Bankruptcy debtors have the right to exempt property from the bankruptcy estate up to a certain dollar amount. In Massachusetts, bankruptcy debtors have the option of using either the Federal or Massachusetts exemptions to do this.
Where a debtor has a large amount of home equity they want to protect, he or she should use the Massachusetts exemptions which provide a generous Homestead exemption (up to $500,000 in home equity). Where a debtor owns no real estate, or has minimal or no home equity, the Federal exemptions should usually be used.
While the Federal exemptions are far less generous than the Massachusetts exemptions when it comes to home equity, they are far more generous with respect to personal property.
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