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.
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.