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
What Are My Alternatives
Our firm will help you gather the information you need to accurately complete the means test. Our firm is also qualified to administer this test; therefore we will be able to determine whether or not you qualify immediately.
If you do qualify for Chapter 7, we will guide you through the filing process and provide the credit counseling you need to get back on track.
If you do not qualify for Chapter 7, we can work with you to develop a repayment plan to present in bankruptcy court. If your income is at a level where you can pay back the debt over time, we can help you explore alternatives to bankruptcy.
Discover the difference a local attorney can make in handling your bankruptcy and debt relief issues. Contact Daigle Law Office today to schedule a free initial consultation to discuss the means test. Our family looks forward to helping your family. Call us at
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
What Chapter Of Bankruptcy Should I File
Consumers typically file under Chapter 13, in which repayment is made to creditors, or under Chapter 7, in which the debts are discharged. Each chapter of bankruptcy spells out:
- What bills can be eliminated
- How long payments can be stretched out
- What possessions you can keep
The type to file depends on your particular circumstances and whether or not you have the assets available to repay all or part of your debts. Bankruptcy laws can be tricky, so these decisions should be made with the input of experienced . Many factors go into deciding what Chapter a person should file. Call 978-632-1633 for a free consultation. During this consultation, Attorney Paul A. LaRoche will personally analyze your financial situation and advise you on how to proceed.
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Alternatives To Filing Bankruptcy In Massachusetts
So if you are not sure whether you want to file for bankruptcy relief, you may want to explore other debt-relief options. There are several non-bankruptcy methods for getting out of debt, including financial management, debt settlement, and debt consolidation. Each method for getting rid of debt however has pros and cons.
You can learn more about debt settlement and compare it to debt management in Ascends Debt Settlement Guide and;Debt Management vs. Debt Settlement article. We also provide answers to common questions about debt settlement in our FAQs about debt settlement.
Therefore, if you have an interest in consolidating your debts, compare debt consolidation to debt settlement to decide which option might be best for your financial situation.
Many people have used our Savvy Debt Payoff app to manage their debts and also pay them off without filing bankruptcy.;
Types Of Bankruptcy Filings
Chapter 7: Liquidation
Chapter 7 is designed for individuals and businesses experiencing financial difficulty that do not have the ability to pay their existing debts. Under Chapter 7 a trustee takes possession of all of your property. You may claim certain property as exempt under governing law. A bankruptcy trustee then liquidates all non-exempt property and uses the proceeds to pay your creditors according to a distribution scheme required by the Bankruptcy Code.
The main purpose of filing a Chapter 7 case is to obtain a discharge of your existing debts. A bankruptcy discharge is a court order releasing you from liability for many types of debts. If, however, you are found to have committed certain kinds of improper conduct described in the Bankruptcy Code, your discharge may be denied by the court and the purpose for which you filed the bankruptcy petition will be defeated.
Even if you receive a discharge, there are some debts which are not discharged under the law. These include certain types of taxes, student loans, alimony and child support payments, debts fraudulently incurred, debts for willful and malicious injury to a person or property, and debts arising from a drunk driving charge. Generally speaking, a bankruptcy discharge does not remove liens from your property.
Chapter 11: Reorganization
Chapter 11 is designed for the reorganization of a business. It is also available to individual debtors who exceed the thresholds for Chapter 13 bankruptcies.
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Massachusetts Bankruptcy Means Test
The Massachusetts means test for bankruptcy is one of the documents everyone filing a Chapter 7 bankruptcy in Massachusetts has to file with the court. The analysis determines whether youâre eligible to file under Chapter 7 of the Bankruptcy Code. It first compares your household income against the income limits in place for Massachusetts bankruptcy cases. Some folks can show that theyâre eligible to file a Chapter 7 case even though they make more than the median by completing the second part of the means test analysis.
Data on Median income levels for Massachusetts
Massachusetts Median Income Standards for Means Test for Cases Filed On or After May 1,2021
Massachusetts Legal Aid Organizations
Legal aid in Massachusetts is available for low income individuals and families in civil matters, including Massachusetts bankruptcy cases. If youâre worried about filing a Chapter 7 bankruptcy in Massachusetts by yourself, you can find links for a number of Massachusetts legal aid organizations as well as pro bono lawyer referral resources on thecourt’s website.
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What Is A 341 Hearing
Everyone who files for bankruptcy must attend a 341 hearing, which is also called a âcreditors meeting.â The meeting is conducted by the bankruptcy trustee assigned to your case. The trustee will put you under oath and may ask you questions about the information youâve provided on your bankruptcy forms. Creditors may also show up at the hearing to ask you questions, but itâs not common for them to do so.
Bankruptcy law also requires the trustee to ask you questions to be sure you understand how bankruptcy works and the potential consequences of filing bankruptcy, such as the effect on your credit record.
For most bankruptcy filers, this will be your only trip to the courthouse . Most court websites post schedules of 341 hearings, and when you file, you will be notified of your hearing date. When you show up for your hearing, you will find that many other people have hearings set for the same day. You will sit and wait for your name to be calledâusually in a room somewhere in the courthouse or federal building, but probably not in a courtroom.
Print Your Bankruptcy Forms And Bring Them To Court
Once you have prepared your bankruptcy forms, you will need to print them out for the court. You must print them single-sided. The court wonât accept double-sided pages.
You will also need to sign the forms once they are printed.
Most bankruptcy courts require just 1 copy of the petition, but some courts like the bankruptcy court in Manhattan require 4 copies. So call your local bankruptcy court to find out how many copies you will need to bring.
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Are You Eligible To Apply For Chapter 13 Bankruptcy
There are specific eligibility requirements to file for Chapter 13 bankruptcy which includes the following:
- You must be employed and have adequate income to cover your new required monthly payments under the plan- this is why Chapter 13 is also known as a wage earners plan.
- The amount of your debt has to be under certain thresholds, which vary from year to year. In 2020, for example, you couldnt have more than $419,275 in unsecured debt and $1,257,850 in secured debt to apply for Chapter 13.
- You cant be behind on filing your taxes- to file for Chapter 13, you will need to prove that you have filed your tax returns for the previous four years.
- You have to be filing as an individual .
- You cant have filed for Chapter 13 in the previous two years or Chapter 7 in the last four years.
The Role Of Debt In Property Division
When dividing property during a divorce, there is often a line drawn on property that was brought into the marriage versus property obtained during the marriage.
While property and debts usually remain with the person who brought them into the marriage, the court may still require the assets to be divided if it has merged into the marriage.; The courts in Massachusetts divide marital property under the doctrine of equitable distribution, which doesnt always mean equal. This means that if a couple jointly incurred debt during their marriage, the court can divide this debt between the two parties; however, it might not be an equal split.; A judge may consider many factors when dividing debt, including whether the debt was used toward the marriage or for some other reason
If a couple is going through a divorce and one party files for bankruptcy, this could bring the divorce to a halt until bankruptcy proceedings are complete. This pause in divorce proceedings would temporarily suspend the couples assets, allowing the bankruptcy court to determine the extent of the debt and the assets that the couple could use to satisfy some of these outstanding payments. If there is a bankruptcy pending, then the plaintiff in the divorce has the burden to seek an order out of the Bankruptcy course asking to allow the divorce to move forward.; If this order is not obtained, the Family Court Judge cannot approve the divorce.
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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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Collect Your Massachusetts Bankruptcy Documents
The first step in the process of filing bankruptcy in Massachusetts is to collect your bankruptcy documents and organize them in a single location. These documents are used in preparing the bankruptcy forms that get submitted to the bankruptcy court.
Start by collecting all the various collection letters you have received in the last three months and getting a copy of your credit report. Together, these documents will allow you to create a complete list of your debts with the most current address available for each one of your creditors.
Since you need to provide the bankruptcy court with an overview of your monthly expenses, pull a few bank statements to help make sure you didn’t miss anything. The bank statements may be needed later on in your Massachusetts bankruptcy case, so don’t close any bank accounts without first getting copies of at least the last 6 months of bank statements, just in case.
Youâll also need your last two federal income tax returns and the last six months of paycheck stubs. There may be other documents thatâll be helpful, so if you come across any real estate appraisals or other valuations, deeds, life insurance policy statements etc. keep them nearby.
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What Are Bankruptcy Exemptions
Every state has laws that designate certain types of propertythat are off-limits to unsecured creditorsÃ¢that is, creditors that donât 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 donât want to sell what they have. If all of your property is protected by exemption laws, you are said to be âjudgment proofâÃ¢meaning that creditors canât collect anything from you, whether or not you file for bankruptcy.
One important thing to remember is that an exemption protects only the âequityâ in your property. Thatâs the difference between the value of the property and what you owe to creditorsÃ¢like your mortgage lenderÃ¢who have a secured interest in it.
To learn what property is exempt in your state, see the Exemptions section of this website.
Do You Want To Live Without Debt We May Have A Solution
Helping you toward a more stable financial future is our goal. If we are able to help you determine that filing for bankruptcy is the key to helping you live without debt, Glenn F. Russell Jr. & Associates P.C. can help you finally move forward with your life! Relief from overwhelming responsibilities to debt could be only a phone call away. We can assess your situation and your personal finances to determine whether or not bankruptcy is a wise option for you and your family.
If you are contemplating declaring Chapter 7 Massachusetts bankruptcy,contact an attorney from our firm. We know how important it is to establish financial stability for you and your family, so consult our firm as soon as possible to get on the road to financial recovery and peace of mind!
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Advantages Of Chapter 13 Bankruptcy
Most people thinking about bankruptcy will choose Chapter 7 if they qualify for it, because Chapter 7 is usually over in just a few months and it totally wipes out most debts. But Chapter 13 may be right for people who are overwhelmed by secured debt because it offers ways to:
- restructure mortgage payments to save a home from foreclosure
- reduce the amount of some secured loans to match the value of the property , and
- reduce certain tax debts that canÃ¢t otherwise be discharged in bankruptcy.
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Qualifying For Chapter 7 Bankruptcy
The first step in the Chapter 7 bankruptcy process, assuming you decide you can no longer afford to pay their debts, is to ensure that you qualify for the relief requested. In 2005, the bankruptcy laws changed so that debtors have to qualify from a financial standpoint in order to file Chapter 7 bankruptcy.
Specifically, you must have a gross income over the previous six-month period prior to filing bankruptcy that is at or below the median income of an equivalent household size. If you meet those basic requirements, you automatically qualify for Chapter 7 and can begin the process.
If you do not meet those basic requirements, you must pass The Means Test. This test gives you a chance to lower your monthly disposable income by allowing for different necessary expenses, as deemed by the court. Some examples of necessary expenses include:
- housing and utility costs
- health insurance
- child care
Lets say that after including those necessary expenses, your disposable income lowers to a level the court deems acceptable. in that case, you will pass the means test and qualify for Chapter 7 bankruptcy.
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The Truth About Bankruptcy Filing In Massachusetts
You will spend upfront close to $350 in filing fees for an attorney in Massachusetts to file bankruptcy on your behalf. You will also have to pay the attorney some amount of money, usually the full amount for filing Chapter 7 which can be anywhere from $1000 to $1500 on average in Massachusetts. If filing for Chapter 13, the fee structure can be written into the repayment plan so that the attorney receives payment for their time at the end of the bankruptcy case.
How Chapter 7 Bankruptcy Works In Massachusetts
For most people, the goal of Chapter 7 bankruptcy is to wipe out as much debt as possible. In legal terms, this is called having your debts Ã¢discharged.Ã¢
In exchange for your bankruptcy discharge, you must be willing to turn over any of your property that is not exempt under bankruptcy law. The bankruptcy trustee in charge of your case will liquidate the property to pay as much as possible to your creditors; thatÃ¢s why Chapter 7 is often called Ã¢liquidation bankruptcy.Ã¢
This article covers:
- debts you owe under a divorce or separation agreement
- fines, penalties, or criminal restitution payments, and
- any debts related fraud youÃ¢ve committed or injuries youÃ¢ve caused.
In addition, you often canÃ¢t discharge debts that are Ã¢securedÃ¢ by a particular piece of property. For example, if you have a car loan, the lender may be able to repossess your car. If you have a home loan and canÃ¢t show that your home is exempt under bankruptcy law, the lender may have the right to foreclose your mortgage.