Bankruptcy exemptions protect the equity in your property from creditors and the bankruptcy court—preventing the equity from being used to pay your creditors. Equity is the value of property after you subtract the amount of any liens against the property from its fair market value.

The equity in your home is one such asset in bankruptcy. And bankruptcy exemptions—including the homestead exemption—allow you to protect the property you will need to maintain a home and employment after bankruptcy.

Bankruptcy exemption amounts vary by state, so the amount you will be able to protect will depend on where you live and the type of bankruptcy you file (Chapter 7 or Chapter 13).

In New Hampshire, bankruptcy exemptions allow individuals to protect certain assets when filing for bankruptcy, ensuring they are not left destitute. The homestead exemption is particularly important as it helps to safeguard the equity in one's home. As of the knowledge cutoff in 2023, New Hampshire allows residents to exempt up to $120,000 of equity in their primary residence under the homestead exemption. This means that if the equity in the home does not exceed this amount, it cannot be used to pay creditors in a bankruptcy case. The exemption amount applies to the debtor's interest in the property and may cover a house, mobile home, or land. It's important to note that exemption amounts can be subject to change and may differ if filing jointly as a married couple. Additionally, New Hampshire allows debtors to choose between state-specific exemptions and federal bankruptcy exemptions, providing some flexibility. The type of bankruptcy filed, Chapter 7 or Chapter 13, can also affect how exemptions are applied and what property can be retained. It is advisable to consult with an attorney to understand the full scope of exemptions available and how they apply to an individual's situation.