Common Reasons For Filing Bankruptcy In Massachusetts
Individuals in Massachusetts may declare bankruptcy for a number of reasons, but there are a few causes in the Bay State that are especially common. These reasons may depend on shifting circumstances, and different economic pressures may trigger more bankruptcies in specificperiods. Although times change and the economy may face a variety of hurdles over the years, some reasons for bankruptcy always remain the same.
If you are considering bankruptcy in Massachusetts, it is best to consult with an experienced bankruptcy lawyer as soon as possible. A legal professional can guide you through virtually every aspect of your bankruptcy and help you minimize losses wherever possible. With the helpof a qualified bankruptcy attorney in Massachusetts, your bankruptcy may go a lot smoother than you initially expected.
Reason Number One: Medical Expenses
According to various studies, more than 60% of all Americans who choose bankruptcy do so because of medical reasons. Healthcare reform has had essentially no impact on the number of Americans who file for bankruptcy due to medical costs in Massachusetts. According to a number of additional experts, most Americans are not fully aware of the limitations of their health insurance policies. This often leads to bankruptcy.
Reason Number Two: Career Issues
Reason Number Three: Credit Card Debt
Reason Number Four: Divorce
Enlist the Help of a Qualified Bankruptcy Lawyer Today
The Dozen Myths About Filing For Chapter 7 Bankruptcy In Massachusetts
1.; Its immoral or wrong to file for bankruptcy protection.; Its neither.; Federal law allows it; state law allows it.; Most democracies allow it.; It provides for a fresh start, which is what helps the economy.
2.; If I file bankruptcy, Ill never be able to buy a house, or a car, again.; Wrong.; Sure, filing for bankruptcy protection has a negative effect on your credit score.; But, if you are behind on bills, your credit score has already taken a hit.; If you get a fresh start, you can rebuild your credit score.; See our page on life after bankruptcy ;in Massachusetts.
3.; Bankruptcies are public so everyone will know.; Well, they are public, and there will always be a record at the federal bankruptcy court, but only folks who really want to find out will look. Most folks will never look.; And, since its completely legal to file, there is nothing wrong.; See aboveand below!
4.; If I file for bankruptcy, Ill loose everything.; No, there are exemptions which include your home, your retirement accounts, your vehicle, your clothing.; You should seek an experienced bankruptcy attorney to work on keeping as many of your assets as you can.
5.; The new bankruptcy law makes it too difficult for most folks to file for bankruptcy.; False.; The new law has income limits, requires you to take a credit class and requires more paperwork but it does not prevent most folks from filing for bankruptcy protection.
If I File Bankruptcy Will My Friends And Coworkers Find Out
Generally not: A bankruptcy filing, like most court proceedings is a public record. If an individual wanted to know the details of your bankruptcy filing, they could go to the bankruptcy court, request your case number and look at the documents you filed. However, they would have to already know that you had filed, or have some reason to suspect that you had before they would go to the courthouse or open a paid account to access court filings. Personal bankruptcy filings are not published in any newspapers or local directories and even a Google search of your name wont reveal that you have filed . For most of our clients though, the only people who find out about the bankruptcy filing are their creditors, the bankruptcy court and anyone they decide to tell about it.
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Where Is The Bankruptcy Court And Will I Have To Go
Usually you only have to go once. We will go with you. There are two bankruptcy court divisions in Massachusetts, one in Boston and one in Worcester . Note that at this time we only handle cases for people who live in or own property in Suffolk, Middlesex, Norfolk, Essex, Worcester, Plymouth, Bristol, Barnstable, Nantucket, Dukes counties. Where you are assigned is based on your city of town of residence.
Boston:John. W. McCormack Post Office and Court House 5 Post Office Square, Suite 1150Boston, MA 02109-3945
How To Keep Your Property And File For Bankruptcy In Ma
Chapter 7 bankruptcy bankruptcy puts all of your property into a bankruptcy estate. Any items in the estate that arent exempt are liquidated to make repayment to creditors; however, most people who file keep all their property. It is important to keep in mind that, even in the unlikely event you have an item of property sold by the trustee, you are still entitled to the amount of the exemption in that item. For example, MA law allows a $7,500 exemption for a vehicle used for personal transportation. Lets say you own a car worth $10,000. Even if the trustee were to sell the car, you would get a check for the $7,500. The sale does not defeat the exemption.
Once the process is complete and the trustee has looked over all your assets, you are discharged of any remaining debts. This means you owe nothing, and you have no corresponding tax liability. In the interim, creditors are no longer allowed to call thanks to the protections of the automatic stay, a federal court order that penalizes creditors who dont respect the bankruptcy process.
There are some debts that are not included in a Chapter 7 bankruptcy. These types of debts cannot be discharged. This means that you will remain responsible for them, even after filing for bankruptcy.
|Exempt, except those that remain subject to claims under support orders||Exempt, with a cap of about $1.28 million on IRAs and Roth IRAs|
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Am I Eligible For Bankruptcy In Massachusetts
Basic qualifications for bankruptcy include a pre-filing credit counseling class and a post-filing credit management class. The credit counseling class is important and mandatory. But, it cannot substitute for a Massachusetts bankruptcy lawyer’s advice.
The credit management class is important as well. Responsibly using credit is the best way to raise your credit score.
Who Qualifies For Chapter 7 Bankruptcy
You must meet certain requirements in order to file for Chapter 7 bankruptcy in Massachusetts. By law, you must pass what is called the means test in order to qualify for Chapter 7 bankruptcy.
The first step in the means test is comparing your average monthly income to the median family income in Massachusetts. If your income is below the states median, you pass the means test, which means you can file for Chapter 7 bankruptcy.
If your income is above the states median, you must move onto the next step in the means test process. This step involves calculating your monthly disposable income. To calculate your disposable income, you will need to subtract certain living expenses from your monthly income. If your disposable income is low after subtracting these expenses, you may qualify for Chapter 7 bankruptcy. Let our attorneys guide you through the means test to figure out if you qualify for this type of bankruptcy. To learn more about this and Chapter 13 bankruptcy, you can head over to our blog post that discusses their differences.
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Can I Get Free Bankruptcy Forms
Yes! All official federal and local bankruptcy forms are available free of charge. You can find the links you need by visiting our bankruptcy forms page.
If you want copies of bankruptcy forms with plain-language instruction and tips for filling them out, you might want to use a good self-help book like How to File for Chapter 7 Bankruptcy or Chapter 13: Keep Your Property and Repay Your Debts Over Time, both published by Nolo.
Massachusetts Law About Bankruptcy
Bankruptcy, Mass.gov;;Mass Dept of Revenue page lists the courthouses in Mass for filing bankruptcy, explains the various types of bankruptcy, and links to the Bankruptcy court below.
Federal Bankruptcy Code:;USC Title 11
- Amended by the Small Business Reorganization Act of 2019, P.L.116-54, effective February 19, 2020, which provides an easier Chapter 11 bankruptcy process for small business debtors.
- Local bankruptcy rules, US Bankruptcy Court, District of Massachusetts
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Why File For Bankruptcy
Most people file for bankruptcy because they ultimately have no other choicethey have a mountain of credit card debt, they have missed too many mortgage payments, or they are facing foreclosure. The only way to stop a foreclosure from moving forward and the only way to eliminate credit card debt is by filing for bankruptcy. While many are concerned about the negative impact of bankruptcy on their credit score, most people who need to file for bankruptcy already have poor credit, and bankruptcy will actually give them a fresh start for rebuilding good credit.
There are also positive consequences associated with filing for bankruptcy. Your discharge in bankruptcy, which I will explain in detail in Chapter 5, is the beginning of your journey to financial rebirth.
Making The Decision: Should You File For Bankruptcy
Bankruptcy Self-Help Resources
For about $30, you can purchase one of Nolo’s books: How to File for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time. Either book will walk you through a self-analysis of your situation and explain your options in plain English. These books offer step-by-step discussions of Chapter 7 and Chapter 13 bankruptcy, including exempt property, keeping your home, and how to prepare and file your bankruptcy forms. They also alert you to situations that are particularly troublesome and should not be handled without an attorney.
This website supplements the information in Noloâs bankruptcy books by providing quick access to bankruptcy services and information for your county.
Getting Professional Help
If you just need help with preparing the forms, you can hire a bankruptcy petition preparer. If you want legal advice and analysis of the details of your specific situation, you can hire a Massachusetts bankruptcy lawyer to advise you. You’ll find listings in the Lawyers section of this site. These listings are not endorsements. They are simply designed to help you quickly connect with service providers in your area.
Whether you decide to do it yourself or hire professional help, our goal is to help you become a smarter, better-informed legal consumer and help you steer clear of shoddy services.
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What Are Bankruptcy Exemptions
Every state has laws that designate certain types of property that are off-limits to unsecured creditorsâthat is, creditors that don’t have a lien on your property. Credit card debt and medical bills are the two most common types of unsecured debt.
Unsecured creditors cannot force you to sell your exempt property to pay off your debt. Even if the creditor goes to court, wins a court judgment against you, and takes steps to attach a lien to your property, you are still entitled to your exemption amount before the creditor gets any proceeds form a sale.
If you sell your exempt property voluntarily, the creditor has a right to have its lien paid from the sale proceeds before you receive anything. As a practical matter, most of the property of people who file for Chapter 7 bankruptcy is exempt, so they don’t want to sell what they have. If all of your property is protected by exemption laws, you are said to be “judgment proof”âmeaning that creditors can’t collect anything from you, whether or not you file for bankruptcy.
One important thing to remember is that an exemption protects only the “equity” in your property. That’s the difference between the value of the property and what you owe to creditorsâlike your mortgage lenderâwho have a secured interest in it.
To learn what property is exempt in your state, see the Exemptions section of this website.
Us Trustee Program Extends Telephonic Or Video Section 341 Meetings
The U.S. Trustee Program has extended the requirement that section 341 meetings be conducted by telephone or video appearance to all cases filed during the period of the Presidentâs âProclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease Outbreakâ issued March 13, 2020, and ending on the date that is 60 days after such declaration terminates. However, the U.S. Trustee may approve a request by a trustee in a particular case to continue the section 341 meeting to an in-person meeting in a manner that complies with local public health guidance, if the U.S. Trustee determines that an in-person examination of the debtor is required to ensure the completeness of the meeting or the protection of estate property. This policy may be revised at the discretion of the Director of the United States Trustee Program.
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Will A Bankruptcy Stop A Creditor From Garnishing My Wages
Yes. With the exception of a wage garnishment for the payment of child support orders, a bankruptcy filing will immediately put a stop to wage garnishments by your creditors. Once a bankruptcy case is filed, the automatic stay prohibits any attempts by your creditors to collect a debt, even if the garnishment has already been ordered in a civil suit.
Your Current Monthly Income
Current monthly income determines your median income. CMI is based on an average of your household income for the six months before filing a bankruptcy case. To calculate your current monthly income, add all income received during the six months before the month you intend to file your Chapter 13 petition and divide the sum by six.;
Household income includes for instance all wages, salaries, and other income, except for income received under the Social Security Act, including SSI and SSDI. Also, most payments to crime victims are not included in CMI. If your spouse is not filing for bankruptcy relief, you must still include your spouses income when calculating CMI. Retirement income and pensions are also included in CMI.
Multiply your CMI by 12 to calculate your median income. Median income determines if you must file a five-year Chapter 13 plan. So if your median income exceeds the Massachusetts median income for a household matching the size of your household, your Chapter 13 plan must be a five-year plan.;
Though if the median income is below the state median income level, you may qualify for a three-year Chapter 13 plan. Although, you can choose to file a five-year plan to lower the monthly payments.;Below is the Chapter 7 Means Test Calculator that considers this information to help make it simpler.
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How Do I Start Bankruptcy In Massachusetts
If you are filing a no-asset Chapter 7, a DIY bankruptcy might be a good idea. These filers cannot usually pay professional fees. They only pay filing fees and other court costs. Most bankruptcy forms are available here.
If you have assets and want to keep them in a Chapter 7, however, you probably need a bankruptcy lawyer. An attorney quickly and accurately completes all the complex forms. Furthermore, only a lawyer can give you legal advice and represent you at the confirmation hearing and other court hearings. The additional investment can pay off.
Find Out If You Qualify For Bankruptcy
To qualify for Chapter 7 bankruptcy, you must show that you donât have enough income to repay your creditors a reasonable amount. You can do this by:
- proving that your income is below the Massachusetts median income for your household size, or
- comparing your income to expenses under a complex formula called the bankruptcy means test to show that you canât pay.
If your income is above the median income for your state and family size and the means test shows you have enough disposable income to make reasonable payments to your creditors, you may still qualify to file under Chapter 13. To qualify for chapter 13, your debt must be under the limit set by the bankruptcy code and you must be current on your tax filings for the last four years.
To take the means test, you can use our free means test calculator.
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Where Do I File For Bankruptcy In Beverly Ma
Where to file your bankruptcy case depends on where you live and on whether you have a business close to home. Usually, you’ll file in the federal district court closest to where you’ve lived for the past 180 days . But if you run a business in a different district and most of your property is located there, you may have to file in the federal court serving that location.
The reason behind these filing rules is that the bankruptcy court wants the person overseeing your caseâcalled the bankruptcy trusteeâto be able to easily find, evaluate, and, if necessary, sell your property.
If you’ve moved recently, you may have to file at the bankruptcy court serving the county where you used to live. That will depend on where the greater portion of your property has been for most of the past 180 days. For example, if you lived in Oregon for most of your life, but moved to California a month ago, you’ll file in Oregon because you lived there for 150 of the past 180 days.
You can handle most interactions with the court, including filing your bankruptcy forms, by mail. However, you will need to visit the courthouse in person at least once, for a meeting with the bankruptcy trustee.