What does opting out mean?
Under 11 U.S.C. § 522(b)(2), Congress gave states the power to opt out of the federal exemption scheme. When a state opts out, debtors in that state must use state-law exemptions and cannot choose the federal exemptions listed in § 522(d).
This does not mean you have no exemptions. It means you use your state's own exemption statutes instead of the federal list. Some state exemptions are more generous than federal; some are less.
Opt-out vs. choice states
| Category | Number | What it means |
|---|---|---|
| Opt-out states (state exemptions only) | 33 | Must use state exemptions; federal § 522(d) not available |
| Choice states (federal or state) | 17 + DC | Debtor chooses whichever system is better |
List of opt-out states
The following states have opted out of federal exemptions. Debtors in these states must use state-law exemptions:
Alabama, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, Virginia, West Virginia, Wyoming.
Note: Some states on this list have enacted state exemptions that closely mirror the federal amounts. The practical impact of opting out varies significantly.
Does opting out matter?
It depends on your state. In states with generous exemptions (like Texas, Florida, or Kansas with unlimited homesteads), the opt-out is irrelevant -- state exemptions are better than federal. In states with weak exemptions (like Missouri or Alabama), the opt-out hurts debtors by denying access to the federal wildcard and other protections.
The most impactful difference is often the wildcard exemption. The federal wildcard under § 522(d)(5) can provide up to $15,425 of flexible protection. States that opt out but offer no wildcard (or a very small one) leave debtors with less protection for cash, bank accounts, and tax refunds.
Even in opt-out states, some federal protections still apply. ERISA retirement account protection, Social Security exemptions, and certain other federal protections are available regardless of state opt-out status. These come from separate federal statutes, not from § 522(d).