Massachusetts Personal Injury Bankruptcy Exemption

Here in Massachusetts, we can choose between the federal and state bankruptcy exemptions. Exemptions are laws that allow you to keep property you have when you file bankruptcy. A personal injury lawsuit is "property" that you will lose to a Chapter 7 bankruptcy trustee if it is not exempt. So, when are personal injury suits--for car accidents, slip and falls, etc.--exempt?

It's fairly simple: There is no Massachusetts exemption for injury awards in bankruptcy, but since we have the right to choose exemptions under federal law, we have the following:

Effective April, 2010, the federal personal injury bankruptcy exemption is $21,625 for "personal bodily injury, not including pain and suffering or compensation for actual pecuniary loss, of the debtor or an individual of whom the debtor is a dependent."

There are various complications when it comes to exempting personal property awards in bankruptcy, mainly involving liens. Seek out experienced bankruptcy counsel if you wish to attempt to exempt an injury suit.