How To File for for Chapter 7 or Chapter 13 Bankruptcy in Massachusetts:
If you've decided to file for bankruptcy, the following ten steps will guide you from the beginning to the end of the process:
- Learn the Basics of Bankruptcy
- Find Out If You Qualify for Bankruptcy
- Complete a Credit Counseling Class
- Fill Out Bankruptcy Paperwork
- File Your Petition in Bankruptcy Court
- Attend a Creditors Meeting (341 Hearing)
- File Motions, Objections, or Responses
- Complete a “Personal Financial Management” Class
- Get Your Debts Discharged
- Get on With Your Life
Bankruptcy is a legal proceeding created to give people a fresh start after financial disasters. If you've explored your alternatives and can't see a way out from under your debt, bankruptcy may be the right solution for you.
There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13. Chapter 7 can wipe out most of your debts in a matter of months in exchange for giving up all of your property that the bankruptcy law does not protect. (Protected property is called your “exempt” property.)
Chapter 13 takes three to five years. During that time, you repay some or all of your debts under a payment plan approved by the bankruptcy court. It’s often used by people who are behind on mortgage payments and want to use Chapter 13 to catch up. Most folks who file for bankruptcy prefer to file for Chapter 7 if they qualify, because you can get out from under lots of debt in a matter of a few months.
Step 2. Find Out If You Qualify for Bankruptcy
To qualify for Chapter 7 bankruptcy, you must show that you don’t 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 can’t 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.
Step 3. Complete a Credit Counseling Class
Sometime during the six months before you file for bankruptcy, you must complete a mandatory credit counseling session with a government approved credit counseling agency. (If you are filing with your spouse, you must each complete a class.) You can satisfy this requirement in-person, over the phone, or online. It will take about 90 minutes and may cost as little as $0 or as much as $100, depending on your ability to pay. After you take the class, you’ll receive a certificate that you must file with your bankruptcy petition.
Step 4. Fill Out Bankruptcy Paperwork
Filing for bankruptcy requires you to fill in dozens of pages of forms detailing your current debts, assets, income, and expenses, as well as your intentions regarding loans that are secured by collateral, such as a mortgage or vehicle loans.
To get ready, you’ll want to be sure you have complete information about:
- your creditors, including the type of debt and how much you owe
- your income, including sources, amount, and frequency
- your property, including its current value and whether it is classified as exempt under the bankruptcy code, and
- your living expenses, including type, amount, and frequency.
Married folks: You’ll also need this information for your spouse, even if you plan to file alone.
If you’re the diligent, organized type, you can prepare your own bankruptcy forms, but this is one place where you will probably appreciate professional help or at least the guidance of a good step-by-step instruction manual for Chapter 7 or Chapter 13.
To find the forms for your local court, see our bankruptcy forms page for Massachusetts.
Step 5. File Your Petition in Bankruptcy Court
After you’ve got your petition and supporting paperwork in order, you must file it in the correct Massachusetts district court. You can visit our bankruptcy court page for Malden, Massachusetts to find your local court and other important information, like local rules and requirements that you might have to meet when you file.
When you file your petition, you must pay the filing fee by cash or money order, unless you apply for a fee waiver or payment in installments.
Step 6. Attend a Creditors Meeting (341 Hearing)
Several weeks after you file for bankruptcy, you will be required to attend a 341 hearing, which is also called a "creditors meeting." The bankruptcy trustee assigned to your case will lead the meeting and may ask you questions about the information you've provided on your bankruptcy forms. Creditors may also show up at the hearing to ask you questions.
The bankruptcy trustee will tell you exactly what to bring to the meeting, but you should be prepared to bring the following:
- pay stubs
- tax returns for the past few years
- bank statements
- property ownership documents, like deeds and the pink slip for your car, and
- copies of mortgage documents.
The book How to File for Chapter 7 Bankruptcy provides detailed information about what to expect at a 341 hearing.
Step 7. File Motions, Objections, or Responses
You may never need to worry about this, but there’s a chance that you will want to file additional paperwork after you submit your bankruptcy petition. For example, you may want to file a request (called a motion) to remove creditors’ claims (liens) against your property. Or, if a creditor says that you owe more than you think you do, you may want to file an objection with the court.
Depending on the complexity of the situation, this is another place that you might want the advice and assistance of a bankrupcy lawyer. If you’re handling your own case and you want to learn more about the situations that may arise after you file, you can turn to a detailed guidebook like How to File for Chapter 7 Bankruptcy or Chapter 13: Keep Your Property and Repay Your Debts Over Time.
Step 8. Complete a Personal Financial Management Class
No more than 45 days after your creditors meeting, you must complete a debt management course. This is different from the credit counseling class you take before you file. The class costs anywhere from $0 to $75 depending on your ability to pay. If you don’t take the class and submit your certificate of completion on time, the bankruptcy court may dismiss your case.
You must take the class from a court-approved provider. You can find a list of providers here.
Step 9. Get Your Debts Discharged
Whew. After completing the steps to this point and meeting all the requirements of your bankruptcy filing—if you've filed under Chapter 13, this means making all the payments under your agreed upon plan—it's finally time for the court to erase your dischargeable debts.
If you filed for Chapter 7 and your case has been dismissed, you may be allowed at this stage to convert to another form of bankruptcy, like Chapter 13.
Step 10. Get on With Your Life
You’ll undoubtedly be eager to get your life back on track after your bankruptcy filing; we hope you can breathe easier and start to rebuild when your bankruptcy is done. Occasionally, things do pop up after the end of a bankruptcy case that you'll need to deal with, from discovering new non-exempt property to dealing with a creditor that tries to collect a debt discharged in your bankruptcy. (Quick tip: Don’t agree to make payments on a discharged debt! The debt collector may be breaking the law. Get advice before you agree to anything.) If questions come up after your case is over, know that you can get answers.
If you’ve been working with a lawyer during your bankruptcy case, you can ask for additional guidance. You can also find information about dealing with post-bankruptcy issues in How to File for Chapter 7 Bankruptcy or Chapter 13: Keep Your Property and Repay Your Debts Over Time.