An immunity, or exception, from the force of law. In the context of debtor-creditor law, “exemptions” refer to specific forms of a debtor’s property that are not subject to execution by creditors. The concept is similar in bankruptcy, where “exempt” property is reserved for the benefit of an individual debtor (but not for the benefit of debtors who are entities), is not subject to administration by a trustee, and is not subject to liquidation or administration for the benefit of creditors. Exempt property is considered reserved for an individual debtor, no matter how desperate his financial plight, so that he can move forward following his discharge. Just how much should be reserved, however, is a matter of varying public policy, as homestead exemption laws in Florida, Texas and Kansas (which are highly generous to debtors) and in states like Missouri (which could be described as next to non-existent) can attest.
Bankruptcy Code § 522.