If a person owns firearms and files chapter 7 bankruptcy in MA how much if any is exempt?
This is an impossible question to answer generally because the exact amount will be different in every case. It can only be calculated by knowing the value of the firearms and all the debtor's other property that they want to exempt. It is, at best, only possible to know the upper limit of the value of firearms a hypothetical debtor could exempt. In Massachusetts you have a choice of federal exemptions as defined in the Bankruptcy Code, or state exemptions defined in state law. You have to be eligible to use the state exemptions. Eligibility is defined by residency in the state of MA for a long enough period of time. I assume you are eligible for and are choosing to use the state exemptions for the remainder of this answer.
There are essentially two kinds of exemptions: 1) exemptions for property categorically (based on the type of property, regardless of value), and 2) exemptions for property based on value. Some states have an categorical exemption for firearms, letting you keep a certain number of firearms in bankruptcy, regardless of their value. The state of MA does not have a categorical exemption for firearms, except firearms required to be kept by "an officer or soldier in the militia." Despite the proud history of this state, it is safe to assume that does not apply to most people any more.
So, firearms must use an exemption based on value. They are treated the same as any other personal property that is not otherwise exempt. This is handled through the so-called "wildcard" exemption. This law currently allows $6,000 of "wildcard" property to be exempted. That gives the upper limit. If a debtor was able to cover everything else they wanted to keep by using other exemptions, at most $6,000 of firearms could be exempted. Any amount of value greater than this would be potentially subject to sale by the Chapter 7 trustee for the benefit of creditors. If the debtor needed to use part of their "wildcard" amount to cover other property as well, they would have to exempt less firearms.
In practice, a trustee may be unwilling to attempt to sell items like these unless their value when sold is certain to be significantly higher than the exempt amount. Sometimes collectible items like rare guns may be worth quite a bit if enough time and effort is taken to find the right buyer, but worth less if they have to be sold by a certain time. The amount the trustee gets from the sale must be more than the exempt amount and enough to cover their statutory fee while still leaving funds available for creditors. If a trustee feels the property will not meet this test, they can abandon it as not worth selling.
Still, if a prospective debtor owned tens of thousands of dollars worth of guns, it could be comfortably predicted that they would lose at least some of them as non-exempt in a Chapter 7 bankruptcy. In that scenario, a Chapter 13 filing would be worth considering.
Attorney William Parks