Maine Bankruptcy Laws
The vast majority (85%) of Maine clients choose Chapter 7 bankruptcy. For them, it is important to understand what type of property is exempt from liquidation under state statues, as federal exemptions are not available in this state.
Homestead |
Up to $47,500 (or $90,000 for those over 60, disabled, or supporting a resident minor dependent |
Personal Property |
Motor vehicles up to $5,000; household goods, furnishings, food and fuel, clothing, crops, farming tools and equipment up to $200 each; wrongful death recoveries; personal injury recoveries up to $12,500; $400 of any property; burial plots in lieu of homestead exemption; arms, clothes, and equipment for military personnel; balance on repossessed property financed to $2,000 |
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; legislators; judges; state employees; ERISA-qualified benefits |
Public Benefits |
Unemployment; veterans’ benefits; Social Security; crime victims’ compensation; earned income and child tax credits; federal, state, or local public assistance; worker’s comp |
Tools of the Trade |
Up to $5,000 of books, materials, and stock; 1 each of farm implements |
Insurance |
Some forms of life insurance or proceeds; disability or health insurance proceeds, avails or benefits; group life or health; fraternal benefits; death benefits for police, fire, or EMS personnel killed in the line of duty |
Miscellaneous |
Unused homestead up to $6,000, unused tools of trade, personal injury recoveries, or personal property |
Once the bankruptcy options are chosen, the debtor must undergo credit counseling before their lawyer can file the bankruptcy petition with the court, which then puts a temporary stay on all debt collections. The bankruptcy trustee takes charge of processing the petition and organizes a 341 meeting with creditors to have the client answer any questions. Once complete, and if there are no irregularities, the debtor is free to rebuild their financial status.
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