Boston Bankruptcy Attorney

Chapter 7 Bankruptcy: Exempt Assets

In Chapter 7 bankruptcy, an individual’s assets are seized by the bankruptcy trustee and liquidated at a sale to pay off the costs of the bankruptcy proceedings and any creditors whose debts were not discharged. Certain types of property, however, are protected by law and cannot be seized to pay off debts under Chapter 7 bankruptcy.

Homestead Exemption

Under Massachusetts law, an individual may retain property they occupy that has a value of up to $100,000. If the debtor is over 65 years or disabled, he or she is allowed to retain a property of up to $200,000. In order to keep a homestead, a person must record their homestead declaration before filing for bankruptcy.

Other Exemptions

Other things exempt from creditors by Massachusetts law include insurance, pensions, and personal property.

Insurance exemptions include:

• Disability benefits
• Fraternal benefit society benefits
• Group annuity policy or proceeds
• Group life insurance policy
• Life or endowment policy, proceeds or cash value
• Life insurance annuity contract which states that it is exempt
• Life insurance policy, if the beneficiary is a married woman
• Life insurance proceeds, if there is a clause prohibiting the proceeds from being used to pay the beneficiary’s creditors
• Medical malpractice self-insurance

Pension exemptions include:

• ERISA-qualified benefits
• Private retirement benefits

Personal property that is exempt from sale under Chapter 7 bankruptcy includes:

• Bank deposits up to $125
• Food or cash for food to $300
• Bibles and books
• Sewing machines
• Burial plots, tombs, and church pews
• Cash for utilities
• Cash for rent
• Cooperative association shares
• 2 cows, 12 sheep, 2 swine, and 4 tons of hay

Contact a Boston Bankruptcy Lawyer

For a complete list of available exemptions under Chapter 7 bankruptcy and the requirements to claim them, contact the Boston bankruptcy lawyers of Joshua Spirn & Associates at 1-800-975-5346.