Chapter 7 Bankruptcy Exemptions in Massachusetts: Protecting Your Assets 

Posted by Veeramachineni Lalitha April 2, 2025

Do you own a business that is currently experiencing financial difficulties or are you having financial problems in your personal life?  Are you worried you might have to go out out business or how you will move on with your life when you owe so much money? In some cases, declaring Chapter 7 bankruptcy could be the best answer to repay creditors and make a fresh start.

Bankruptcy

Here is more information on Chapter 7 bankruptcy, the exemptions that could protect your assets, and when you should hire an attorney. If you do need an attorney, read here: Chapter 7 Bankruptcy Attorney in Massachusetts. 

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a process of liquidating assets for those with significant unsecured debts and who have limited income to repay their creditors. It can provide a fresh start for those in debt by eliminating certain debts they likely will be unable to repay such as credit card debt, personal loans, and medical bills. Debts typically not covered are student loans, taxes, and those resulting from illegal activity. Both businesses and individuals can be eligible for Chapter 7 bankruptcy. 

What Are Exemptions in Massachusetts?

You can protect certain assets from creditors when you file Chapter 7 bankruptcy. Exemption laws are designed to ensure that those who declare bankruptcy will still be able to retain items that they need for everyday living. Types of exemptions typically include:

  • Retirement accounts such as 401(k)s and IRAs.
  • The Homestead Exemption helps protect a portion of your equity in your primary home.
  • The Motor Vehicle Exemption protects a portion of the value of your primary vehicle.
  • Personal property such as clothing, furnishings, and household goods may be exempt up to a certain value.
  • Jewelry, life insurance policies, and alimony/child support payments may also be exempt. 
  • Business assets for a sole proprietor are treated like personal assets and may include tools needed for your trade, stock-in-trade, and business-related fishing gear. There is generally a cap on these assets. 

Keep in mind there are both federal and state exemptions that you can choose between. You cannot mix and match exemptions and may only choose one. If you need an attorney to help you choose, read here: Chapter 7 Bankruptcy Attorney in Massachusetts.

When Should You Hire a Bankruptcy Attorney?

If you’re facing overwhelming debt that you are not sure how you’ll be able to repay, you should consider a consultation with a bankruptcy attorney. You may also want to hire attorney if you are getting frequent calls from creditors, do not know how to navigate the bankruptcy process, or if you have a complicated business or estate with multiple creditors and several assets or liabilities. 

Read Here: Chapter 7 Bankruptcy Attorney in Massachusetts 

If you believe you need to declare bankruptcy in order to protect your assets and provide a fresh start, you need to reach out to a bankruptcy attorney in your area who can help you understand the law and ensure your rights are protected. To learn more, read here: Chapter 7 Bankruptcy Attorney in Massachusetts. 

I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin