New Collection Exemptions

Massachusetts recently passed a new law that drastically improved the property exemptions in M.G.L. c. 224 s. 16.

So what does this mean. Well, simply put, if you get sued, this is the stuff the other side cannot attach and take from you. This can be a big deal when a credit card company other other unsecured debtor defaults a loan and sues for non-payment.

The notable items of exemption are:

  • Household furniture under $15,000
  • Rent under $2,500/mo
  • Heat under $500/mo
  • An automobile valued under $7,500
  • Cash or bank account under $2,500
  • Wages under 50 times minimum wage or 85% of wages

These are all drastically greater exemptions from the old laws. This also does not include federal exemptions, such as Social Security Disability Insurance wages.

The protections are even greater for people over the age of 60 or handicapped. If someone is over 60 or handicapped and has all of their income and property within the exemption, the new law says the case MUST be dismissed. Proving a handicap can be as simple as providing documentation of state or federal disability benefits. Otherwise, a hearing can be requested to prove a handicap. Many debtors are often afraid of court because so much is out of their hands, this is one of those situations where there is some certainty in the debtors' favor.

While this doesn't take away the full attachment ability of a creditor, it should make a huge difference for all those out there who are being hit hard with their debts by lawsuit. 

Remember, it's still important to have an attorney help defend these rights. It's a new law, and it's likely creditors are still going to try attaching without regard to these rules. If anyone is interested in learning more about this, there's a great article at masslegalservices.org including a chart of all the new exemptions.