Thursday, February 16, 2012

Are my Firearms protected from my Creditors in a Bankruptcy case?

It’s no secret that Kelsey & Trask, P.C. is a Second Amendment friendly law firm. While most of our firearms practice is dedicated to licensing and firearms law compliance issues, firearms and Second Amendment issues come up in many of our other practice areas as well.

Firearms are often a good investment; they hold their value well, do not depreciate significantly, and for certain items, can appreciate significantly in value, particularly for Curio & Relic items and other historical firearms. Many firearms owners do not keep these items purely for their investment potential, but rather for personal protection or because their employment requirements requires them to keep and maintain a firearm.  In either instance, whether or not you can keep your firearms if you file for bankruptcy is an important question.

How are firearms treated in bankruptcy?

Like any other asset, firearms must be disclosed to the bankruptcy court and are subject to acquisition by the trustee if they are not exempt under the Federal or Massachusetts exemptions. There are a number of exemptions that may be used to establish the exemptability of firearms. Ultimately, the amount of the allowable exemptions may be affected by the debtor’s desire to exempt other personal property, but generally speaking, the following exemptions are available to protect a debtor’s firearms:

Federal Exemptions:

11 U.S.C. § 522(d)(5): $1,150.00, which is federal catch-all exemption and may be applied to any personal property owned by the debtor;

11 U.S.C. § 522(d)(5): Up to $10,825.00 of unused home equity not already exempted under 11 U.S.C. § 522(d)(1);

11 U.S.C. § 522(d)(6): $2,175.00 for tools and equipment used in business. For this exemption to be applicable to the debtor, the debtor must establish that the items are necessary for the debtor’s trade, employment or business.

Massachusetts Exemptions

A debtor filing for bankruptcy in Massachusetts may elect either the Federal exemptions or the Massachusetts exemptions. Massachusetts exemptions applicable to firearms ownership are as follows:

M.G.L. c. 235 § 34(10): The uniform of an officer or soldier in the militia and the arms and accoutrements required by law to be kept by the officer or soldier is fully exempt under the law. For this exemption to be applicable to the debtor, the debtor must establish that his status as an “officer or soldier” (e.g., a police officer, a National Guard member, or member of the U.S. Military) who, per the requirements of his or her duties, must personally purchase and maintain firearms for the performance of their duties.

M.G.L. c. 235 § 34(5): $5,000.00 for tools and equipment used in business. Like the federal exemptions, for this exemption to be applicable to the debtor, the debtor must establish that the items are necessary for the debtor’s trade, employment or business.

M.G.L. c. 235 § 34(17): Up to $6,000.00, representing the debtor’s aggregate interest in any personal property, not to exceed $1,000 in value, plus up to $5,000 of any unused dollar amount of the aggregate exemptions provided for the exemption of household furnishings, tools of the trade and a motor vehicle.

If you are facing bankruptcy and have personal and other property, such as a home and retirement accounts that you want to ensure is protected through the bankruptcy process, contact Attorney Matthew P. Trask to learn more about how to protect your assets and find your financial freedom.


  1. This was really interesting. I didn't know that bankruptcy law even addressed issues like this. I find it comforting to know that there are exemptions, if I ever find my self having to declare bankruptcy. I am assuming that the law has other exemptions as well, for other personal items; am I right?

  2. The bankruptcy code is ridiculous that they expect this level of detail in regards to listing of assets. The government is out of control interferring with the liberties and freedoms our Founding Fathers envisioned when they drafted the Constitution.

    1. Often, I would not disagree with your comment that the Founding Fathers would be shocked at the current status of our Government and its encroachment to our individual liberties. However, in this situation, I respectfully disagree.

      1. Filing for bankruptcy is, in most cases, a voluntary process elected by the debtor to address an untenable financial situation. A federal law (Chapter 11 of the United States Code) provides permanent relief to the debtor from his or her creditors. However, in order to obtain this benefit, the assisted person must comply with the requirements of the law, which include a disclosure of all assets of value. The bankruptcy code does not require that you "tell the government about your guns", only that you "completely disclose your assets" in order to obtain a significant financial benefit.

      2. The Founding Fathers specifically authorized Congress to enact "uniform laws on the subject of bankruptcies throughout the United States" in Article 1, Section 8, Clause 4 of the United States Constitution in 1787 - a full four years prior to the ratification of the Bill of Rights. As such, the Founding Fathers expressly authorized Congress to enact laws regarding bankruptcy prior to codifying, among other things, the right to bear arms.

      I am not suggesting that the Bankruptcy Code does not contain requirements and restrictions on debtors that occasionally yield inconsistent and unfair results. However, from a practical and historical context, I believe it is a stretch to accuse a law that does not directly and specifically infringe on other rights and provides a significant financial benefit as being counter to the intentions of the Founding Fathers.


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