When filing for personal bankruptcy in Massachusetts, you can have a multitude of questions. You may want to know whether one can keep assets like a home, car or furniture after filing for bankruptcy. Understanding which property may be exempt in your bankruptcy proceeding requires an understanding of the federal Bankruptcy Code and specific state laws that affect your case.
In the Massachusetts Bankruptcy Code, you can find sections that provide for homestead exemptions and exemptions for other personal belongings. Under the federal Bankruptcy Code, you must have lived in a home for three years and four months prior to claiming a homestead exemption that is greater than $146,450. The value of your home is determined by the fair market value at the time of filing for bankruptcy. An attorney will typically rely on the value of the home that is given through a county assessment of the property. After checking the county assessment and other websites that provide the value of the home, an attorney may suggest that the client pay for the property to be appraised.
Another important form of property that debtors usually want to keep is their car. Whether you can keep a car depends on the amount of equity that you have in your car. If you do not have any equity in the car after a car loan and exemption have been subtracted from the value of the car, then you can keep the car. A bankruptcy trustee will have no incentive to take the car because he or she can’t liquidate the car and use proceeds to pay off creditors. If you do have equity in the car that exceeds the value of exemptions that may be claimed, then you may still be able to keep the car. You can choose to reaffirm the debt and continue paying off the car loan under the terms and conditions of the original loan. You may also decide to buy the car in one payment from the creditor through redemption.
Under §522 of the Bankruptcy Code, you will also be able to keep proceeds from a retirement account. Other belongings like jewelry, furniture and equipment used for work are also protected under the Bankruptcy Code. You may claim an exemption of up to $1,450 in jewelry held for the use of a debtor. You may also claim exemptions for up to $550 in any particular appliance, book, clothing item, musical instrument, piece of furniture or household good. You may only claim up to $11,525 in total value for household furnishings, goods, apparel, appliances, animals, musical instruments, and other items.
For children’s college funds, parents will also be able to claim this income as exempt in a bankruptcy proceeding. You should look at the particular state statutes that control whether college funds may be exempt in bankruptcy proceedings.
When you face great financial obstacles in your life, filing for bankruptcy can provide sound solutions and a fresh start. An experienced Massachusetts bankruptcy attorney can help you get started in the process of filing a bankruptcy petition and deal with any issues that may arise.
Bankruptcy can be a very difficult decision – you should not have to face it alone. Contact us today for assistance. We will provide you with a free initial consultation at which time we will discuss your circumstances and recommend a solid course of action. If you are considering bankruptcy – call the Law Office of Brian R Lewis today!