Major exemptions available when filing for bankruptcy in Massachusetts are listed below. Massachusetts is one of the few states which allow its residents to choose between the federal and state exemptions. Citizens who file for bankruptcy in Massachusetts may choose between the exemption system listed below or the federal exemption system.

However, the debtor may not pick and choose between the systems. If the debtor chooses to use the Massachusetts homestead exemption, the debtor must use all the other exemptions. Likewise, if the debtor uses the federal homestead exemption, the debtor must also use the federal exemptions for personal property.

A lawyer should be consulted to determine the particulars of each exemption and to determine all available exemptions that may be filed.

1) Homestead

  • Up to $500,000 in the principal residence if the debtor filed a Declaration of Homestead with the Registry of Deeds.
  • Up to $125,000 if no Declaration of Homestead was filed with the Registry of Deeds.
  • Up to $1,000,000 if the homeowner of the principal residence is disabled or over the age of 62, regardless of the Declaration requirement.
  • Up to $2,500 in rent per month if the debtor rents the dwelling unit as the debtor’s principal residence.
  • Burial plots and tombs are exempted.

2) Equity in automobile

  • Up to $7,500 in one motor vehicle used for personal transportation or employment.
  • Up to $15,000 in one motor vehicle if the vehicle is owned or substantially owned by a handicapped person or an elderly person.

3) Household furniture

  • Up to $15,000 in necessary household furniture.

4) Personal property

  • All necessary clothing and beds for the debtor and his/her family.
  • One pew occupied by the debtor or the debtor’s family in a house of worship.
  • Two cows, two pigs, twelve sheep, and four tons of hay.
  • Military uniforms.
  • One heating unit.
  • One computer and one television.
  • Up to $2,500 in bank deposits.
  • Up to $1,225 in jewelry.
  • Up to $600 in food.
  • Up to $500 in Bibles and books.
  • Up to $500 per month for utilities.
  • Up to $300 in one sewing machine in actual use.

5) Tools of the trade

  • Up to $5,000 in tools, implements, and fixtures.
  • Up to $5,000 in stock-in-trade.
  • Up to $1,500 in fishing equipment if the equipment is used for business.

6) Insurance

  • Fraternal benefit society benefits
  • Life insurance policies to a dependent
  • Up to $400 per week in disability insurance benefits.

7) Pensions

  • ERISA qualified benefits needed for support
  • State employees
  • Public retirement benefits
  • IRA’s needed for support
  • 8) Public benefits
  • Unemployment
  • Workers compensation
  • Public assistance
  • Social security
  • Veteran’s benefits
  • Moving benefits for exercise of eminent domain

9) Alimony and child support

  • Amount reasonably necessary for support of debtor and dependents.

10) Wildcard

  • Up to $1,000 plus up to $5,000 in aggregate value of any unused amount in the automobile, household furniture, and tools of the trade exemptions. Can only be used on personal property.

How Does the Wildcard Exemption Work?

The wildcard exemption can be used by the debtor to save any property, including property not covered by the other exemptions. The catch is that the debtor can only save up to $1,000 plus unused value of the automobile, household furniture, and tools of the trade exemption. The unused value of these exemptions cannot exceed $5,000 though.

Suppose a debtor wants to save his second car from bankruptcy. The car is worth $5,000. If the debtor doesn’t use the "tools of the trade" exemption, the debtor could save his second car. Likewise, if the debtor uses up the automobile exemption, but only uses $5,000 of the household furniture exemption and only $4000 in tools of trade, the debtor would have a wildcard exemption totaling $12,000 (the remainder of the exemptions plus the $1,000 given). The debtor could use this $12,000 to save additional cars, laptops, or smart phones.

Note that if the debtor uses all $27,500 to save a car, household furniture, and tools of trade, the debtor still gets to use the $1,000 given to him. In other words, the wildcard exemption gives all debtors the right to protect up to $1,000 of property not already protected by the other exemptions.

Do I Need a Bankruptcy Lawyer?

Bankruptcy is a very complicated process and filing an exemption incorrectly can lead to that property being seized, even if the property would have been exempt had the exemption been filed correctly. Either the Massachusetts bankruptcy exemption statute or the federal bankruptcy exemption system can be used when filing for exemptions in Massachusetts.

A bankruptcy lawyer knows the particulars of filing for bankruptcy and can recommend what chapter of bankruptcy is right for you, and also ensure that your exemptions are filed correctly. A qualified Massachusetts lawyer can provide you more information if there is a legal basis for your bankruptcy case.