Bankruptcy in DC (2026): Exemptions & Means Test

The District of Columbia is one of the jurisdictions that lets bankruptcy filers choose: you can use the District's own exemptions or the federal bankruptcy exemptions, whichever protects more of your property. Bankruptcy itself is federal law, but the exemptions that decide what you keep, and the median income that decides which chapter you can use, are set locally. The District's homestead exemption for a principal residence is effectively unlimited, which makes the choice especially important for homeowners. The figures below reflect amounts in effect in 2026, and you should confirm the current numbers before relying on them.

This page is general legal information, not legal advice. It is part of our Bankruptcy by State series.

Does DC use local or federal bankruptcy exemptions?

The District of Columbia is not an opt-out jurisdiction. A debtor who files bankruptcy in DC may elect to use the District's exemptions in D.C. Code 15-501, or the federal bankruptcy exemptions in 11 U.S.C. 522(d). Under 11 U.S.C. 522(b), the federal menu stays available to a debtor whose state or district has not specifically barred it, and the District has never enacted such an opt-out. You choose one complete menu and cannot combine items from both lists.

Two threshold points sit behind the figures below. First, which jurisdiction's exemptions you may claim at all is fixed by 11 U.S.C. 522(b)(3)(A), which points to the place where you were domiciled for the 730 days before filing, or, if you moved during that window, the place where you lived for the greater part of the 180 days before that period. Second, D.C. Code 15-501 is written on its face as the exempt property of the head of a family or householder residing in the District of Columbia, or of a person who earns the major portion of his livelihood in the District while being the head of a family or householder. The section heading is likewise "Exempt property of householder." A filer who does not readily fit that description should confirm with counsel how the section applies before relying on its amounts.

The choice usually turns on home equity. The District's homestead exemption for a principal residence has no dollar cap, so homeowners with meaningful equity almost always choose the local set. Filers who rent or have little home equity sometimes prefer the federal set because of its larger general wildcard. Even a filer who uses the District exemptions can separately claim the federal nonbankruptcy exemptions for things like Social Security and tax-qualified retirement accounts. Married couples filing jointly can generally each claim a full set of whichever system they choose.

DC homestead exemption

The District of Columbia's homestead exemption is the headline protection for homeowners, and it is among the most generous anywhere. Under D.C. Code 15-501(a)(14), a debtor may exempt the aggregate interest in real property used as the residence of the debtor, or in a cooperative that owns property the debtor uses as a residence. The statute sets no dollar limit, so the homestead is effectively unlimited for a principal residence.

There is one major federal limit to know. Under 11 U.S.C. 522(p), a debtor cannot exempt more than $214,000 of interest in a homestead that was acquired during the 1,215-day period (about 40 months) before filing, even in a jurisdiction whose own exemption is unlimited. That figure is the inflation-adjusted amount in effect for cases filed on or after April 1, 2025, and it is revised every three years. Equity you have held longer than 1,215 days is not subject to this cap. A related provision, 11 U.S.C. 522(q), applies the same $214,000 ceiling in certain cases involving specified misconduct.

Homestead protection covers equity, not the full value of the home. Because the District's exemption is unlimited, most DC homeowners can protect all of their home equity in a residence held long enough to clear the 1,215-day window, but recently acquired equity and the 522(p) cap should be analyzed carefully before filing.

Vehicle, wildcard, and personal-property exemptions

Beyond the home, the District protects a range of everyday property under D.C. Code 15-501:

• Motor vehicle: up to $2,575 of equity in one vehicle under (a)(1).
• Household furnishings, goods, clothing, appliances, books, animals, crops, and musical instruments: up to $425 per item and $8,625 in aggregate under (a)(2).
• Wildcard: up to $850 of any property, plus up to $8,075 of any unused portion of the homestead exemption under (a)(3).
• Tools of the trade and business property: up to $1,625 in implements, professional books, or tools of the trade under (a)(4), which also applies to merchants.
• Wages: Section 15-501 contains no wage exemption. Wage garnishment in the District is capped separately by D.C. Code 16-572, which limits an attachment to 25% of the amount by which disposable wages for a week exceed 40 times the District minimum hourly wage.
• Non-wage earnings, insurance, annuity, and pension payments: up to $200 each month under D.C. Code 15-503 for a person who provides the principal support of a family, or up to $60 each month for a person who does not.
• Retirement accounts: tax-qualified plans are protected under the District's exemptions and under federal law regardless of which menu you choose.

The District's dollar figures in 15-501 are largely fixed in the statute, so confirm the current numbers before filing, because the Council can amend them.

The Chapter 7 means test in DC

The means test screens who can file Chapter 7. The first step compares your household's current monthly income, annualized, to the median family income for a District household of the same size. If your income is at or below the District median, you generally pass and may proceed with Chapter 7. If it is above the median, you complete the longer calculation that subtracts allowed expenses to see whether you have disposable income that should fund a Chapter 13 plan instead.

The U.S. Trustee Program publishes the median figures and updates them periodically. For cases filed on or after April 1, 2026, the District of Columbia median family income is:

Add $11,100 for each additional person beyond four. These figures apply only to cases filed on or after April 1, 2026. The U.S. Trustee Program revises the median income data roughly twice a year, so confirm the current numbers for your filing date.

Chapter 7 vs. Chapter 13 in DC

Chapter 7 is a liquidation. A trustee can sell non-exempt property to pay creditors, but because the District's exemptions protect most household property and, for a principal residence, all home equity within the federal cap, many Chapter 7 cases are "no-asset" cases where nothing is sold. Most remaining unsecured debt, such as credit cards and medical bills, is discharged in a few months.

Chapter 13 is a reorganization for filers with regular income. You keep your property and repay some or all of what you owe through a three-to-five-year plan. Chapter 13 is often chosen by homeowners who are behind on a mortgage, because the plan can spread out the missed payments and stop a foreclosure while you catch up.

In both chapters, filing triggers the automatic stay under 11 U.S.C. 362. The stay immediately halts most collection activity, including foreclosure sales, wage garnishment, repossession, and collection calls, while the case proceeds.

Where you file bankruptcy in DC

The District of Columbia is a single federal bankruptcy district. All DC bankruptcy cases are filed in the U.S. Bankruptcy Court for the District of Columbia, whose clerk's office is located at 333 Constitution Avenue NW in Washington. Before filing, federal law requires you to complete an approved credit-counseling course, and you must complete a debtor-education course before your debts are discharged.

What bankruptcy can and cannot do

Bankruptcy discharges most unsecured debts, but several categories generally survive: most student loans (absent a separate showing of undue hardship), recent income taxes, child support and alimony, and debts from fraud or willful injury. Secured debts like a car loan or mortgage continue if you want to keep the collateral and keep paying.

Because exemption amounts change, the federal homestead cap depends on when you acquired your equity, and the choice between the local and federal exemption menus and between Chapter 7 and Chapter 13 depends on your full financial picture, many people consult a licensed bankruptcy attorney before filing in the District.