What Are the Maine Bankruptcy Exemptions?

What Are Maine’s Bankruptcy Exemptions and Why Do They Matter?

If you decide to file Chapter 7 bankruptcy in Maine, the state’s exemptions will be important for you. Exemptions are the rules that outline what personal property you can keep. The vast majority of Chapter 7 filers keep all their personal property. But if you happen to own an expensive piece of property whose value isn’t covered by exemptions, you may be at risk of losing it during your bankruptcy. Again, this is rare but important to be aware of.

Can You Use Federal Bankruptcy Exemptions if You File in Maine?

No.

Maine doesn't allow its residents to use federal bankruptcy exemptions, so you don’t need to worry about learning about the federal exemptions. 

There’s one possible exception though: If you haven’t lived in Maine for at least two years, you may need to use federal exemptions or the exemptions from the state you previously lived in.

What Are the Maine Bankruptcy Exemptions?

If you're filing for bankruptcy in Maine, the state offers exemptions that let you protect certain property. If you're filing jointly with your spouse, each of you can usually claim the full amount for most exemptions. That means you may be able to double the exemption amounts, unless the law says otherwise.

The Maine Homestead Exemption

Maine law protects the equity in your home from being taken to pay off most debts.

💡 Equity is the part of your home’s value that you truly own, after subtracting what you still owe on your mortgage or other loans.

The Maine homestead exemption amount varies depending on your sitaution:

• If you're single and don’t have dependents, you can protect up to $80,000 of equity in your primary residence.

• If you have minor dependents living with you, the exemption increases to $160,000.

• You also qualify for the $160,000 exemption if you or a dependent is 60 or older, or has a disability that prevents working.

• If you co-own the property, your share of equity is protected based on how much of the home you legally own.

This exemption can also be used to protect a burial plot.

Maine’s homestead exemption helps ensure that individuals, families, seniors, and people with disabilities can keep their homes during financial hardship.

Maine’s Personal Property Exemptions

Maine law protects many types of personal property from being taken by creditors, but the rules can be pretty specific. Instead of saying something broad like “all jewelry is exempt,” the law sets dollar limits for certain items or categories.

Knowing the details really matters. You may need to decide which items to protect under the set limits and consider using extra exemptions — like the wildcard or any leftover homestead exemption — to cover property that goes over those limits.

Here are some of the key personal property exemptions under Maine law:

Jewelry: You can protect up to $1,000 total in jewelry. Additionally, you can protect up to $4,000 total for one wedding ring and one engagement ring.

Motor vehicle: You can protect up to $10,000 in equity in one vehicle. If you still owe money on it, equity means the car’s current value minus what you owe. So if your car is worth $8,000 and you owe $4,000, your equity is $4,000.

Other specific exemptions (unless otherwise noted, these limits apply per item):

• Clothing, furniture, appliances, books, musical instruments, crops, and animals: Up to $500 each

• Tools of the trade (like work tools or equipment): Up to $9,500

• Cooking stove: One

• Wood stoves and heating equipment: All used for home heating

• Heating fuel: Up to 10 cords of wood, 5 tons of coal, or 1,000 gallons of petroleum

• Food: Enough to last 6 months

• Seeds, fertilizer, and tools for growing food

• Prescribed health aids

• Farm equipment: One of each type used for growing and harvesting crops

• Commercial fishing boat: One, up to 46 feet long

• Logging equipment: One of each type used for work

Extra protection: Wildcard and unused homestead exemption

Maine offers two wildcard-style exemptions that can help protect property not covered elsewhere:

• A general wildcard exemption lets you protect up to $500 of any property, no matter what it is.

• If you didn’t use all of your homestead exemption, you can apply up to $10,500 of the leftover amount to protect certain items like household goods, work tools, or personal injury payments.

This added flexibility can really help if the value of something you own goes over the regular exemption limits.

Maine’s Money Benefits

Maine protects many types of income and financial assets from creditors during bankruptcy. Here’s what you should know:

Cash and Bank Accounts

You can protect up to $3,000 in cash or funds in bank accounts. This includes money from wages, but Maine does not have a separate wage exemption, so anything over that $3,000 limit might be at risk unless it qualifies under another exemption.

Retirement and Pension Accounts

Maine law gives strong protections to retirement savings. Most tax-advantaged retirement accounts are fully exempt up to $1,054,550, including:

• 401(k)s, 403(b)s, IRAs, Roth IRAs

• SEP and SIMPLE IRAs

• Pension and profit-sharing plans

• Annuities that qualify as retirement accounts

You can also protect pension or retirement income that is reasonably necessary to support you or your dependents.

Other Protected Financial Benefits

Unless noted, these benefits are generally protected in full:

• Social Security benefits

• Unemployment compensation

• Public assistance, including EITC and child tax credit

• Child support and alimony

• Disability and illness benefits

• Veterans’ benefits

• Crime victim compensation

• Wrongful death or life insurance payments (if reasonably necessary for support)

• Group life or health insurance proceeds

• Annuities (up to $450/month under some policies)

• Awards for bodily injury (up to $20,000 under §4422(14)(D))

• Payments for loss of future earnings (if reasonably necessary for support)

• Life insurance values (up to $5,000 in certain cases)

Need Help Filing Chapter 7 Bankruptcy in Maine? 

If you decide to file Chapter 7 bankruptcy, Upsolve may be able to help you file for free. When you file Chapter 7, exemption laws are what help protect your property so you can get a financial fresh start without having to start from scratch. Upsolve’s free web app walks you through the process of claiming exemptions to protect your property.

If you’d like to get legal advice from a seasoned bankruptcy attorney, Upsolve can help connect you for a free consultation. If you own a home or any expensive property you’re worried about losing if you file bankruptcy, it’s a good idea to speak with an attorney first to see how bankruptcy might affect your property.