Like many things regarding bankruptcy, the question of whether you could keep your home would depend on the specifics of your case. However, many Chapter 7 applicants do end up retaining their homes.
In Massachusetts, there are laws that could protect your home from your creditors. One of the most important of these is the homestead exemption. Please continue reading for a discussion of this protection and why it could be relevant during your liquidation.
In this discussion, “liquidation” refers to the process of selling off your assets in order to settle your debts. This is one of the core principles of chapter 7 bankruptcy. It allows you, and if you qualify, to get a fresh financial start by getting rid of non-essential property.
As described on FindLaw, the Massachusetts homestead exemption limit is $300,000. This is well over the federal limit, but, as you are likely aware, the average Massachusetts home is more expensive than the overall national average.
You may also be interested to know that, as long as you maintain the residence in a home, there is a possibility that it could qualify for the exemption. Massachusetts law includes one- to four-family homes in its definitions. For example, a landlord could potentially claim a homestead exemption for a two-family home in which the landlord lived.
These matters can become complicated, and it would also probably be prudent to look at the overall bankruptcy and debt relief strategy before deciding how and where to apply these exemptions. Therefore, please do not look at this as legal advice. It is only meant as background information.