Definition: Federal and state law provides for exemptions which permit a debtor to keep certain types of property after filing for bankruptcy. For example, in California, you may exempt any retirement account that is ERISA-qualified in an unlimited amount. Exempt property cannot be seized and sold by a bankruptcy trustee for distribution to your creditors.

Creditors and the trustee have 30 days from the filing of your claims of exemption to object to those claims.


The bankruptcy court will then weigh the issues to determine if the claims of exemption are valid. If a claim of exemption is determined to be invalid, the debtor must turn over the property to the trustee.

Examples: Social Security income is exempt under the federal exemption statute 11 U.S.C. section 522(d)(10)(a).