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What type of property can you keep after bankruptcy?

On Behalf of | Nov 25, 2020 | Bankruptcy

If you struggle with debt you cannot afford, you can go through the bankruptcy process and keep many of your assets. Massachusetts law establishes exempt property that you can retain in a bankruptcy filing. 

Review the common property exemptions that may apply if you decide to pursue a bankruptcy as a solution to mounting debt. 

Home and auto exemptions

You can keep up to $500,000 in equity in your primary residence. To protect this equity, you must submit the Massachusetts homestead exemption. Otherwise, $125,000 is the home equity exemption limit. 

Massachusetts also allows you to retain an automobile worth up to $7,500. The state doubles this exemption if you have a disability or are older than 65. 

Household items

Other Massachusetts bankruptcy exemptions include: 

  • Clothing and bedding 
  • Heating units and appliances 
  • Up to $500 a month for utilities 
  • Up to $15,000 in furniture 
  • Books of up to $500 in value 
  • Jewelry of up to $1,225 in value 
  • Up to $2,500 in a checking or savings account 
  • One computer, one television and one sewing machines 

Wages and business items

Exemptions in this category include: 

  • 85% of your annual wages or 50 times the state minimum wage 
  • Boats and fishing equipment used commercially 
  • Up to $5,000 in tools used for trade 
  • Up to $5,000 in business supplies, materials and inventory 
  • Military uniforms, weapons and supplies 

You can also use up to $5,000 in unused exemptions to protect other property. While you can choose federal exemptions over Massachusetts exemptions, federal bankruptcy law generally has much lower asset limits.