Bankruptcy Exemptions in South Dakota
What property you can keep in bankruptcy in South Dakota: homestead, vehicle, wildcard and retirement exemptions, and whether you can choose the federal exemptions.
Short answer: South Dakota has opted out of the federal bankruptcy exemptions. Under state law, South Dakota residents are not entitled to the federal exemptions in 11 U.S.C. SDCL 43-31-30; SDCL 43-45-13
| State or federal exemptions | South Dakota has opted out of the federal bankruptcy exemptions. Under state law, South Dakota residents are not entitled to the federal exemptions in 11 U.S.C. § 522(d) and use the exemptions in the South Dakota Constitution and statutes instead. The same opt-out language appears in SDCL 43-45-13 (https://sdlegislature.gov/api/Statutes/43-45.html?all=true). Source: SDCL 43-31-30; SDCL 43-45-13 |
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| Homestead exemption | The homestead is absolutely exempt, with no general dollar limit. It covers one dwelling house (real property or a qualifying mobile home) and buildings appurtenant to it. Area limit: 1 acre within a town plat, or up to 160 acres in total outside a town plat (smaller limits apply to homesteads on certain mineral-claim land). If the homestead is sold, up to one hundred thousand dollars of the sale proceeds is exempt for one year after the owner receives them. For a person 70 or older (or that person's unremarried surviving spouse), the exemption is limited to one hundred seventy thousand dollars. Area limits and the definition of the homestead are in chapter 43-31: https://sdlegislature.gov/api/Statutes/43-31.html?all=true. A mobile home must be registered in South Dakota at least six months before the exemption is claimed (SDCL 43-31-2). Federal bankruptcy law can separately limit homestead exemptions in some situations. |
| Car exemption | South Dakota has no separate motor vehicle exemption. A vehicle can be protected only as part of the general personal property allowance: up to seven thousand dollars in aggregate value for the head of a family, or five thousand dollars for a debtor who is not the head of a family. Source: SDCL 43-45-2, 43-45-4 |
| Wildcard exemption | In addition to the absolute exemptions, a debtor may select any other personal property (goods, chattels, merchandise, money, or other personal property) up to seven thousand dollars in aggregate value if the head of a family, or five thousand dollars if not the head of a family. This allowance applies to personal property only, not real estate. Source: SDCL 43-45-4 |
| Retirement accounts | A person may select and designate a total of one million dollars ($1,000,000), plus the income and distributions from it, in employee benefit plans as exempt from execution, attachment, garnishment, seizure, or other legal process. Covered plans include ERISA plans and plans described in Internal Revenue Code sections 401, 403(a), 403(b), 408 (IRAs), 408A (Roth IRAs), 409, 414, 457, and 501(a). The exemption does not block collection by the State of South Dakota and its political subdivisions, or payments under a qualified domestic relations order. SDCL 43-45-18 directs a South Dakota court that finds the exemption excessive to set a permissible amount under the state constitution. Source: SDCL 43-45-16, 43-45-17 |
| Wages | In a bankruptcy case, a debtor's claimed exemptions may include earned but unpaid earnings, whether or not they have been garnished, but only within the general personal property allowance of SDCL 43-45-4 (seven thousand dollars for a head of a family, five thousand dollars otherwise) and subject to federal preference rules (11 U.S.C. § 547). Outside bankruptcy, garnishment of earnings is governed by SDCL 21-18-51 to 21-18-53. Source: SDCL 43-45-14 |
More South Dakota bankruptcy
FAQ
Can you use the federal bankruptcy exemptions in South Dakota?
South Dakota has opted out of the federal bankruptcy exemptions. Under state law, South Dakota residents are not entitled to the federal exemptions in 11 U.S.C. § 522(d) and use the exemptions in the South Dakota Constitution and statutes instead.
How much home equity is protected in bankruptcy in South Dakota?
The homestead is absolutely exempt, with no general dollar limit. It covers one dwelling house (real property or a qualifying mobile home) and buildings appurtenant to it. Area limit: 1 acre within a town plat, or up to 160 acres in total outside a town plat (smaller limits apply to homesteads on certain mineral-claim land). If the homestead is sold, up to one hundred thousand dollars of the sale proceeds is exempt for one year after the owner receives them. For a person 70 or older (or that person's unremarried surviving spouse), the exemption is limited to one hundred seventy thousand dollars.
Can I keep my car in bankruptcy in South Dakota?
South Dakota has no separate motor vehicle exemption. A vehicle can be protected only as part of the general personal property allowance: up to seven thousand dollars in aggregate value for the head of a family, or five thousand dollars for a debtor who is not the head of a family.
Does South Dakota have a wildcard exemption?
In addition to the absolute exemptions, a debtor may select any other personal property (goods, chattels, merchandise, money, or other personal property) up to seven thousand dollars in aggregate value if the head of a family, or five thousand dollars if not the head of a family. This allowance applies to personal property only, not real estate.
Are retirement accounts protected in bankruptcy in South Dakota?
A person may select and designate a total of one million dollars ($1,000,000), plus the income and distributions from it, in employee benefit plans as exempt from execution, attachment, garnishment, seizure, or other legal process. Covered plans include ERISA plans and plans described in Internal Revenue Code sections 401, 403(a), 403(b), 408 (IRAs), 408A (Roth IRAs), 409, 414, 457, and 501(a). The exemption does not block collection by the State of South Dakota and its political subdivisions, or payments under a qualified domestic relations order.
Are wages protected in bankruptcy in South Dakota?
In a bankruptcy case, a debtor's claimed exemptions may include earned but unpaid earnings, whether or not they have been garnished, but only within the general personal property allowance of SDCL 43-45-4 (seven thousand dollars for a head of a family, five thousand dollars otherwise) and subject to federal preference rules (11 U.S.C. § 547). Outside bankruptcy, garnishment of earnings is governed by SDCL 21-18-51 to 21-18-53.
General legal information, not legal advice. Laws change and local rules can differ; check the linked official source or talk to a lawyer about your situation.