In bankruptcy, a homestead exemption protects equity in your home. Here you’ll find specific information about the homestead exemption in Washington D.C.
For information about how the homestead exemption works in both Chapter 7 and Chapter 13 bankruptcy, see The Homestead Exemption in Bankruptcy. For more articles on exemptions, see our Bankruptcy Exemptions area.
The Washington D.C. Homestead Exemption Amount
Under the District of Columbia exemption system, homeowners may exempt the entire value of their homes or other property covered by the homestead exemption. However, federal law places some limits on this exemption, depending on when you bought the home. If you bought your home within the 1,215 days before filing bankruptcy, your exemption is limited to $146,450. However, this limit does not apply to any value transferred from your previous principal residence, acquired prior to 1,215 days before filing bankruptcy, if that property was also in the District of Columbia. If you purchased your residence more than 1,215 days before filing bankruptcy, your homestead exemption amount is unlimited.
What Property Does the Homestead Exemption Apply to?
In the District of Columbia, the homestead exemption applies to real property, including your home or condominium, or your interest or your dependents’ interest in a co-op in which you or your dependents reside. The District of Columbia homestead exemption can also be used to protect your interest in a burial plot purchased for you or your dependents.
Non-D.C. Residents Might Be Able to Use the D.C. Homestead Exemption
The Washington D.C. homestead exemption may also apply to you if you reside outside of D.C., but earn the majority of your livelihood in the District of Columbia.
Can You Use the Federal Bankruptcy Exemption?
In Washington D.C., can use either the D.C. exemption system or the federal bankruptcy exemption system (but you can’t pick and choose different exemptions from each system – you have to use all D.C. exemptions or all federal exemptions.)
The federal bankruptcy homestead exemption amount is $21,625. The exemption may be used for homes, condos, co-ops, mobile homes, and burial plots. Married couples may double this exemption. You can find the federal bankruptcy homestead exemption at 11 U.S.C. §522(d)(1) and (5).
In the District of Columbia, the homestead exemption is automatic – you don’t have to file a homestead declaration in order to claim the homestead exemption in bankruptcy.
Real Property Held as Tenancy in the Entirety in the District of Columbia
If property is held as a tenancy in the entirety, it means the property is jointly owned by a married couple as a single marital entity, not as individuals. Washington D.C. permits tenancies by the entirey.
If property is held as a tenancy in the entirety, it means the property is jointly owned by a married couple as a single marital entity, not as individuals. Washington D.C. permits tenancies by the entirety, and this may allow debtors to file bankruptcy and protect more than the homestead exemption amount.
If property is held as a tenancy in the entirety, it is owned as a whole by both married persons and creditors cannot take it to pay the debts of only one owner.For this reason, tenancy by the entirety is often referred to as a “super exemption,” although it is not actually an exemption.
There are limits to the protection provided by a tenancy in the entirety, however. If the bankruptcy filer has tax debts, or if both spouses are liable for a debt (for example, joint credit card debt or medical debt incurred during the course of the marriage), a tenancy by the entirety will not provide protection in excess of the federal homestead exemption.
Because the D.C. homestead exemption is unlimited, the tenancy by entirety law won't be useful unless you opt to use the federal exemptions system instead of the D.C. exemptions.
Additional Information About the D.C. Homestead Exemption
Other sections of Washington D.C. law provide specific protection for deposits on residential condominiums (DC ST Section 42-1904.09) and up to $50 of holdings in co-op associations (DC ST Section 29-928).
It is important to note that the District of Columbia homestead exemption does not prevent mechanic’s liens or tax liens from encumbering residential property, thus creditor’s holding such liens may still execute against your homestead.
Also, you can apply up to $8,075 of any unused portion of the D.C. homestead exemption to protect other property in bankruptcy.
Finding the District of Columbia Homestead Exemption Statute
The District of Columbia’s homestead exemption is found in the District of Columbia state statutes DC ST Section 15-501(a)(14). To learn how to find state statutes, check out Nolo’s Laws and Legal Research area.