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What are MA and Federal bankruptcy exemptions?

Additional Information:

I am confused about the difference between the MA and federal bankruptcy exemptions. What are the exemptions and how do I choose?

ATTORNEY ANSWER:

Exemptions exist under federal bankruptcy law and under Massachusetts state law.  Massachusetts is in the minority of jurisdictions where one can elect one or the other type of exemptions, to better protect his or her assets.  In other states, a person filing bankruptcy may only use one type of exemption.  Consulting with a competent Massachusetts bankruptcy attorney is vital to evaluate which exemptions are better for your financial situation. Choosing the right type of exemption is necessary to protect your property from being sold by the bankruptcy trustee to pay your creditors.

Often, the choice comes down to how much equity you have in your house. For example, Massachusetts’s exemptions allow you to keep up to $500,000 in equity in your home (sometime more depending on the facts of your case), whereas the federal exemptions only allow you to keep up to $21,625 in equity in your home.

Recently, Massachusetts amended all of its exemption to increase the protections for personal property (everything you own in addition to real property).  As a result, it is critical that you consult with a professional with bankruptcy experience to develop a strategy and protect your property.

Our Greater Boston Bankruptcy Lawyers concentrate their practice in bankruptcy and insolvency matters.  They serve consumers and businesses throughout the state of Massachusetts with offices located in downtown Boston, the Boston Metrowest town of Framingham, and  Provincetown, Cape Cod.

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