How to File for Bankruptcy in Massachusetts
Filing for bankruptcy can be a daunting process, but understanding the steps involved can make it more manageable. If you're considering filing for bankruptcy in Massachusetts, it's essential to be informed about the procedure and what it entails. Below are the key steps to guide you through the bankruptcy filing process in the Bay State.
1. Assess Your Financial Situation
Before you file for bankruptcy, take a thorough look at your financial situation. Gather all necessary documents, including income statements, tax returns, a list of debts, and details of assets. This will help you understand whether bankruptcy is the right option for you.
2. Determine the Type of Bankruptcy to File
In Massachusetts, individuals typically file for either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 involves liquidating non-exempt assets to pay off debts, while Chapter 13 allows you to create a repayment plan to pay back your creditors over time. Consider consulting with a bankruptcy attorney to determine which type is more suitable for your situation.
3. Complete the Required Credit Counseling
Before filing for bankruptcy, you must complete a credit counseling course from an approved provider. This course will help you explore alternatives to bankruptcy and create a budget plan. Ensure you receive a completion certificate, as you will need to include it with your bankruptcy filing.
4. Prepare and File Bankruptcy Forms
You’ll need to complete several forms, including the bankruptcy petition, schedules of assets and liabilities, and a statement of financial affairs. Massachusetts provides a set of local forms that can be found on the Massachusetts Bankruptcy Court’s website. Make sure all information is accurate and complete to avoid delays.
5. Pay the Filing Fee
Filing for bankruptcy in Massachusetts involves a fee, which varies depending on the chapter you choose. As of now, the fee for Chapter 7 is approximately $335, while Chapter 13 is around $310. If you cannot afford the fee, you may request to have it waived or apply for a payment plan.
6. Submit Your Filing in Court
Once your forms are complete and filed, submit them to the appropriate U.S. Bankruptcy Court in Massachusetts. Upon filing, an automatic stay goes into effect, which stops most creditors from pursuing collection activities against you.
7. Attend the 341 Meeting of Creditors
After your bankruptcy petition is filed, you will be required to attend a 341 Meeting of Creditors. This meeting is held about 20 to 40 days after your filing and allows creditors to question you about your financial situation and the information in your bankruptcy forms. Your attorney (if you have one) will guide you through this process.
8. Complete Financial Management Instruction Course
Before your bankruptcy case can be discharged, you need to complete a financial management course. This course focuses on personal finance and budgeting. Similar to the credit counseling before you filed, you must obtain a certificate of completion to submit to the court.
9. Receive Your Discharge Order
If everything goes smoothly, you will receive a discharge order approximately 60 to 90 days after your 341 meeting. This order eliminates most of your debts, allowing you a fresh start financially. However, some debts, such as student loans and certain tax obligations, may not be discharged.
10. Rebuild Your Credit
After your bankruptcy is discharged, it's important to focus on rebuilding your credit. Start by creating a budget, managing expenses, and possibly applying for a secured credit card to demonstrate responsible credit use. Over time, you can improve your credit score and establish a more stable financial future.
Filing for bankruptcy in Massachusetts may seem overwhelming, but following these steps can simplify the process. Always consider seeking assistance from a qualified bankruptcy attorney to guide you through your specific situation and help you make informed decisions.