Most people researching Chapter 7 bankruptcy carry the same fear into their search: file, and lose everything. That fear is understandable, but it doesn’t reflect how DC law actually works. Washington, DC’s exemption statutes are designed to let most filers keep the property they depend on every day. Their home, their car, their retirement savings. The question isn’t whether protection exists; it’s whether you claim it correctly.
That distinction matters more than most people realize. Our managing partner, Maurice “Mac” VerStandig, sits on the local rules committee for the United States Bankruptcy Court for the District of Columbia, which means he works directly alongside the court that administers every DC Chapter 7 case. What follows draws on that familiarity with how DC’s trustees and clerks actually handle these issues in practice, not just how the statutes read on paper.
How the Chapter 7 Trustee Decides What You Keep
When a Chapter 7 case is filed, a trustee is appointed to review the bankruptcy estate (the legal term for everything the debtor owns at the moment of filing). The trustee’s job is to compare each asset’s current fair market value against the applicable exemption amount. Purchase price is irrelevant; what matters is what something is worth today.
If an asset’s value falls entirely within the allowed exemption, it stays with you. If the value exceeds the exemption, the trustee can sell the asset, pay you the exempt portion, and use the remainder to repay creditors. Property with no non-exempt equity is typically abandoned back to the debtor through a process called trustee abandonment, without being sold.
Choosing Between DC and Federal Bankruptcy Exemptions
DC residents have a choice that not every state allows: you can use either DC’s own exemption schedule under DC Code 15-501 or the federal bankruptcy exemptions under 11 U.S.C. 522(d). You can’t mix and match. Electing one system means forgoing the other entirely, so the choice deserves careful thought before the petition is filed.
The stakes extend beyond the dollar amounts. DC case law, rooted in Estate of Wall, 440 F.2d 215 (D.C. Cir. 1971), and Morrison v. Potter, 764 A.2d 234 (D.C. 2000), recognizes that property held as tenancy by the entirety can be shielded from a debt owed by only one spouse. Tenancy by the entirety is a form of joint ownership available to married couples in DC where neither spouse can unilaterally transfer or encumber the property. That protection only applies when the debtor chooses DC’s state exemptions. Electing the federal schedule forfeits it.
There’s also a domicile requirement to keep in mind. A filer who hasn’t lived in DC for at least 730 days before filing may be required to use the exemptions of the state where they previously lived rather than DC’s own schedule. This is something that catches recent transplants off guard.
The Home, the Vehicle, & the Wildcard
DC’s homestead exemption under DC Code 15-501(a)(14) is one of the most protective in the country. It covers a debtor’s entire equity in a primary residence (whether a house, a condo, or a co-op) with no dollar cap under DC law itself.
There is, however, a federal anti-abuse rule that operates on top of DC’s unlimited exemption. Under 11 U.S.C. 522(p), if you acquired your home within 1,215 days before filing and elect DC’s state exemptions, the homestead protection is capped at $214,000. For cases filed between April 1, 2025 and March 31, 2028, that’s the operative number. If you’ve owned your home longer than 1,215 days, DC’s unlimited protection applies in full.
One nuance worth noting: the married couple doubling rule that applies to most DC exemptions does not extend to the homestead exemption. This matters when comparing DC’s system to the federal schedule, where a married couple filing jointly can double the homestead exemption. For couples with modest home equity, that comparison deserves attention.
Two other protections round out the most commonly relied-upon exemptions:
- Motor vehicle: Equity in one vehicle is protected up to $2,575 under DC’s schedule.
- Wildcard exemption: DC allows $850 for any property of the debtor’s choosing, plus up to $8,075 of any unused homestead exemption. For filers who don’t own real estate, that wildcard can reach nearly $9,000 and can be applied to a car, cash, or any other asset.
Two Separate Tools of the Trade Exemptions
This is one of the most frequently misunderstood areas of DC’s exemption schedule. Almost every source that covers it cites only a $300 exemption for professionals and artists, which understates what DC actually provides.
DC Code 15-501 contains two distinct protections in this category:
- DC Code 15-501(a)(4): Protects up to $1,625 in implements, professional books, or tools of the trade used by the debtor or a dependent. This is the primary tools of the trade exemption, and it applies broadly to tradespeople and professionals alike.
- DC Code 15-501(a)(13): A separate, narrower exemption protecting up to $300 in the library, office furniture, and implements of a professional person or artist. This is the figure most sources cite, but it isn’t the only one or even the larger of the two.
Household furnishings, clothing, and appliances fall under a third distinct category: DC Code 15-501(a)(2) protects $425 per item or $8,625 in aggregate across all household goods. Married couples filing jointly can double most of these figures, and the per-item cap provides meaningful protection for individual pieces of furniture or equipment that carry real value.
Retirement Funds & What the Protection Actually Covers
Retirement accounts are widely described as “fully protected” in bankruptcy, and for most filers that’s accurate. Plans qualified under Internal Revenue Code sections 401(a), 403(a), 403(b), 408, 408A, 414(d), and 414(e) (which includes traditional and Roth IRAs) are exempt under DC Code 15-501(a)(9).
But the protection isn’t unlimited. Under DC Code 15-501(a)(9)(B), contributions that exceeded the deductible amount under the tax code, and any earnings on that excess, aren’t automatically protected. Most wage earners who contribute within normal limits won’t hit this threshold, but someone who made large lump-sum contributions to shelter money shortly before filing may find those amounts scrutinized by the trustee.
An exemption that isn’t claimed is an exemption that doesn’t exist. Every asset must be disclosed on Schedule A/B, and the exemption for each protected asset must be affirmatively claimed on Schedule C when the petition is filed. A trustee isn’t required to apply an exemption the debtor failed to assert, and creditors can object to improperly claimed exemptions within 30 days of the conclusion of the meeting of creditors.
One final point: an exemption protects equity, not the loan attached to the property. If you owe $18,000 on a car worth $20,000, your equity is $2,000, and DC’s $2,575 vehicle exemption covers it. But the lender’s lien survives bankruptcy. To keep a financed vehicle or mortgaged home, you’ll need to either continue making payments or, in some cases, enter a reaffirmation agreement. This is a contract signed during the bankruptcy that reinstates your personal liability on the secured debt.
Understanding exactly what you can keep requires reviewing your actual asset list against the applicable exemptions before anything is filed. If you’re weighing a Chapter 7 filing in Washington, DC and want to know where your specific property stands, The Belmont Firm offers free initial consultations to walk through it with you. Reach us at (202) 875-8445.