The one-sentence version
For every item on Schedule A/B you want to protect, Schedule C is where you point to the specific federal or state statute that lets you keep it - and the dollar amount that statute protects.
Federal vs. state exemptions - the first decision
U.S. bankruptcy law provides a set of federal exemptions in 11 U.S.C. Section 522(d). Each state also has its own exemption list. Depending on the state:
- About 19 states let you choose between federal and state exemptions. You pick the system that protects more of your property, then use that system for everything - no mixing.
- About 31 states "opt out" and require you to use state exemptions only.
Whichever set applies, you list each protected item, cite the exact statute, and write the dollar amount of the exemption claimed.
What's on the form
One long table with these columns:
- Brief description of the property - copied from Schedule A/B
- Current value of the portion you own
- Amount of the exemption you claim
- Specific laws that allow exemption - the statute citation
You also check a box at the top declaring which system you're using.
The "100% of fair market value" option
For certain unlimited exemptions (most retirement accounts, sometimes the homestead in unlimited-homestead states like Florida or Texas), you can claim "100% of fair market value, up to any applicable statutory limit." That's the safest way to claim a fully-protected asset.
Common exemption categories
Most exemption systems cover:
- Homestead - equity in your primary residence (federal: $27,900 in 2025; states range from $0 to unlimited)
- Motor vehicle - federal: $4,450; states vary
- Household goods, furnishings, clothing - usually a per-item cap and a total cap
- Jewelry - typically modest ($1,500-$2,500)
- Tools of the trade - work equipment
- Retirement accounts - 401(k), IRA, pension; almost always 100% protected, though IRAs sometimes capped (federal cap ~$1.5M)
- Wildcard - applies to any asset; federal is ~$1,475 plus up to $13,950 of unused homestead
- Public benefits - Social Security, unemployment, disability, veterans' benefits
- Personal injury claims - often partially exempt
- Tools of life - prescribed health aids, a wedding ring, etc.
Good to know: The federal exemption amounts are adjusted for inflation every three years (April 1, 2025 was the most recent adjustment). State amounts adjust on their own schedules. Always check current numbers before filing - the dollar caps in textbooks go out of date fast.
The "domicile rule" - which state's exemptions apply
You don't necessarily get to use your current state's exemptions. The rule (11 U.S.C. Section 522(b)(3)):
- If you've lived in your current state for at least 730 days (2 years) before filing, use that state's exemptions.
- If you've lived there less than 730 days, use the state where you were "domiciled" for the greater part of the 180 days before that 730-day window.
- If that earlier state's exemptions wouldn't apply to a non-resident, you fall back to federal exemptions.
People who moved recently from a generous state (like Texas or Florida) to a stingier state (or vice versa) sometimes wait to file until the 730-day clock runs.
Watch out: Picking the wrong system - or undervaluing an asset to fit inside an exemption cap - is the fastest way to lose property. The trustee can object to a claimed exemption; if the objection succeeds, the asset becomes available for liquidation. Once a 30-day objection window closes after the 341 meeting, exemptions are generally locked in (subject to limited exceptions).
Common mistakes
- Citing a wrong statute. The trustee won't fix it for you; they'll object.
- Mixing federal and state. Pick one system and stick with it for everything.
- Forgetting the wildcard. It's the most flexible exemption - use it for cash, jewelry, or whatever otherwise can't be covered.
- Listing the wrong dollar amount. If the federal motor vehicle cap is $4,450 and your car is worth $5,000, you can only exempt $4,450 - the trustee may want the remaining $550 (after sale costs and minor-equity rules).
- Not amending after the 341 meeting when the trustee asks for a different cite or a corrected value.
Related forms
Schedule C is meaningless without Schedule A/B - they work as a pair. See also When DIY is a bad idea for the exemption-related complexity flags. Full forms index here.