Bankruptcy in Massachusetts (2026): Exemptions & Means Test

Massachusetts is one of the more generous states for people filing bankruptcy, mainly because of two features. First, Massachusetts did not opt out of the federal exemptions, so filers can choose either the federal exemption set or the Massachusetts state exemptions, whichever protects more. Second, the Massachusetts homestead is unusually strong, with an automatic homestead and a much larger declared homestead under the Homestead Act, M.G.L. c. 188. The figures below are current as of mid-2026, and you should confirm the latest amounts before relying on them.

This page is general legal information, not legal advice. It is part of our Bankruptcy by State series.

Does Massachusetts use state or federal bankruptcy exemptions?

Massachusetts lets filers choose. Unlike the roughly two-thirds of states that have opted out, Massachusetts permits a debtor to elect either the federal bankruptcy exemptions in 11 U.S.C. 522(d) or the Massachusetts state exemptions. You pick one full set; you cannot combine items from both. The right choice depends on your assets, and the homestead is usually the deciding factor: a homeowner with substantial equity almost always does better with the Massachusetts declared homestead, while a renter or a filer with little home equity often does better with the flexible federal wildcard.

A residency rule applies. To use a state's exemptions you generally must have been domiciled there for the period set by 11 U.S.C. 522(b)(3), and tax-qualified retirement accounts are protected under either set.

The Massachusetts homestead: automatic vs. declared

Massachusetts protects home equity through the Homestead Act, M.G.L. c. 188, which provides two levels of protection. Understanding the difference is the most important step for a homeowner.

The automatic homestead under section 4 protects up to $125,000 of equity in a principal residence with no paperwork at all. It exists by operation of law for the owner and family who occupy the home. This is the floor for every Massachusetts homeowner.

The declared homestead under sections 1, 3, and 5 protects up to $1,000,000 of equity, but only if you record a written Declaration of Homestead with the Registry of Deeds for the county where the home sits. The declared amount was increased to $1,000,000, up from the long-standing $500,000, effective August 6, 2024. Because the declaration is inexpensive to record and multiplies the protected equity eightfold, recording one is a routine step for Massachusetts homeowners who want the full protection in or out of bankruptcy.

There is an additional tier for older and disabled owners. Under M.G.L. c. 188 section 2, an owner who is 62 or older or who is disabled may declare a separate homestead of up to $1,000,000, and where co-owners each qualify, those amounts can aggregate, producing protection well above the standard declared figure. Confirm the current amounts and recording requirements before relying on them.

Vehicle, wildcard, and personal-property exemptions

Under the Massachusetts state exemptions, everyday property is protected through M.G.L. c. 235 section 34 and related statutes, covering household furniture, clothing, tools of the trade, a portion of wages, and, under clause Sixteenth, an automobile up to $7,500 of wholesale resale value, rising to $15,000 for a debtor who is handicapped or 60 or older. The state wildcard in clause Seventeenth is the comparatively weak piece: $1,000 of any personal property plus up to $5,000 of any unused furniture, tools-of-trade, or vehicle exemption. Massachusetts also protects tax-qualified retirement accounts.

The federal alternative set, in 11 U.S.C. 522(d), is often better for non-homeowners because of the wildcard, not the car. For cases filed on or after April 1, 2025, the federal amounts include a $1,675 wildcard plus up to $15,800 of any unused homestead applied to any property, a $16,850 aggregate household-goods exemption, a $31,575 homestead, and a $5,025 motor-vehicle exemption. That is a real tradeoff rather than a clean upgrade: the federal wildcard is far larger than the Massachusetts one, but the federal car exemption is smaller than the Massachusetts $7,500, so a filer who switches to the federal set protects less of a vehicle. These federal figures adjust again on April 1, 2028. The practical takeaway is that homeowners with equity usually choose the Massachusetts declared homestead, while filers without much home equity usually choose the federal set for the bigger wildcard. Always confirm the current numbers before filing.

The Chapter 7 means test in Massachusetts

The means test screens who can file Chapter 7. It first compares your household's current monthly income, annualized, to the median family income for a Massachusetts household of the same size. If your income is at or below the Massachusetts median, you generally qualify for Chapter 7. If it is above, you complete the longer calculation that subtracts allowed living expenses to see whether you have disposable income that should fund a Chapter 13 plan.

The U.S. Trustee Program publishes the median figures. For cases filed on or after April 1, 2026, the Massachusetts median family income is:

Add $11,100 for each additional person beyond four. These figures were published February 12, 2026 and apply only to cases filed on or after April 1, 2026. The U.S. Trustee Program revises them about twice a year, so confirm the figures for your filing date.

Chapter 7 vs. Chapter 13 in Massachusetts

Chapter 7 is a liquidation. A trustee may sell non-exempt property to pay creditors, but because Massachusetts homeowners can shield large home equity through the declared homestead, many Chapter 7 cases involve no property sale at all. Most remaining unsecured debt, like credit cards and medical bills, is discharged in a few months.

Chapter 13 is a reorganization for filers with regular income. You keep your property and repay part or all of what you owe over three to five years. It is often used by homeowners behind on a mortgage, since the plan can cure missed payments over time and stop a foreclosure.

In both chapters, filing triggers the automatic stay under 11 U.S.C. 362, which immediately halts most collection activity, including foreclosure, wage garnishment, repossession, and collection calls.

Where you file bankruptcy in Massachusetts

Massachusetts bankruptcy cases are filed in the U.S. Bankruptcy Court for the District of Massachusetts, the single federal bankruptcy district covering the whole state. The court sits in Boston, Worcester, and Springfield. Federal law requires approved credit counseling before you file and a debtor-education course before your debts are discharged.

What bankruptcy can and cannot do

Bankruptcy discharges most unsecured debts, but several categories generally survive: most student loans (absent a separate showing of undue hardship), recent income taxes, child support and alimony, and debts from fraud or willful injury. Secured debts like a mortgage or car loan continue if you keep the collateral and keep paying.

Because Massachusetts lets you choose between two exemption systems and offers a homestead worth recording, the analysis is more involved than in opt-out states. Many people consult a licensed Massachusetts bankruptcy attorney before filing.