What Are the Eligibility Requirements for Filing Bankruptcy in Massachusetts?
Filing for bankruptcy can provide a fresh financial start for individuals struggling with overwhelming debt. However, it’s essential to understand the eligibility requirements specific to Massachusetts before pursuing this option. Below, we outline the key criteria that determine whether you can file for bankruptcy in this state.
Types of Bankruptcy Available
In Massachusetts, individuals typically file for either Chapter 7 or Chapter 13 bankruptcy. Each type has its own set of eligibility requirements.
Chapter 7 Bankruptcy Eligibility
To qualify for Chapter 7 bankruptcy, you must meet the following criteria:
- Means Test: You must pass the means test, which compares your income to the median income for a household of your size in Massachusetts. If your income is below the median, you may qualify for Chapter 7. If it exceeds the median, you might still qualify after deducting certain allowed expenses.
- Credit Counseling: Prior to filing, you are required to complete a credit counseling course from an approved agency. This course must be taken within the six months before your bankruptcy filing.
- Previous Bankruptcy Discharge: You cannot have received a discharge in a Chapter 7 case within the last eight years. If you previously filed for Chapter 13 and received a discharge, you must wait six years to file Chapter 7.
- Honesty in Filing: You must disclose all assets, debts, income, and expenses accurately in your bankruptcy petition.
Chapter 13 Bankruptcy Eligibility
For Chapter 13 bankruptcy, the requirements differ slightly:
- Regular Income: You must have a regular income to propose a repayment plan for your debts over three to five years.
- Debt Limits: Your unsecured debts must be less than $465,275 and secured debts must be less than $1,395,875 as of April 2023. These limits are periodically adjusted, so it's wise to check for any updates.
- Credit Counseling: Like Chapter 7 filers, those considering Chapter 13 must also complete a credit counseling course before filing.
- Previous Bankruptcy Discharges: If you have received a discharge from a previous Chapter 7 case in the past four years, you are ineligible to file for Chapter 13.
Additional Considerations
It’s also essential to be aware of any non-dischargeable debts that may affect your filing. Certain debts, like child support, alimony, certain taxes, and student loans, typically cannot be eliminated through bankruptcy.
Lastly, all individuals considering bankruptcy in Massachusetts should consult with a qualified bankruptcy attorney. An attorney can guide you through the complexities of the process and ensure that you meet all local requirements.
Understanding these eligibility requirements is vital for making an informed choice about filing for bankruptcy in Massachusetts. Take the time to assess your financial situation and gather necessary documentation, as this will pave the way for a smoother bankruptcy process.