Massachusetts Bankruptcy Exemptions


ADVERTISEMENT -
Overview

How Exemptions Work In Massachusetts

Exemptions in Chapter 7 and Chapter 13

You can protect property covered by an exemption regardless of whether you file for Chapter 7 or 13. But each chapter treats nonexempt property—things not covered by an exemption—differently.

  • In Chapter 7 bankruptcy, the bankruptcy trustee sells nonexempt property and distributes the proceeds to creditors.
  • In Chapter 13 bankruptcy, you keep everything you own. However your repayment plan must pay the value of the nonexempt property equity, or your disposable income, whichever is more.

The different approaches ensure that creditors receive the same amount regardless of the chapter filed.

Sources of Exemption Laws

Bankruptcy law is federal, but the laws regarding debts, collection, and property have traditionally resided in state law.

State Exemption Laws

Every state has its own set of exemptions laws.

These laws specify what kinds of property are "exempt from attachment" by a creditor in those states. These laws informally known as "exemption laws."

Sometimes they are collected under one section of a statute, but there are miscellaneous exemption provisions throughout the laws of Massachusetts.

Federal "Non-Bankruptcy" Exemptions

In addition to your state exemptions, various kinds of federal benefits, retirement accounts and other things are exempt under federal law, separate and apart from the Federal Bankruptcy Code — Title 11 of the United States Code (11 U.S.C.). 

In all but 19 states, you must use these laws to protect your property, like your car and your house.

Federal Bankruptcy Exemptions Under Section 522 —
an Alternative System Available in 19 States

In 19 states you have the option of using the Federal Bankruptcy Exemptions  found in (11 U.S.C. Section 522(d)) AlaskaArkansas, Connecticut, District of Columbia, Hawaii, Kentucky, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, New Mexico, Texas, Vermont, Washington, Wisconsin.

Which exemptions system you should choose may depend on the particular facts of your situation, where you live, and what kinds of property you own. 

Exemption Categories

We have categorized state and federal exemptions by category

Real Estate: Homestead

Personal Property: Personal Property, Tools of Trade, Wildcard

Retirement, & Insurance,  Public Benefits

Doubling Exemptions for Joint Filers?

When a married couple files for bankruptcy jointly, federal law and the laws of many states allow them each to claim the full amount of an exemption.
(11 U.S.C. § 522.) Because a couple gets to claim twice the amount available to those who file alone, this practice is informally known as “doubling.”

Not all states allow doubling, however. (California, for example, does not.) And some states allow married couples to double only certain exemptions (for example, they might be able to double personal property exemptions but not the homestead exemption). In the charts that follow, we indicate exemptions that cannot be doubled (and states that don’t allow doubling at all). Unless you see a note stating that you cannot double, assume that you can.

How Exemptions work in Massachusetts 

You can choose the federal exemptions in Massachusetts, however the state  Homestead is quite generous $125,000 "automatic" homestead and $500,000 for "declared" homesteads. Joint filers cannot double.
Massachusetts is also one of those states that specifies that you can keep 2 cows, 12 sheep, 2 swine, 4 tons of hay.

And,  on a more practical note, you can exempt up to $15,000 of household property, and a motor vehicle equity up to $7500 which is quite generous compared to the national average.

And in addition to the $1000 wildcard exemption, you can use up to $4000 of the unused homestead or vehicle exemption for any other property. All in all, Massachusetts does a good job protecting debtors who file for bankruptcy.

Massachusetts Exemptions Discussed On The Web

Both UpSolve and Nolo have discussions of Massachusetts bankruptcy exemptions.

Does Massachusetts Adjust Exemptions for Inflation?

Massachusetts does not adjust exemption amounts for inflation. 

ADVERTISEMENT -
Homestead

Massachusetts Homestead Exemption

Homestead Exemptions - State System

Homestead Exemption Under Massachusetts Law

Automatic homestead $125,000; Declared homestead $500,000 for property you occupy or intend to occupy (including mobile home); (co-owners may not double) (special rules if over 62 or disabled, may double to 1,000,00).

Amount Joint amount

500,000

500,000

NOTE: Residency Requirement Caps Maximum Homestead at $189,050 if you've recently moved to a State that allows more than that

Under the 2005 bankruptcy law, you must be have lived in the state for at least 40 months (3 years + 4 months) before you can claim any homestead protection greater than $189,050. (If your state's exemption offers less than this amount, the law is irrelevant to you.) .

IF you are moving to another state, OR you moved to Massachusetts within in the last two years, click here.

Federal Non-Bankruptcy Homestead Exemptions

These are exemptions under federal law, but and are NOT part of the bankruptcy code list of exemptions in 522(d), so states cannot "opt out" from these exemptions. These exemptions available in every State ONLY IF you are using the state exemptions. You cannot use these exemptions if you are using the federal bankruptcy exemption scheme under § 522(d)

-

Homestead Exemptions - Federal System § 522(d)

Can Massachusetts debtors use the Federal Bankruptcy exemptions instead of Massachusetts exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Home Valuation tool

Just add your street address to get an estimate of the value of your house, and all others in your neighborhood. (Note: Does not serve all areas, and valuations are imperfect estimates only.)

ADVERTISEMENT -
Tenancy By The Entirety

Does Massachusetts Recognize Tenancy by the Entirety?

Massachusetts recognizes TBE for all types of property.

-

 

ADVERTISEMENT -
Personal Property

Massachusetts Motor Vehicle Exemption & Other Personal Property Exemptions

Massachusetts Personal Property Exemptions — State System

Personal Property Exemptions Under Massachusetts Law

CAR:

$7,500; $15,000 if used by elderly or disabled debtor

Federal Non-Bankruptcy Personal Property Exemptions
(available only if using State System)

Personal Property Exemptions — Federal System § 522(d)

Can Massachusetts debtors use the Federal Bankruptcy exemptions instead of Massachusetts exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Personal Property Exemptions in Other States

ADVERTISEMENT -
Tools of Trade

Massachusetts Tools of Trade Exemptions

Tools of Trade Exemptions — State System

Massachusetts Law Tools of Trade Exemptions

Federal non-bankrupcty Tools of Trade Exemptions

Tools of Trade Exemptions — Federal System § 522(d)

Can Massachusetts debtors use the Federal Bankruptcy exemptions instead of Massachusetts exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Tools of Trade Exemptions in Other States

ADVERTISEMENT -
WildCard

Massachusetts WildCard Exemption

Wildcard Exemptions — State System

Massachusetts Law Exemptions

up to $1,000 plus up to $5,000 unused about of exemptions for automobile, household furnishings, and tools of trade

-

Federal Non-Bankruptcy Wildcard Exemptions (none)

Wildcard Exemptions -- Federal System § 522(d)

Can Massachusetts debtors use the Federal Bankruptcy exemptions instead of Massachusetts exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

-

WildCard Exemptions in Other States

ADVERTISEMENT -
Wages

Massachusetts Wage Garnishment Exemption

 Massachusetts collections law and federal labor law (a federal non-bankruptcy exemption) set limits on what wages can be garnished.
 
The Wage Garnishment exemption in bankruptcy is for "earned by unpaid wages"... that is wages you'd earned as of the date you filed, but hadn't been paid for yet.
In a few states, the exemption protects earlier wages deposited in a bank account.
 
As the NCLC pointed out in a 2019 survey of state wage garnishment laws, some states fail to guarantee that a debtor can earn a poverty wage, free of garnishment.

See also on LegalConsumer.com

From Elsewhere on the web:

Wage Exemptions -- State System

Massachusetts Law Wage Garnishment Limits

Massachusetts garnishment law protects 85% of gross wages or 50 times the greater of the federal or state ($12/hour) minimum wage.

Massachusetts earned a “B” from the NCLC for its protection of wages from garnishment, because it “protects enough wages so that paycheck does not drop below the poverty level ($495.19 per week for family of four).”

 

Federal Non-Bankruptcy Law
(available only if using State System)

Federal "non-bankruptcy" law also offers exemption protection for wages.

Wage Garnishment — Federal System § 522 (no exemption)

Can Massachusetts debtors use the Federal Bankruptcy exemptions instead of Massachusetts exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Wage Garnishment in Other States

ADVERTISEMENT -
Insurance

Massachusetts Insurance Exemptions - Life, Disability, Survivors Benefits

Insurance Exemptions — State System

Massachusetts State Law Insurance Exemptions

Federal Non-Bankruptcy Insurance Exemptions
(available if using State System of exemptions)

Federal System § 522(d) — Insurance Exemptions 

Can Massachusetts debtors use the Federal Bankruptcy exemptions instead of Massachusetts exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

ADVERTISEMENT -
Pensions & Retirement Assets

Massachusetts Pension and Retirement Exemptions
Will I Lose My Retirement Savings If I File For Bankruptcy?

Virtually all types of tax-exempt retirement accounts are exempt in bankruptcy, whether you use the state or federal exemptions. You can exempt 401(k)s, 403(b)s, profit-sharing and money purchase plans, IRAs (including Roth, SEP, and SIMPLE IRAs), and defined-benefit plans.

These exemptions are unlimited—that is, the entire account is exempt, regardless of how much money is in it—except in the case of traditional and Roth IRAs. For these types of IRAs only, the exemption is limited to a total value of $1,512,350 per person (this figure will be adjusted every three years for inflation). If you have more than one traditional or Roth IRA, you don’t get to exempt $1,512,350 per account; your total exemption, no matter how many accounts you have, is $1,512,350.

  • If you are using the federal bankruptcy exemptions, you can find this retirement account provision at 11 U.S.C. § 522(d)(12) and the current exemption amount in 11 U.S.C. § 522(n).
  • If you are using state exemptions, cite 11 U.S.C. § 522(b)(3)(C) as the applicable exemption when you complete your bankruptcy papers.

Pension & Retirement Exemptions — State System

Pension & Retirement Exemptions under Massachusetts Law 

Federal Non-Bankruptcy Pension & Retirement Exemptions
(available only if using State System)

Pension & Retirement Exemptions — Federal System § 522(d)

Can Massachusetts debtors use the Federal Bankruptcy exemptions instead of Massachusetts exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Pension & Retirement Exemptions in Other States

ADVERTISEMENT -
Public Benefits

Public Benefits Exemptions for Massachusetts

Public Benefits Exemptions — State System

Massachusetts Law — Public Benefits Exemptions

Federal "Non-Bankruptcy" Public Benefits exemptions
(available in if using state system)

Public Benefits Exemptions — Federal System §522(d)

Can Massachusetts debtors use the Federal Bankruptcy exemptions instead of Massachusetts exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

Public Benefits Exemptions in Other States

ADVERTISEMENT -
Miscellaneous

Massachusetts Miscellaneous Exemptions

Miscellaneous Exemptions -- State System

Miscellaneous Exemptions Under Massachusetts Law

See also, "Wildcard"

-

Miscellaneous Exemptions Under Federal Non-Bankruptcy Law

Miscellaneous Exemptions -- Federal System § 522

Can Massachusetts debtors use the Federal Bankruptcy exemptions instead of Massachusetts exemptions?

Yes. Federal exemptions are available.

The Federal Bankruptcy Exemptions under 11 U.S.C. § 522(d) are available to you if

  • you haven't lived in any state longer than 180 days for a while,
  • or
  • if your state allows the Federal exemptions as a choice.

-

Miscellaneous Exemptions in Other States

Massachusetts Exemptions