Homestead Exemptions

   Virginia Code §34-26 and §34-4 provide for commonly used exemptions in bankruptcy.

    Virginia Code §34-26 is the "poor debtor's" exemption. This law was updated in 1992. Instead of listing exempt items such as horses, oxen, cattle, bushels of wheat, corn, etc. (as it was pre-1992), the statute now sets out categories with dollar limitations: tools of trade up to $10,000.00; household furnishings up to $5,000.00; family heirlooms up to $5,000.00; motor vehicles up to $2,000.00; and wearing apparel up to $1,000.00.

    In July of 2020, the legislature expanded Virginia Code §34-4. It was expanded both in the amount of the exemption and simplifying the procedure for claiming the exemption. The Homestead Exemption now provides for an exemption for real and personal property up to $5,000 in value (or $10,000 in value if the householder is 65 years of age or older), plus an additional exemption of $500.00 for each dependent (a dependent is an individual who derives support from the householder and does not have assets sufficient to support himself).  An individual may also exempt from creditor process “real and personal property used as the principal residence of the householder or the householder’s dependents in an amount not exceeding $25,000.00 in value.”

    The 2020 changes removed the provision that stated that the Homestead Exemption was exhausted after it was claimed during a lifetime. Now the exemption shall be counted against the maximum individual exemption limit only for a period of eight years from the date of such claim of exemption. To the extent used or exhausted, after the passage of eight years from the date of the claim of an exemption, the householder is able to use any portion of that claimed Homestead Exemption again. This change is consistent with the Bankruptcy Code’s time limits on an individual’s ability to obtain a discharge after receiving a discharge in a prior case.

    The 1992 statutory charges resulted in an increase in the debtor's effective exemptions of personal property, as well as a severe decrease in effectiveness of the previous frequently used "Sheriff's levy" on personal property. The 2020 statutory changes resulted in major changes in the amount of the exemption over a lifetime and the procedure for claiming.