More Relief for Consumers

More good news! An update increasing the dollar amounts for bankruptcy exemptions in Massachusetts made its way to the Governor Patrick’s desk just before New Years Eve. Even though January 5th marked the end of the 2009-2010 session, the governor still has 10 full days to act on the bills on his desk.  Any bill that goes without action for more than 10 days will receive a so-called pocket veto.  Today is day 7.

As Issue Spot noted just weeks ago, personal property exemptions have long been in desperate need of modernization.  According to the Massachusetts statute, MGL Chapter 235, section 34 —last updated more than 30 years ago — the intent of the original law was to balance the legal rights of creditors against a debtor’s need for basic necessities in order to maintain a home and earn a living. 

The present law exempts from seizure things like 2 cows, 12 sheep, 2 swine and 4 tons of hay, and this is almost laughable in the context of how most people earn their livings or look for employment in 2011. Updating this law would increase the value of property, earnings and savings exempt from seizure during debt collection, and also permit debtors to keep computers. As families and communities continue to struggle with the impact of the economic downturn, the process of debt collection needs to change to one that is fair, at the same time facilitating the ability of debtors to fulfill their obligations.

The BBA had filed a bill several years ago that would update exemptions. Not surprisingly many bankruptcy attorneys eventually came to view the dollar amounts in that original bill as obsolete. During the summer of 2010 the BBA’s Bankruptcy Public Policy Committee identified key exemptions in our draft that could be revised to better reflect the needs of today’s household.  It was their work this summer which really brought this issue into focus for us and kept it on our radar in the final days of session. 

The BBA’s Bankruptcy Public Policy Committee had urged us to work with the National Consumer Law Center, and to adopt the exemption amounts that were in the NCLC’s bill.  As we revised our own bill we learned that the NCLC’s bill had already made enormous progress.  Working with NCLC on this issue proved to be successful. 

-Kathleen Joyce

Government Relations Director

Boston Bar Association

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