The South Dakota Homestead Exemption

Most people want to know whether they can keep valuable property before filing for bankruptcy—especially a home. If you qualify to use the South Dakota homestead exemption, you can protect some or all of the equity in your house. In this article, we explain:

• how much the South Dakota homestead exemption will cover, and
• how to apply it in your bankruptcy case.

For more bankruptcy information, read Filing for Bankruptcy in South Dakota. Not only will you find answers, but it includes helpful checklists and a link to an interactive bankruptcy quiz.

Homestead Exemptions Available in a South Dakota Bankruptcy

In South Dakota, you'll use South Dakota's state exemptions—the federal bankruptcy exemptions aren't available (some states allow residents to choose between the two sets). However, you can supplement South Dakota's state exemptions with the federal nonbankruptcy exemptions.

To help you make an informed choice, we've listed the homestead exemption amount below. We've also included links to the federal and state exemption lists that apply in your case, so you'll have an easier time deciding whether bankruptcy will work for you.

If you're married, remember that spouses can double some exemption amounts, but not all. Find out about other filing considerations for spouses.

Property Protected by the South Dakota Homestead Exemption

In South Dakota, homeowners can exempt an unlimited dollar amount of equity in real property, including a home or condominium. However, the South Dakota system does have acreage limitations. If the real property is located within a town, it cannot exceed more than one acre. If it is located anywhere else, it cannot exceed 160 acres.

A mobile home is also covered, but it cannot be larger than 240 square feet at the base. Also, it must be registered in South Dakota at least six months before claiming the exemption.

South Dakota has a few other rules that probably don't apply to you, but here they are just in case:

• If you have two or more houses or mobile homes, you can only select one to keep and exempt as your homestead.
• If the homestead contains minerals that the United States government has claimed, then the maximum size is reduced to 40 acres outside of a town.
• Gold and silver mines, mills, or smelters, and related machinery cannot be homesteads.
• To help protect against foreclosure due to delinquent taxes, people over 70 and unmarried surviving spouses can protect up to $170,000 in equity after a sale. People under 70 can protect up to $60,000 in equity.

Timing Your South Dakota Bankruptcy

You can file for bankruptcy in South Dakota after living there for more than 180 days. However, you must live in South Dakota much longer before using South Dakota exemptions—at least 730 days before filing, to be exact. Otherwise, you'd use the previous state's exemptions.

But suppose you lived in multiple states during the two years before filing for bankruptcy. In that case, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing. (11 U.S.C. § 522(b)(3)(A).) Learn more about filing for bankruptcy after moving to a new state.

Also, to claim the total value of the South Dakota homestead exemption, you must have purchased and owned the property for at least 1,215 days before the bankruptcy filing. If you can't meet this requirement, your homestead exemption is limited by federal law to $170,350 (this figure will adjust on April 1, 2022).

Learn more about this requirement, the current amount of the federal cap, and other important exceptions to homestead exemptions.

Claiming the South Dakota Bankruptcy Homestead Exemption

In South Dakota, the homestead exemption is automatic—you don't have to file a homestead declaration with the recorder's office to claim the homestead exemption in bankruptcy. Instead, when filing for bankruptcy, you'll list your homestead exemption on Schedule C: The Property You Claim as Exempt when completing your bankruptcy forms. You can find out about other requirements you'll need to meet in Your Home in Chapter 7 or Your Home in Chapter 13.

Finding the South Dakota Bankruptcy Homestead Exemption Statute

You'll find South Dakota's homestead exemption in the South Dakota Codified Laws at §§ 43-31-1 through 43-31-5, 43-31-3(1), and 43-45-3(1), (2) on the South Dakota Legislature website, but the best way to protect your assets is by consulting with a local bankruptcy lawyer.

Need More Bankruptcy Help?

Did you know Nolo has been making the law easy for over fifty years? It's true—and we want to make sure you find what you need. Below you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!

We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.

Updated April 23, 2022