proceeds for damaged exempt property

Definition from Nolo’s Plain-English Law Dictionary

In bankruptcy, money received through insurance coverage, arbitration, mediation, settlement, or a lawsuit to pay for exempt property that has been damaged or destroyed. For example, if a debtor had the right to use a $30,000 homestead exemption, but his or her home was destroyed by fire, the debtor may instead exempt $30,000 of the insurance proceeds.

Definition provided by Nolo’s Plain-English Law Dictionary.