You Do Not Lose All Your Property in Chapter 7 Bankruptcy
Many people are afraid of filing for bankruptcy — especially Chapter 7 bankruptcy — because they think they will lose all their possessions. This is not true. Both state and federal bankruptcy laws define what property is exempt from being taken by your creditors. In Massachusetts you can choose to use the state or the federal exemptions — they may be different and one may be more advantageous for you.
Bankruptcy is not a one-size-fits-all process. When you talk with a Massachusetts bankruptcy attorney at the law firm of Army & Army, L.L.C., he will review your list of debts and assets. He can then advise you whether state or federal exemptions will be more favorable in your case. There may be caps and conditions on some property exemptions. He can explain how this will affect you.
If you are considering bankruptcy, make an informed decision. Talk with a Worcester County bankruptcy lawyer about your concerns in a free consultation.
Property You Can Generally Keep
The following are property exemptions in Massachusetts bankruptcy filings:
- The home you own and occupy (or intend to occupy) if it is valued at $500,000 or less
- Motor vehicles up to a value of $700 (Massachusetts) or $3,450 (federal) (the equity in your car is based on the car's market value, less any loans against it)
- Tools and clothing you use for work up to $500 in value (Massachusetts) or $2,175 (federal)
- Business partnership property
- Household goods up to $3,000 (Massachusetts) or $10,775 (federal) (there are also limits to the value of an individual item)
- Bank deposits up to $500
- Pension and retirement funds, IRAs and Keoghs
- Public benefits, such as veterans' benefits, AFDC, unemployment benefits, workers' compensation and welfare
- Funds put into a state tuition program more than one year before the bankruptcy filing for the benefit of a child or grandchild
Why This Is Important to Know
It's important to get answers to your questions about property exemptions before filing bankruptcy so you don't do things that could look like fraud to the bankruptcy trustee. Equally bad is selling off property or assets when you don't need to in order to pay creditors. Too often we see people who raid their IRA or retirement fund to pay bills when that money would have been shielded from their creditors.
Are you worried about repossession or home foreclosure? Filing for bankruptcy can stop repossession and stop foreclosure, at least temporarily, giving you time to take other actions. To learn more about bankruptcy, please read our Bankruptcy FAQs.
For a No-Risk, Helpful Consultation With a Worcester and Middlesex County Bankruptcy Filing Attorney, Call 888-339-4206
Get answers before you act. Contact a Worcester and Middlesex County debt relief attorney online or call to request a free bankruptcy consultation.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
