‘‘7,500’’ were adjusted to ‘‘850’’ and ‘‘8,075’’, respectively; in subsec. (d)(6), dollar amount ‘‘1,500’’ was adjusted to ‘‘1,625’’; in subsec. (d)(8), dollar amount ‘‘8,000’’ was adjusted to ‘‘8,625’’; and, in subsec. (d)(11)(D), dollar amount ‘‘15,000’’ was adjusted to ‘‘16,150’’. § 523. Exceptions to discharge (a) A discharge under section 727, 1141, 1192 1 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt— (1) for a tax or a customs duty— (A) of the kind and for the periods speci- fied in section 507(a)(3) or 507(a)(8) of this title, whether or not a claim for such tax was filed or allowed; (B) with respect to which a return, or equivalent report or notice, if required— (i) was not filed or given; or (ii) was filed or given after the date on which such return, report, or notice was last due, under applicable law or under any extension, and after two years before the date of the filing of the petition; or (C) with respect to which the debtor made a fraudulent return or willfully attempted in any manner to evade or defeat such tax; (2) for money, property, services, or an ex- tension, renewal, or refinancing of credit, to the extent obtained by— (A) false pretenses, a false representation, or actual fraud, other than a statement re- specting the debtor’s or an insider’s finan- cial condition; (B) use of a statement in writing— (i) that is materially false; (ii) respecting the debtor’s or an insid- er’s financial condition; (iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and (iv) that the debtor caused to be made or published with intent to deceive; or (C)(i) for purposes of subparagraph (A)— (I) consumer debts owed to a single cred- itor and aggregating more than $500 2 for luxury goods or services incurred by an in- dividual debtor on or within 90 days before the order for relief under this title are pre- sumed to be nondischargeable; and (II) cash advances aggregating more than $750 2 that are extensions of consumer credit under an open end credit plan ob- tained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be non- dischargeable; and (ii) for purposes of this subparagraph— (I) the terms ‘‘consumer’’, ‘‘credit’’, and ‘‘open end credit plan’’ have the same meanings as in section 103 of the Truth in Lending Act; and (II) the term ‘‘luxury goods or services’’ does not include goods or services reason- ably necessary for the support or mainte- nance of the debtor or a dependent of the debtor; (3) neither listed nor scheduled under section 521(a)(1) of this title, with the name, if known