Massachusetts Exemptions in Bankruptcy Or, What Can We Keep?

What is exempt in bankruptcy? Clients ask us all the time “what can we keep”? Or, isn’t the bank account that’s really my mother’s exempt? This page is an attempt to give our Massachusetts bankruptcy clients a comprehensive overview of what’s exempt

Debtors in bankruptcy have two options: taking the Massachusetts exemptions or taking the federal exemptions. The Massachusetts exemptions were updated on April 7, 2011 to be more generous.

This page includes the Massachusetts bankruptcy exemptions. (For a review of the federal exemptions, see our Federal Exemptions in Bankruptcy page) Some of the Massachusetts exemptions are a throwback to the old days, and some are right up to date.

Massachusetts Exemptions

Homestead. This is the key Massachusetts’s exemption and the main reason that most folks who elect the Massachusetts exemption do so. The Massachusetts Homestead exemption is $125,000 as a matter of right, or, $500,000 if you file the Homestead with the appropriate Registry of Deeds. Seniors may be eligible for up to $1,000,000 in Homestead Exemptions. See Massachusetts General Laws (MGL), Chapters 188 and 235.

Another use for the Massachusetts exemptions is to exempt pension and retirement benefits, however, the restrictions are narrower than the federal exemptions. See MGL Chapters 32 section 19, 168 sections 41 and 44, 170 section 35, Chapter 171 section 84 and 246 section 28.

One motor vehicle with a value up to $7,500 is exempt and, if disabled and over 60, up to $15,000. See MGL Chapter 235, Section 34.

Personal property, as follows, is exempt: two cows, 12 sheep, 2 swine, 4 tons of hay, one heating unit, clothing and beds, $15,000 in household furniture, $1,2225 in jewelry, a “heating unit”, $500 in books, $600 in provisions, military uniforms, one pew, and a sewing machine. See MGL Chapter 235, section 34 and Chapter 246, section 28.

Bank, credit union or Trust Company account up to a value of $2,500. See MGL Chapter 246 section, 28A.

Cemetery and burial property: burial plots are exempt. See MGL Chapter 235, Chapter 34.

Eminent Domain moving expenses: if your home is taken by your town or city, your moving expenses are exempt. See MGL Chapter 79, Section 6A.

Fraternal benefit society benefits are exempt from bankruptcy. See MGL Chapter 176, Section 22.

Disability insurance benefits, life insurance benefits are exempt under many conditions. See MGL Chapter 175.

Public assistance is full exempt. See MGL Chapter 118, section 10 and Chapter 235, chapter 34.

Implements of your trade are exempt up to $5,000 and $1,500 for fishing gear. See MGL Chapter 235, section 34.

Bibles and books up to $500. See MGL Chapter 235, section 34.

Unemployment compensation is general exempt. See MGL Chapter 151A, section 36.

Worker’s compensation is 100% exempt. See MGL Chapter 152, section 47.

Veteran’s benefits for Massachusetts debtors are 100% exempt. See MGL Chapter 115, section 5.

Wages are exempt as follows: 85% of your gross earnings or 50 times the Massachusetts minimum wage, whichever is greater. See MGL Chapter 115, section 5.

Finally, there is a wildcard exemption of $1,000 plus up to $5,000 in unused exemptions from some of the above. See MGL Chapter 235, section 34.

Why Do I Need a Bankruptcy Lawyer if the Massachusetts Exemptions are Clear?

The Massachusetts exemptions may be clear, but your situation may be very different from what you read on a website and may require pre-bankruptcy planning.  Your Homestead needs to be properly filed to protect your house from the Trustee in Bankruptcy.  An experienced bankruptcy lawyer knows how to work with you to be sure you can keep your assets and discharge your debts.  Also, even if you are counting on the Homestead, you may need a lawyer to determine if you should file using the federal or state bankruptcy exemptions.