The Maine legislature recently made significant amendments to the state exemption laws that will go into effect on October 18, 2021, including increasing the residence exemptions to $80,000 and $160,000, increasing the motor vehicle exemption to $10,000, and adding a $3,000 cash exemption. The amendments also include a new provision adding automatic adjustments to the exemption amounts every 3 years beginning on April 1, 2024, tied to the applicable Consumer Price Index, as published by the Supreme Judicial Court.
The residence exemption amendment specifies that the exemption is limited to the amount in effect on the date a lien is recorded. There are no other indications of retroactive application and should apply to new cases filed after October 18, 2021, though it remains to be seen whether debtors will attempt to amend their exemptions in existing cases, and whether those attempts will be successful.
The amended statute also allows older debtors to keep the maximum combined residence exemption if their joint-owner spouse passes at age 67 or older and the surviving spouse is 60 or older. For example, each spouse could exempt up to $160,000 under the new law if both are 60 or older. If one spouse passes at age 67, the surviving 60-year-old spouse can still claim the combined $240,000 exemption in the residence.
Below is an overview of the specific monetary amendments to 14 M.R.S. § 4422. The full Chapter Law including all amendment language can be found HERE:
| Exemption | Existing Amount | Addition/Amended Amount |
|---|---|---|
| Residence - § 4422(1) | $47,500 for debtors OR dependents using the residence; $95,000 for debtors 60 years or older, disabled debtors, and debtors with dependents who are minors, disabled, or 60 years or older; Sale proceeds remain exempt for 6 months. | $80,000 for debtors OR dependents using the residence; $160,000 for debtors 60 years or older, disabled debtors, and debtors with dependents who are minors, disabled, or 60 years or older; Sale proceeds remain exempt for 12 months; Debtors 60 or older can keep the maximum combined exemption when their joint-owner spouse passes at 67 or older; The exemption is limited to the amount in effect on the date the lien is filed. |
| Motor Vehicle - § 4422(2) | $7,500 | $10,000 |
| Clothing, furniture, appliances - § 4422(3) | $200 per item | $500 per item |
| Jewelry - § 4422(4) | $750 for jewelry, in addition to a wedding ring and an engagement ring (with no specified value) | $1,000 for jewelry and $4,000 aggregate interest in a wedding right and engagement ring |
| Tools of the Trade - § 4422(5) | $5,000 | $9,500 |
| Life Insurance Dividend - § 4422(11) | $4,000 | $5,000 |
| Retirement Funds - § 4422(13-A) | $1,000,000 | $1,054,550 |
| Legal Awards - § 4422(14)(D) | $12,500 for bodily injury | $20,000 for bodily injury |
| Other Property - § 4422(15) (i.e. wild card) | $400 | $500 |
| Unused residence exemption - § 4422(16) | $6,000 | $10,500 |
| *NEW* Cash, Bank Account - § 4422(17) | $3,000 interest in cash, deposit accounts, or other accounts of financial institutions |
If you have any questions, or would like more information regarding pursuing evictions for non-payment, please contact Eaton Peabody’s Bankruptcy & Creditor’s Rights Practice Group Chair, Shawn Doil at sdoil@eatonpeabody.com.