“It takes money to make money,” goes the old saying.
For many people, making a living requires specialized equipment as well. Can’t imagine a dentist without a drill!
Fortunately laws have recognized for decades that debtors should not be stripped of the very tools they need to make the money needed to survive. As a result, nearly every state as well as the federal government has an allowance for the “tools of the trade” that debtors need to keep to get back on their feet in the money-making working world.
Under current federal law, each debtor may keep (“exempt”) up to $2175 in tools of their trade. The notion of a “tool” is loosely interpreted, and can include say, the law books of a bankrupt lawyer.
New Hampshire state law is even a little bit more generous — the Granite State allowance for tools is $5000 for debtors filing for bankruptcy there.
Typically, Massachusetts state law is the most miserly, with an exemption limit on tools of only $500. This means that most Massachusetts debtors contemplating bankruptcy will probably want to stick with using the federal list of exemptions if it is at all possible to do so.
If you are at all confused about which list of exemptions apply to your situation, a call to a bankruptcy lawyer can probably get you a quick answer.
By Doug Beaton