Unlike many states, Massachusetts residents filing bankruptcy can choose between either the federal or Massachusetts bankruptcy exemptions. Before you file for bankruptcy, it’s important that you understand how each set of exemptions will impact your claim.
Exemptions protect certain types of property from bankruptcy proceedings. If you file for Chapter 7 bankruptcy, most of your property will be sold (and the proceeds are subsequently used to pay your debts). However, certain types of property are exempt from Chapter 7 bankruptcy proceedings — allowing you to keep these assets. In a Chapter 13 bankruptcy, the value of exempt property is not included when calculating your payment plan. (If you have questions about these different forms of bankruptcy, contact a Springfield bankruptcy lawyer.)
While most states require you to use state-specific exemptions, Massachusetts allows you to choose between either state or federal exemptions. Depending on your situation, one set of exemptions may be more advantageous than the other.
Federal bankruptcy exemptions include:
If you are married and filing a joint bankruptcy, you can double all of these exemptions.
Massachusetts bankruptcy exemptions include:
If you are married and filing for joint bankruptcy, all of these exemptions (except your principal residence exemption) are doubled.
Before you select the federal or Massachusetts exemptions, you should consider how they would impact your assets. Importantly, you cannot pick and choose between the various state and federal exemptions — instead, you must choose one system or the other.
Your decision will typically hinge on what property you want to retain after a bankruptcy. For example, the Massachusetts bankruptcy exemptions are much more generous to homeowners than the federal exemptions. Moreover, the state exemptions allow you to retain a more valuable motor vehicle and more clothing, appliances, trade tools and furniture.
However, the federal bankruptcy exemptions allow you to keep more jewelry and offers a higher wildcard exemption. It can be difficult to fully understand your options without legal assistance. A Springfield bankruptcy lawyer can help you evaluate your debts and assets as well as formulate a comprehensive bankruptcy strategy.
If you need help assessing how Massachusetts bankruptcy exemptions impact your claim, contact the Law Office of Eric Kornblum for a consultation as soon as possible. Our firm has been helping Massachusetts residents obtain financial freedom for over 20 years. We look forward to speaking with you.