If you file for Chapter 7 bankruptcy in Maine, you can use Maine’s bankruptcy exemptions to protect your property. Maine’s bankruptcy exemptions also play a role in Chapter 13 bankruptcy. Continue reading to learn about what property is protected by Maine’s bankruptcy exemptions.
The Bankruptcy Exemptions in Maine
Exemptions are specific laws that allow you to protect certain property from your creditors, such as your car or home. If you file a Chapter 7 bankruptcy, you can keep the items that are protected by Maine’s bankruptcy exemptions. If you file for Chapter 13 bankruptcy, Maine’s bankruptcy exemptions play a role in how much you repay your creditors through your Chapter 13 plan.
Maine Requires Debtors to Use State Exemptions
Maine is an “opt out” state, meaning you are not permitted to use the federal bankruptcy exemptions when you file a bankruptcy in Maine. This means that bankruptcy filers in Maine may only exempt property using the Maine exemptions. You may also use any of the applicable federal non-bankruptcy exemptions. The federal non-bankruptcy exemptions protect items such as federal and military retirement accounts and veteran’s benefits.
Married Couples May Double Maine Exemptions
Married couples who file a joint bankruptcy in Maine are allowed to “double” the exemption amounts, meaning they each may claim the full exemption amount for any property belonging to them. Bear in mind that you may only claim an exemption and protect property that belongs to you.
To learn more about bankruptcy exemptions, including how they work, which state exemption system you should use, and special rules for the homestead exemption, see Nolo’s Bankruptcy Exemptions topic page.
Commonly Used Maine Bankruptcy Exemptions
Below is a list of commonly used Maine bankruptcy exemptions. Unless otherwise indicated, all references are to the Maine Revised Statutes.
Up to $47,500 of equity in any real or personal property that you use as a residence. Co-ops and burial plots are subject to the same exemption amount. If your minor dependents reside with you, you can protect up to $95,000 of equity in your home. Additionally, if you or your dependent is 60 years of age or older or is mentally or physical disabled and unable to maintain gainful employment, you may also protect up to $95,000 of equity in your home. Me. Rev. Stat. Ann. tit. 14, § 4422 (1).
Here's an example of when you would have equity in your home: If your home is worth $100,000 and you owe $60,000 on the mortgage, you have $40,000 of equity in your home.
To learn more, see The Maine Homestead Exemption.
Up to $5,000 of value in one motor vehicle. To learn more, see The Maine Motor Vehicle Exemption in Bankruptcy. Me. Rev. Stat. Ann. tit. 14, § 4422 (2)
Household goods and furnishing, clothing, appliances, books, animals, crops, and musical instruments, valued at up to $200 per item. Me. Rev. Stat. Ann. tit. 14, § 4422 (3)
Up to $750 worth of jewelry for personal or family use. Me. Rev. Stat. Ann. tit. 14, § 4422 (4)
One cooking stove, furnaces and stoves used for heating, and cooking and heating fuel up to ten cords of wood, five tons of coal, and 1,000 gallons of petroleum, per item, for personal or family use. Me. Rev. Stat. Ann. tit. 14, § 4422 (6)
Up to $5,000 in tools of your trade, including books, tools, and inventory. Me. Rev. Stat. Ann. tit. 14, § 4422 (5)
Up to 6 months worth of food, seed, feed, and materials for raising food. Me. Rev. Stat. Ann. tit. 14, § 4422 (7)
One of each type of farm equipment reasonably necessary to raise and harvest commercial agricultural products. Me. Rev. Stat. Ann. tit. 14, § 4422 (8)
One boat, up to five tons burden, used primarily for commercial fishing, and one of each type of professional logging equipment necessary to harvest and haul wood commercially. Me. Rev. Stat. Ann. tit. 14, §§ 4422 (9) & (9A)
Professionally prescribed health aids for you or your dependent. Me. Rev. Stat. Ann. tit. 14, § 4422 (12)
Public Benefits and Support
Social Security, unemployment compensation, veteran’s, disability, and public assistance benefits, including the federal earned income and additional child tax credits (but see In re Tetrault, No. 12-21373 (Bankr. D. Maine 2013) (child tax credit not exempt if no refund)). Alimony and support, reasonably necessary for the support of you and your dependents. Me. Rev. Stat. Ann. tit. 14, § 4422 (13)
Unemployment compensation. Me. Rev. Stat. Ann. tit. 14, § 4422 (13)(A), (C)
Veterans benefits. Me. Rev. Stat. Ann. tit. 14, § 4422 (13)(B)
Workers' compensation. Me. Rev. Stat. Ann. tit. 39, § A-106
ERISA-qualified benefits needed for support: Payments or accounts under a stock bonus, profit sharing, pension, annuity, or similar plan on account of illness, disability, death, age or length of service, to the extent reasonably necessary for the support of you and your dependents. Me. Rev. Stat. Ann. tit. 14, § 4422 (13)
State employees' retirement accounts and benefits. Me. Rev. Stat. Ann. tit. 5, § 17054
Up to $400 in any property. Me. Rev. Stat. Ann. tit. 14, § 4422 (15)
Up to $6,000 of unused homestead exemption value can be used to protect certain types of personal property. Me. Rev. Stat. Ann. tit. 14, § 4422 (16). For details, see The Maine Wildcard Exemption in Bankruptcy.
Insurance and Damages
Any unmatured life insurance contract. Me. Rev. Stat. Ann. tit. 14, § 4422 (10)
Up to $4,000 of value in dividend or loan value of an unmatured life insurance contract, for which you or your dependent is the insured. Me. Rev. Stat. Ann. tit. 14, § 4422 (11)
Crime victim’s reparation awards, life insurance proceeds or awards for the wrongful death of a person upon whom you were dependent, loss of future earnings awards and up to $12,500 in personal injury damages for you or a person upon whom you are dependent. Me. Rev. Stat. Ann. tit. 14, § 4422 (14)
Confirming the Maine Bankruptcy Exemptions
This list includes some of the more common Maine bankruptcy exemptions, but there are numerous other exemptions available to protect specific property. You can verify the current exemption amounts at the website of the Maine Legislature or by checking the statutes yourself. (To learn how to do this, see Nolo’s Legal Research Center).