Massachusetts law allows debtors to claim exemptions for some of their assets. You may, for example, claim a homestead exemption to protect your primary residence if you file for Chapter 7 bankruptcy.
The Secretary of the Commonwealth of Massachusetts website notes that properties valued at less than $125,000 automatically qualify for a homestead exemption. Residents may also file a “Declaration of Homestead” to protect a home with a value of less than $500,000. If you own a home worth more than $500,000, you may consider selling your property so you could then claim the proceeds for up to the homestead value.
Do exemptions protect tools or other assets required for work?
As noted in Section 34 of the General Court of the Commonwealth of Massachusetts website, debtors could keep up to $5,000 worth of tools or fixtures used for their businesses. Implements such as construction equipment that you need to carry out your trade qualify for protection. You may also keep an additional $5,000 worth of stock or materials that you already purchased for your business or trade.
Farmers may preserve two of their cows or two swine of any value. The Bay State’s laws allow debtors to keep up to 12 sheep and four hay tons used in their commercial production activities. If you engage in commercial fishing, you may protect a boat, nets or fishing tackle worth up to $1,500.
What type of financial resources may Massachusetts residents keep?
Massachusetts allows residents to preserve up to $2,500 in deposits held at banks or financial institutions. You may also protect up to 85% of your gross wages at your current job. As noted by the AARP, if you receive income through Social Security, a Chapter 7 bankruptcy does not affect your benefits.