Personal Bankruptcy Considerations in Massachusetts

If you are thinking about filing Chapter 7 or Chapter 13 personal bankruptcy, Massachusetts has some exemptions that you may choose to use instead of those allowed under federal bankruptcy law. An exemption is something that you currently own and keep, which is not sold off to pay your debts. There are exemptions under both federal and state law. Massachusetts is one of the states that allows a debtor to choose which list of exemptions he or she is going to use. You can't pick some items from one list, and different items from the other list.

• Chapter 7 bankruptcy is sometimes called the liquidation bankruptcy, because with this type of bankruptcy your assets are put into a bankruptcy estate and sold to pay your creditors. It is more popular with debtors who have high amounts of unsecured debt, but not a great deal of property to protect. If you are current on your mortgage and car payments, and there is not significant equity in either you may be allowed to keep those items and still have your unsecured debt discharged.
• Chapter 13 bankruptcy is a debt restructuring plan under which you have a court ordered repayment plan that lasts three to five years. Most likely you will not pay off all your outstanding debt in that time period, but if you follow the plan you can have your remaining debt discharged.

Massachusetts personal bankruptcy exemptions include a wide variety of items which can be kept. Some of the more interesting personal exemptions on the state list include:

• Clothing, beds and bedding, enough for the family.
• Up to $75 per month used to pay for heat, water, hot water and electricity.
• Up to $3,000 worth of furniture (other than bedding).
• Up to $200 worth of Bibles, school books and other books.
• Up to $500 worth of tools needed for your trade, plus an additional $500 worth of materials used for your business.
• Law enforcement or soldier uniforms.
• $200 sewing machine.
• Burial plot and a church pew.
• Four tons of hay, 2 cows, 12 sheep and 2 swine.
• Car that you use for work, valued up to $700.

Get Legal Help

Obviously, this listing is not exhaustive and bankruptcy is a serious matter that can have a long term impact on your future. If you are considering bankruptcy and you live in Massachusetts, contact a local bankruptcy attorney who can analyze your personal financial situation and help you decide if bankruptcy is the right choice for you, and if so, which type.