Can You File For Bankruptcy in Massachusetts Without a Lawyer?

Deciding to file for bankruptcy in Massachusetts is an important step with various consequences. Although you may be able to discharge many of your debts, your credit rating will take a substantial hit and you may find it more difficult to obtain future loans or even to find appropriate rental housing.  Also, potential employers can look at the federal records and see if you have filed for bankruptcy.

Filing Bankruptcy In Massachusetts

However, many debtors find themselves drowning in debt with little hope of escape, especially if creditors are filing, or threatening to file, lawsuits against them to seize their bank accounts, place liens on property, or to seize their vehicle or other property.  By filing for bankruptcy protection, any legal actions against you are paused as well as any actions in progress to seize your property. You get a FRESH START, according to the law.  Once your petition has been approved by the trustee and your consumer debts and some taxes are discharged, then these actions are forever barred unless certain complications arise.  Liens on a car or a mortgage on a home, can be reaffirmed.  

So considering this but legal fees are a major concern, then can or should you file for bankruptcy without an attorney?

In theory, you can handle any civil matter on your own but unless your bankruptcy matter is a simple one, then an experienced bankruptcy attorney could be important, and, could save you money.  If the legal fee is a concern, then either call around or inquire of a legal aid organization where an attorney can provide pro bono or free services or contact the local bar association who may be able to refer you to a low-cost bankruptcy attorney.  If you are filing for Chapter 13 protection that requires a reorganization plan, legal fees can be included in the petition. 

There are also paralegal services where a paralegal can help you complete the forms but who are unable to give you any legal advice or to represent you at all.  We don’t know of, or recommend these.   

Legal Requirements Before You Can File

Before you can even file for bankruptcy, you have to meet certain criteria. These are:

  • Your total income must be below the state’s median income level by comparing your household income with the income limits for Massachusetts’ bankruptcy requirements, or else meet another section of the means test to see if you can pay off 25% of your debts within 5 years.
  • You have to take and complete a credit counseling course if filing for Chapter 7 protection within 180 days before you file. 
  • There is a fee for the class but you can file for fee waiver 
  • Submit a certificate of completion of the course with your other bankruptcy documents

Also, be sure that you did not attempt to hide certain property before filing a Chapter 7 petition or transfer that property to someone else so that it will not be included in your petition such a real property.  In Massachusetts, you are entitled to a homestead exemption in equity protection and up to $500,000 if you record a homestead declaration with the registry of deeds.  If you are over 62 or have certain disabilities, you have extended benefits. But if you have a second or vacation home, it is not exempt.  And if you attempt to transfer it to someone else within a certain time before filing, the transaction may be considered a fraudulent conveyance.  Be careful too, that a family member has not put you on a deed or trust to “avoid probate” – that property becomes an asset and has derailed many bankruptcies.  

Also, be aware that many debts are nondischargeable such as:

  • Child support and spousal support
  • Fines for criminal violations
  • Retirement plan loans
  • Judgements or legal actions based on fraudulent or intentional activity by you such as an assault or embezzlement
  • Debts incurred with no intention of repaying the creditor or creditors
  • Certain taxes 
  • Student loans unless you demonstrate a severe financial hardship 

These are just some issues that may arise if you are considering bankruptcy and should be discussed with a bankruptcy attorney. 

Various Forms of Bankruptcy

There are 3 main types of bankruptcy depending on your status and type of debts you have. 

  • Chapter 7—available to individual debtors to eliminate unsecured debt, corporations, and other business entities
  • Chapter 13-available under certain circumstances to individuals who are in arrears on their mortgage, wish to eliminate a second mortgage, reduce a car loan, or are seeking to reduce back taxes that are nondischargeable under Chapter 7
  • Chapter 11—for corporations that wish to remain in operation but need to greatly reduce its obligations under an approved reorganization plan 

If you are filing for yourself or for you and your spouse and your debts are generally unsecured such as credit card bills and medical expenses, then you would choose Chapter 7. You may not need an attorney if you have no real property and possess minimal personal property, no creditor is alleging or may potentially allege fraud against you, and you have not made any recent property transfers.  Again, however, an attorney may save you money be recognizing red flags and assisting with bankruptcy planning.  

Generally, however, most people do not have the time or legal understanding to properly complete the petition, to consider whether a Chapter 7 or a Chapter 13 is more beneficial, and to adequately research the bankruptcy laws, learn the exemptions you are entitled to, and to handle any disputes that creditors may bring at your hearing.

What Can a Bankruptcy Attorney Do?

Bankruptcy can be a very complicated process in many situations, even for individual debtors. By retaining a bankruptcy attorney, you can be assured that bankruptcy is likely the best option for you and that any potential issues can be addressed so that you have the best opportunity for a successful discharge of debts or that others are substantially reduced. 

Other matters your attorney can advise you on are:

  • What debts are dischargeable
  • When you should file
  • If Chapter 13 is more advisable?
  • What property you can retain
  • The tax consequences of filing
  • Handle any allegations of fraud
  • Whether you should continue to pay certain creditors 
  • Represent you at your hearing and all subsequent proceedings if needed 
  • Complete your Petition and Schedules for you
  • Undertake prebankruptcy planning.

Retain the Law Office of Burns and Jain 

Bankruptcy is a serious matter and you can find yourself overwhelmed and even in serious trouble if you fail to do it correctly or attempt to be less than honest with your assets and debt obligations. Schedule a consultation with highly experienced bankruptcy attorney from Burns and Jain by calling (617) 227-6423 for a free consultation.

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