You’re considering bankruptcy and have been researching online. You keep reading about federal bankruptcy exemptions that could protect thousands of dollars more of your property than what Missouri allows. There’s just one problem: you can’t use those federal exemptions at all if you file in Missouri.
This catches many people off guard. Missouri is what’s called an “opt-out” state, which means state law requires you to use Missouri’s exemptions instead of the federal ones listed in 11 U.S.C. § 522(d). While it might feel limiting at first, Missouri’s exemptions still protect the property most people need to maintain their households and keep working. Once you know what’s protected and how to use these exemptions properly, you can move forward with your bankruptcy case without losing the things that matter most.
What does Missouri’s opt-out law actually mean?
Missouri law states in Mo. Rev. Stat. § 513.427 that residents filing bankruptcy must use Missouri state exemptions and cannot claim the federal exemptions listed under 11 U.S.C. § 522(d). Missouri lawmakers chose to create their own set of protections rather than allowing residents to pick between state and federal rules.
When Congress passed the Bankruptcy Code in 1978, it gave individual states the choice to opt out of the federal exemption system. Missouri exercised this right and passed legislation requiring bankruptcy filers to use Missouri exemptions. The idea was simple: state legislators wanted local control over what property residents could keep in bankruptcy rather than having a one-size-fits-all federal system.
Around 35 states have made similar decisions to opt out of federal exemptions. The remaining states give filers a choice between federal and state exemptions, letting them pick whichever set protects more assets.
For Missouri residents, this means you’ll be working exclusively with the exemptions in Missouri Revised Statutes Chapter 513, particularly § 513.430 and § 513.440.
Can I use any federal exemptions at all?
Yes, but only federal “nonbankruptcy” exemptions. This distinction matters more than you might think.
Federal nonbankruptcy exemptions are protections found in other parts of federal law outside the bankruptcy code itself. These include Social Security benefits, veterans’ benefits, and certain retirement accounts protected under 11 U.S.C. § 522(b)(3)(C). You can combine these federal nonbankruptcy exemptions with Missouri’s state exemptions.
The most important federal nonbankruptcy exemptions include:
- Retirement accounts: 401(k)s, 403(b)s, profit-sharing plans, SEP and SIMPLE IRAs, and traditional and Roth IRAs up to $1,711,975 per person for cases filed between April 1, 2025, and March 31, 2028
- Social Security benefits: Fully protected from creditors
- Veterans’ benefits: Completely exempt
- Railroad retirement benefits: Fully protected
- Civil service retirement: Protected under federal law
These federal nonbankruptcy exemptions work alongside Missouri’s state exemptions, giving you layers of protection for specific types of property and benefits.
What property can I protect using Missouri’s state exemptions?
Missouri’s exemption laws are found primarily in Mo. Rev. Stat. § 513.430, which covers a wide range of property. Here’s what you need to know about the major categories.
Your Home (Homestead Exemption)
Missouri’s homestead exemption under Mo. Rev. Stat. §§ 513.430.1(6) and 513.475 protects up to $15,000 in equity for real property or $5,000 for a mobile home. This amount applies to your equity, not the total value of your home.
For example, if your house is worth $200,000 and you owe $188,000 on your mortgage, you have $12,000 in equity. That would be fully protected under Missouri’s homestead exemption in a Chapter 7 bankruptcy.
One important limitation: married couples filing jointly cannot double this exemption. Whether one spouse or both spouses file, the maximum homestead exemption remains $15,000.
Your Vehicle
Missouri law allows you to protect up to $3,000 of equity in motor vehicles under Mo. Rev. Stat. § 513.430.1(5). If you’re married and filing jointly, you can each protect $3,000 of equity in your own vehicles, or combine both exemptions to protect $6,000 of equity in a single jointly-owned vehicle.
Let’s say you own a car worth $8,000 and you owe $6,000 on your auto loan. Your equity is $2,000, which would be completely protected by Missouri’s motor vehicle exemption.
Household Goods and Personal Property
You can protect up to $3,000 in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, and musical instruments under Mo. Rev. Stat. § 513.430.1(1). This exemption covers the everyday items you need to maintain your household. Married couples filing jointly can double this exemption to $6,000 total.
Jewelry and Wedding Rings
Missouri treats wedding rings differently from other jewelry. You can exempt up to $1,500 in value for a wedding ring and up to $500 for other jewelry under Mo. Rev. Stat. § 513.430.1(2). Married couples can each claim these exemptions for their own rings and jewelry.
Tools of Your Trade
If you’re self-employed or need equipment for work, Missouri law protects up to $3,000 worth of implements, professional books, and tools of the trade under Mo. Rev. Stat. § 513.430.1(4). This might include a mechanic’s tools, a carpenter’s equipment, a musician’s instruments used for paid performances, or a photographer’s cameras and gear.
The Wildcard Exemption
Missouri provides a wildcard exemption of $600 under Mo. Rev. Stat. § 513.430.1(3) that you can apply to any property of your choosing. This flexibility can be valuable for protecting items that don’t fit into other exemption categories.
Head of Household Exemption
If you’re the head of your household, you get an additional $1,250 exemption plus another $350 for each dependent child under Mo. Rev. Stat. § 513.440. This exemption can be applied to any property, giving you more room to protect cash, bank accounts, or other assets.
For instance, if you’re the head of household with two children, you’d have an extra $1,950 ($1,250 + $350 + $350) to protect additional property beyond your other exemptions.
Wages and Earnings
Missouri protects a significant portion of your wages from garnishment and bankruptcy proceedings. The law exempts the greater of 75% of your disposable weekly earnings or 30 times the federal minimum hourly wage. This protection helps you continue supporting yourself and your family.
Life Insurance and Retirement Benefits
Missouri provides substantial protection for various forms of insurance and retirement benefits:
- Life insurance cash value is exempt up to $150,000 in bankruptcy, but policies purchased within one year before filing aren’t exempt, under Mo. Rev. Stat. § 513.430.1(8)
- Unmatured life insurance policies
- Disability or illness benefits under Mo. Rev. Stat. § 513.430.1(10)(c)
For retirement accounts, Missouri law works together with federal protections. ERISA-qualified benefits necessary for support are protected under Mo. Rev. Stat. § 513.430.1(10)(e), along with specific protections for firefighters, police officers, teachers, and other public employees.
Public Benefits
Missouri fully exempts several types of public benefits from bankruptcy proceedings:
- Social Security benefits
- Unemployment compensation
- Workers’ compensation
- Public assistance benefits
- Alimony and child support payments up to $750 per month under Mo. Rev. Stat. § 513.430.1(10)(d)
Firearms and Other Protected Property
Missouri law also protects firearms, firearm accessories, and ammunition up to $1,500 in value under Mo. Rev. Stat. § 513.430.1(12). Other protected property includes burial grounds (up to one acre or $100 in value under Mo. Rev. Stat. § 214.190), professionally prescribed health aids under Mo. Rev. Stat. § 513.430.1(9), and wrongful death recoveries to the extent reasonably necessary for support.
How long do I need to live in Missouri to use these exemptions?
Federal bankruptcy law requires you to live in Missouri for at least 730 days (two years) to use Missouri’s exemptions, as specified in 11 U.S.C. § 522(b)(3)(A). You can file for bankruptcy in Missouri after just 180 days of residency, but if you haven’t been here for the full 730 days, you must use exemptions from the state where you lived for the majority of the 180 days immediately before the two-year period. If you lived in multiple states during the relevant time, you might use another state’s exemptions even though you’re filing in Missouri, and exemption amounts vary significantly between states.
How do exemptions work differently in Chapter 7 versus Chapter 13 bankruptcy?
The exemptions themselves don’t change based on which chapter you file. The same dollar amounts and property categories apply whether you file Chapter 7 or Chapter 13. However, the consequences of having nonexempt property vary significantly between the two chapters.
Chapter 7 Bankruptcy
In Chapter 7, nonexempt property is sold and the proceeds are distributed to creditors by the bankruptcy trustee. This is why maximizing your exemptions is so important in a Chapter 7 case.
Let’s use a vehicle example. Say you own a car worth $10,000 outright with no loan. Missouri’s motor vehicle exemption only covers $3,000. In Chapter 7, the trustee could sell your car, pay you $3,000 for your exemption, and distribute the remaining $7,000 (minus selling costs) to your creditors.
On the other hand, if your car is worth $2,500 with no loan, the entire value is protected by the exemption and the trustee can’t touch it.
Chapter 13 Bankruptcy
Chapter 13 works differently. You keep all your property, including nonexempt assets. However, the value of your nonexempt property affects how much you must pay to unsecured creditors through your repayment plan.
Using the same car example, if you have a $10,000 car with $7,000 in nonexempt equity, you’d need to pay your unsecured creditors at least $7,000 through your Chapter 13 plan (spread over three to five years). This is called the “best interests of creditors” test, which requires that unsecured creditors receive at least as much in Chapter 13 as they would have received if you’d filed Chapter 7 instead.
Many people choose Chapter 13 specifically because they have valuable nonexempt property they want to keep, and they’re willing to make payments over time rather than lose those assets in Chapter 7.
What about property owned with my spouse as tenancy by the entirety?
Missouri recognizes tenancy by the entirety, a special ownership form available only to married couples who acquired property together at the same time, by the same deed, with complete shared possession. When a married couple owns property as tenants by the entirety and only one spouse files bankruptcy, the entire property value may be exempt if the couple has no joint debt, meaning the non-filing spouse’s creditors generally cannot reach it.
However, medical bills are considered joint debt in Missouri, which often limits this protection since most couples have some medical debt. Property that can be held as tenancy by the entirety includes real estate and bank accounts, so if you and your spouse own property together and are considering bankruptcy, discussing this option with an attorney is worthwhile—having only one spouse file might protect more assets than a joint filing.
Can married couples double all exemptions?
Missouri allows married couples filing jointly to double most exemptions, but there are important exceptions. The homestead exemption cannot be doubled—whether one spouse or both file, the maximum remains $15,000 for real property and $5,000 for a mobile home.
For most other exemptions, each spouse can claim the full amount if they both own the property or each owns separate property. For example, each spouse can exempt $3,000 in vehicle equity ($6,000 total for a jointly owned vehicle), $3,000 in household goods ($6,000 total), and $600 wildcard exemption ($1,200 total). When planning bankruptcy, consider how you own property—joint ownership may benefit from joint filing to maximize exemptions, while separate property ownership might still warrant joint filing to claim exemptions on both sides.
What happens if I can’t protect all my property with exemptions?
If you have nonexempt property, you have several options depending on which chapter you file.
In Chapter 7, you could:
- Sell the nonexempt property before filing and use the proceeds for necessary living expenses
- Use your wildcard exemption or head of household exemption to cover some of the nonexempt value
- Convert nonexempt property into exempt property (for instance, using cash to pay down your mortgage)
- Pay the trustee the nonexempt value to keep the property
- Let the trustee sell the property and receive your exemption amount from the proceeds
- File Chapter 13 instead to keep the property while paying its value over time
In Chapter 13, you’ll:
- Keep all your property
- Pay unsecured creditors at least the value of your nonexempt property through your plan
- Make monthly payments over three to five years
The key is planning ahead. Meeting with a bankruptcy attorney well before you file gives you time to position your assets properly and make informed decisions about which chapter to file and how to maximize your exemptions.
How do exemptions protect my bank account and tax refunds?
Bank accounts and tax refunds can be tricky because they’re often not specifically listed as exempt property. Here’s what you need to know.
If your bank account contains exempt funds, those funds generally remain exempt. For example, if your account holds only Social Security benefits deposited within the last two months, those funds are fully protected as Social Security is a federal nonbankruptcy exemption.
For general bank accounts containing wages and savings, you can use your wildcard exemption ($600) or head of household exemption ($1,250 plus $350 per child) to protect the balance.
Tax refunds require special attention. The timing of your bankruptcy filing matters significantly when you’re expecting a tax refund. If you file bankruptcy in January and you’re due a $3,000 tax refund for the previous year, that refund becomes property of the bankruptcy estate unless you can exempt it using your available exemptions. Planning your filing date around tax season can help you maximize what you keep.
Key Takeaways
- Missouri is an opt-out state under Mo. Rev. Stat. § 513.427, so you must use Missouri exemptions rather than federal bankruptcy exemptions
- You can still use federal nonbankruptcy exemptions for Social Security, veterans’ benefits, and tax-exempt retirement accounts
- Missouri’s major exemptions include $15,000 for home equity, $3,000 for a vehicle, $3,000 for household goods, and various protections for insurance, retirement, and public benefits
- You need to live in Missouri for 730 days before filing to use Missouri’s exemptions
- Married couples can double most exemptions, but not the homestead exemption
- Exemptions work the same in both Chapter 7 and Chapter 13, but the consequences of nonexempt property differ significantly
- Property owned as tenancy by the entirety can provide additional protection when only one spouse files
Frequently Asked Questions
Can I shop around for better exemptions by filing in a different state?
No. You must use the exemptions of the state where you’ve lived for the 730 days before filing. Even if you file your bankruptcy case in Missouri, if you haven’t lived here long enough, you’ll use your previous state’s exemptions. The residency requirement prevents people from moving just to access better exemptions.
What if the property I own doesn’t fit into any exemption category?
You can use Missouri’s wildcard exemption ($600) or head of household exemption (if applicable) to protect property that doesn’t fit other categories. If the property’s value exceeds what you can exempt, you’ll need to decide whether to file Chapter 7 and risk losing it, file Chapter 13 to keep it, or convert it to exempt property before filing.
Do I lose my federal exemptions because Missouri opted out?
You lose access to the federal bankruptcy exemptions in 11 U.S.C. § 522(d), but you can still use federal nonbankruptcy exemptions found in other parts of federal law. These protect things like Social Security benefits, federal retirement accounts, and veterans’ benefits.
How does the trustee value my property?
The trustee typically uses fair market value, which is what you could sell the property for in its current condition. This is often less than retail value or replacement value. For vehicles, the trustee might reference NADA or Kelley Blue Book values. For household goods, values are usually low because used furniture and appliances don’t sell for much.
Can I increase my exemptions by paying down debt before bankruptcy?
Sometimes. You can use nonexempt cash to pay down a mortgage or car loan, converting nonexempt property (cash) into exempt property (home or vehicle equity). However, you need to be careful about the timing and amount. Large or unusual payments shortly before bankruptcy can be scrutinized. Always consult with a bankruptcy attorney before making significant financial moves in the months leading up to bankruptcy.
What happens if I forget to claim an exemption?
Your bankruptcy schedules include a section where you list all your property and claim your exemptions. If you forget to claim an exemption, you might be able to amend your schedules to add it, but this depends on timing and whether the trustee has already taken action. Getting your exemptions right the first time prevents problems down the road.
Are gifts and inheritances exempt in Missouri?
Generally no, not automatically. If you receive a gift or inheritance before filing bankruptcy, it becomes part of your bankruptcy estate unless you can protect it with an exemption like the wildcard exemption. If you receive an inheritance within 180 days after filing bankruptcy, it also becomes property of the estate. Timing matters significantly with gifts and inheritances.
Can I buy property and claim it as exempt right before filing?
You can convert nonexempt property into exempt property before filing, and this is legal. However, you need to act in good faith and follow certain rules. For example, you can’t defraud creditors by hiding assets or making sham transactions. Courts look at the timing, your intent, and whether you acted reasonably. Converting $2,000 in cash into a used car you actually need is very different from buying luxury items to shield them from creditors.
Get Help with Missouri Bankruptcy Exemptions
Filing bankruptcy involves complex rules, and getting your exemptions wrong can cost you property you could have protected. At Roach Bankruptcy Center, LLC, we help Kansas City area residents understand what they can keep in bankruptcy and develop strategies to maximize their exemptions.
During your free initial consultation, we will review your situation, calculate your available exemptions, and explain your options. You’ll leave with a clear picture of how bankruptcy could affect your property and which chapter may be best for your goals. Whether you are concerned about keeping your home, car, or other assets, we can help you protect what matters most and move toward a fresh financial start.
