Filing Chapter 7 Bankruptcy in Vermont (2026)
Reviewed by DocDraft Legal Team · Vermont · Last updated August 18, 2026
Chapter 7 bankruptcy is federal law, but the property you keep depends on Vermont. Vermont is a choice state: you may elect either the federal exemptions under 11 U.S.C. 522(d) or Vermont's own exemptions, whichever protects more of your property, but you cannot mix the two lists. This page explains Vermont's homestead exemption under 27 V.S.A. 101, the vehicle, household-goods, and wildcard figures under 12 V.S.A. 2740, the means-test median income, and the single U.S. Bankruptcy Court for the District of Vermont where Vermonters file. Chapter 7 discharges most unsecured debt but not most student loans, recent taxes, child support, or alimony.
Does Vermont use state or federal bankruptcy exemptions?
Vermont is a choice state. Under 12 V.S.A. 2740 and 27 V.S.A. 101 you may elect Vermont's exemptions, or you may instead choose the federal 11 U.S.C. 522(d) list, whichever protects more of your property. You pick one system in full for the whole case; you cannot combine Vermont and federal exemptions.
Can I keep my house if I file Chapter 7 in Vermont?
Often yes. Under 27 V.S.A. 101, Vermont's homestead exemption protects up to $125,000 of equity in your home, including out-buildings and the land. If your home equity fits within that amount, Chapter 7 generally lets you keep the house. A married couple filing together cannot double the Vermont homestead figure.
Can I keep my car if I file Chapter 7 in Vermont?
Usually yes if your equity is modest. Under 12 V.S.A. 2740(1) Vermont exempts $2,500 of equity in one motor vehicle. If your car equity is at or below that figure the vehicle is protected, and Vermont's wildcard under 12 V.S.A. 2740(7) can cover some equity above it. The federal 522(d) list is an alternative.
What is the income limit to file Chapter 7 in Vermont?
For cases filed on or after July 15, 2026, the U.S. Trustee median income figures for Vermont are $72,461 for one earner, $96,963 for two, $114,075 for three, and $137,583 for four, adding $11,100 per additional person. At or below your household figure, you pass the first part of the means test.
Vermont's Federal-or-State Choice, the 27 V.S.A. 101 Homestead, and the District of Vermont Court
Vermont is one of the roughly sixteen choice states: it did not force debtors onto its own exemption set, so a Vermont filer may elect either the federal 11 U.S.C. 522(d) exemptions or Vermont's state exemptions, whichever shields more property. You must pick one list in full and cannot blend the two. Vermont's headline protection is the homestead under 27 V.S.A. 101, which exempts up to $125,000 of equity in a home, mobile home, or the land, including rents, profits, and out-buildings; a married couple filing jointly cannot double it. Vermont's personal-property exemptions live in 12 V.S.A. 2740: a $2,500 motor-vehicle exemption under 2740(1), $2,500 in aggregate household goods and furnishings under 2740(5), and tools of the trade to $5,000 under 2740(2). Vermont also offers a flexible wildcard under 12 V.S.A. 2740(7): a $400 catch-all plus up to $7,000 of unused motor-vehicle, tools-of-trade, and household-goods exemption amounts applied to any property. Vermont has a single federal judicial district, so every Vermonter files in the U.S. Bankruptcy Court for the District of Vermont.
Relevant Laws
Vermont Homestead Exemption (27 V.S.A. 101)
Sets Vermont's homestead exemption at up to $125,000 of equity in a home or mobile home, including the land, rents, profits, and out-buildings. This is the exemption that lets many Vermont homeowners keep their house in Chapter 7. A married couple filing jointly cannot double it.
Vermont Exemption Choice and the Federal Alternative (12 V.S.A. 2740; 11 U.S.C. 522(b))
Vermont did not opt out of the federal exemptions, so under 11 U.S.C. 522(b) and 12 V.S.A. 2740 a Vermont debtor may elect either the Vermont exemptions or the federal 522(d) list, whichever protects more property. You choose one set in full and cannot combine the two.
Vermont Vehicle, Household-Goods, and Wildcard Exemptions (12 V.S.A. 2740)
Exempts $2,500 of equity in one motor vehicle under 2740(1), $2,500 in aggregate household goods under 2740(5), and tools of the trade to $5,000 under 2740(2), plus a wildcard under 2740(7) of $400 and up to $7,000 of unused amounts from those categories.
Federal Bankruptcy Code Exemptions and Means Test (11 U.S.C. 522, 707)
The federal law behind Chapter 7. Section 522(b) lets a debtor in a choice state like Vermont elect the federal 522(d) exemptions instead of the state set, and section 707(b) sets the means test measured against state median income.
Regional Variances
Vermont Chapter 7 Exemption Table
Homestead
27 V.S.A. 101: up to $125,000 of equity in a home or mobile home, including the land, rents, profits, and out-buildings. A married couple filing jointly cannot double this figure. As a choice state, Vermont also lets you use the smaller federal 522(d)(1) homestead instead if that helps.
Motor vehicle
12 V.S.A. 2740(1): $2,500 of equity in one motor vehicle. Equity above the figure may be reachable by the trustee unless covered by the wildcard. The federal 522(d)(2) vehicle exemption is the alternative if you elect the federal list.
Wildcard
12 V.S.A. 2740(7): $400 in any property, plus up to $7,000 of unused motor-vehicle, tools-of-trade, and household-goods exemption amounts applied to any property. This portable flexibility is a leading reason low-equity Vermont filers choose the state list.
Personal property
12 V.S.A. 2740(5): $2,500 in aggregate household goods, furnishings, clothing, books, crops, animals, and musical instruments. Tools of the trade are exempt to $5,000 under 12 V.S.A. 2740(2). Other subsections cover specific items such as jewelry, a wedding ring, and growing crops.
Wages
12 V.S.A. 3170: the greater of 75 percent of weekly disposable earnings or 40 times the federal minimum wage is exempt from garnishment, mirroring the federal wage-garnishment cap. Unpaid exempt earnings carry into the bankruptcy estate as protected property.
Retirement and tools
12 V.S.A. 2740(16): retirement plans, pensions, and similar accounts are exempt as provided by statute, and ERISA-qualified plans are separately excluded from the estate under federal law. Tools of the trade are exempt to $5,000 under 12 V.S.A. 2740(2).
Suggested Compliance Checklist
Confirm the current Vermont means-test median income
Before you file days after startingCheck your household size against the U.S. Trustee Vermont median income figures in effect on your filing date, since these update periodically. For cases filed on or after July 15, 2026 the figures are $72,461 for one, $96,963 for two, $114,075 for three, and $137,583 for four, adding $11,100 per additional person.
Complete the pre-filing credit counseling course
Within 180 days before filing days after startingTake an approved credit counseling course from a provider authorized for the District of Vermont and keep the certificate. You must file it with your petition. Skipping this can get your case dismissed before your debts are addressed.
Choose the Vermont or federal exemption set and value your assets
Before preparing your schedules days after startingCompare Vermont's exemptions, including the 27 V.S.A. 101 homestead and the 12 V.S.A. 2740 wildcard, against the federal 11 U.S.C. 522(d) list, and elect one in full. Value your home, vehicle, and personal property so you can match assets to exemptions. You cannot combine the two sets.
Prepare and file your petition and schedules
Filing day days after startingFile your petition, schedules, and exemption claims in the U.S. Bankruptcy Court for the District of Vermont, the single court covering the state. Filing triggers the automatic stay that pauses collection and garnishment while your case proceeds.
Attend the 341 meeting and finish the debtor education course
Before discharge days after startingAttend the 341 meeting of creditors and answer the trustee's questions under oath, then complete the required post-filing financial management course and file the certificate. Both are required before the court will grant your discharge. An attorney can help with contested exemptions.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Confirm the current Vermont means-test median income | Check your household size against the U.S. Trustee Vermont median income figures in effect on your filing date, since these update periodically. For cases filed on or after July 15, 2026 the figures are $72,461 for one, $96,963 for two, $114,075 for three, and $137,583 for four, adding $11,100 per additional person. | - | Before you file |
| Complete the pre-filing credit counseling course | Take an approved credit counseling course from a provider authorized for the District of Vermont and keep the certificate. You must file it with your petition. Skipping this can get your case dismissed before your debts are addressed. | - | Within 180 days before filing |
| Choose the Vermont or federal exemption set and value your assets | Compare Vermont's exemptions, including the 27 V.S.A. 101 homestead and the 12 V.S.A. 2740 wildcard, against the federal 11 U.S.C. 522(d) list, and elect one in full. Value your home, vehicle, and personal property so you can match assets to exemptions. You cannot combine the two sets. | - | Before preparing your schedules |
| Prepare and file your petition and schedules | File your petition, schedules, and exemption claims in the U.S. Bankruptcy Court for the District of Vermont, the single court covering the state. Filing triggers the automatic stay that pauses collection and garnishment while your case proceeds. | - | Filing day |
| Attend the 341 meeting and finish the debtor education course | Attend the 341 meeting of creditors and answer the trustee's questions under oath, then complete the required post-filing financial management course and file the certificate. Both are required before the court will grant your discharge. An attorney can help with contested exemptions. | - | Before discharge |
Frequently Asked Questions
Under 27 V.S.A. 101, Vermont's homestead exemption protects up to $125,000 of equity in your home, whether a house or mobile home, including the land, rents, profits, and out-buildings. If your equity fits within that amount, Chapter 7 generally lets you keep the property. A married couple filing jointly cannot double the Vermont homestead.
Under 12 V.S.A. 2740(7), Vermont's wildcard lets you protect $400 in any property, plus up to $7,000 of unused motor-vehicle, tools-of-trade, and household-goods exemption amounts applied to any property you choose. This flexibility is one reason many low-equity Vermont filers prefer the state list over the federal 522(d) set.
No. Chapter 7 discharges most unsecured debt like credit cards and medical bills, but it does not erase most student loans, recent income taxes, child support, or alimony, and it will not discharge debts from fraud. Secured debts like a car loan remain unless you surrender the collateral or reaffirm the loan.
You file in the U.S. Bankruptcy Court for the District of Vermont. Vermont is a single federal judicial district, so every Vermont filer uses the same court regardless of county. You file where you have lived for most of the prior 180 days, which for Vermont residents is this one district.
Yes, to a degree. Under 12 V.S.A. 3170, Vermont exempts the greater of 75 percent of your weekly disposable earnings or 40 times the federal minimum wage from garnishment, and unpaid exempt earnings carry into bankruptcy. Retirement accounts are separately protected under 12 V.S.A. 2740(16), and ERISA-qualified plans sit outside the estate under federal law.
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