If you file for Chapter 7 bankruptcy in Delaware, you can protect some or all of your property with Delaware’s bankruptcy exemptions. The bankruptcy exemptions in Delaware also play a role in Chapter 13 bankruptcy. Read on to learn about what property is covered by Delaware’s bankruptcy exemptions.
For a general overview of bankruptcy exemptions, how they work, and which ones you can use, visit the Bankruptcy Exemption topic page.
Delaware Requires Debtors to Use State Exemptions
Delaware is an “opt out” state, meaning you are not permitted to use the federal bankruptcy exemptions when you file a bankruptcy in Delaware. This means that bankruptcy filers in Delaware may only exempt property using the Delaware exemptions.
Married Couples May Double Delaware Exemptions
Married couples filing a joint bankruptcy in Delaware may double the exemption amount. This means that each spouse may claim the full exemption amount for any property in which the spouse has ownership interest. For example, if both spouses own a vehicle and they file jointly, they can double the amount of their personal property exemption in order to protect the car’s value.
Common Delaware Exemptions
Here are some of the most common exemptions available under Delaware law. Unless otherwise noted, all references are to the Delaware Code Annotated.
When you file a bankruptcy in Delaware, you may exempt a total of $25,000 of any personal and/or real property described below, not including tools of the trade, retirement accounts, and your principal residence.
Homestead or Residential Property
The homestead exemption protects a certain amount of equity in your home or principal residence. A debtor is allowed to exempt up to $125,000 in real property or a manufactured home that you use as your principal residence. In addition, any interest that debtor has in a real estate held as a tenant by the entirety is exempt. Del. Code Ann. tit. 10, § 4914
For more details about how the homestead exemption works in Delaware, see The Delaware Homestead Exemption.
Life insurance proceeds, group life insurance policy or proceeds, and life insurance proceeds if the policy prohibits using them to pay creditors. Del. Code Ann. tit. 18, § 2725, 2727, 2729
Up to $15,000 of equity in a motor vehicle, if necessary for your employment. Del. Code Ann. tit. 10, § 4914
To learn more about how to exempt your motor vehicle under Delaware law, visit The Delaware Motor Vehicle Exemption in Bankruptcy.
Family bible and books, family pictures, pew or seat in a place of public worship, burial plot, and you and your family’s clothing. Del. Code Ann. tit. 10, §4902
Tools necessary for your business, not to exceed $75 in New Castle and Sussex Counties or $50 in Kent County.
Sewing machines and pianos for personal use.
Pension, Retirement, and Life Insurance Benefits
Amounts payable under retirement plans, annuities, and insurance contracts. Del. Code Ann. tit. 10, § 4915
Kent County employees pensions. Del. Code Ann. tit. 9, § 4316
Police officers’ pensions. Del. Code Ann. tit. 11, § 8803
State employees pensions. Del. Code Ann. tit. 29, § 5503
Volunteer firefighters’ pensions. Del. Code Ann. tit. 16, § 6653
85% of unpaid wages. Del. Code Ann. tit. 10, § 4913
Educational Savings Plans
Delaware college investment plan accounts. Del. Code Ann. tit. 10, § 4916
Unemployment compensation benefits. Del. Code Ann., tit. 19, § 3374
Workers’ compensation benefits. Del. Code Ann. tit. 19, § 2355
Tools of the Trade
A vehicle or tools necessary for your employment, up to $15,000 in value. Del. Code Ann. tit 10, § 4914
The head of household may protect an additional $500 worth of any other personal property, except tools of the trade. Del Code Ann. tit. 10, § 4903. (To learn more, see The Delaware Wildcard Exemption.)
Confirming the Status of Delaware’s Bankruptcy Exemptions
Delaware’s exemption amounts are adjusted periodically. To make sure you have the most recent figures, be sure to check for any updates at the official website of the Delaware Code at http://delcode.delaware.gov.
Learn more about filing for bankruptcy in Delaware.