Thinking about filing for bankruptcy in Massachusetts? Most bankruptcy procedures (including the filing process) are governed by federal law, such as the requirement that you complete a pre-filing credit counseling course and a post-filing debtor education course. There is some information specific to Massachusetts that you will need to know in order to file for bankruptcy, such as which exemptions you are allowed to use to protect your property. You can find most of this information online. Keep reading to find out how.
(For more articles on the filing process, see Filing for Bankruptcy.)
Within the 180 days before you file a Chapter 7 or Chapter 13 bankruptcy, you must complete a credit counseling course from an agency approved by the U.S. Trustee in Massachusetts. If more than 180 days pass after you receive your credit counseling certificate, you must retake the course. You must also complete a debtor education course before you get your discharge in bankruptcy. (To learn more about this requirement, including the rare exceptions, see Credit Counseling & Debtor Education Requirements in Bankruptcy.)
The Massachusetts bankruptcy exemptions help determine what property you get to keep in Chapter 7 bankruptcy, and play a role in how much you repay unsecured creditors in Chapter 13 bankruptcy. (To learn more, see our Bankruptcy Exemptions area.)
You may choose from either the Massachusetts exemptions or the federal exemptions when you file a bankruptcy in Massachusetts, but you may not mix and match exemptions. You must choose either state or federal exemption. (To learn about the federal exemptions, see The Federal Bankruptcy Exemptions.)
If you file bankruptcy in Massachusetts, you can protect up to $7,500 of equity in a motor vehicle, and up to $15,000 if you are age 60 or over or disabled.
To learn about Massachusetts’ exemptions for your home and car, see The Homestead Exemption in Massachusetts and The Motor Vehicle Exemption in Massachusetts. For a list of other common exemptions in Massachusetts, see Massachusetts Bankruptcy Exemptions.
When you file for Chapter 7 or Chapter 13 bankruptcy, you must complete a bankruptcy petition, several schedules containing detailed information about your finances, and numerous other forms, including one known as the “means test” (for Chapter 7) and a similar form for Chapter 13.
(For a list of the forms you must complete, see The Bankruptcy Forms: Getting Started.)
For more information about each of the official forms, including how to find them, see Completing the Bankruptcy Forms.
To determine whether you qualify for Chapter 7 bankruptcy in Massachusetts, you must compare your household income to the median income for a household of your size. If your income is below the median, you are eligible to file under Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan instead of five years. This is called the means test.
If your income is above the median income in Massachusetts, you may still qualify for Chapter 7, but you’ll have to provide detailed information about your expenses and secured debts in order to find out. Chapter 13 filers must also provide this information.
For information about each of these forms, including how to complete them, see:
Here’s how to find the Massachusetts income figures for the means test:
Massachusetts median income. For a one-person Massachusetts household, the median income is $53,496. For a family of two, the Massachusetts median income is $64,174. You can find figures for other Massachusetts household sizes here.
Example. Martha is single and has one child. Her annual gross income is $55,000. She will pass the means test without having to do further calculations because her income is below $64,174.
Standard deductions. Forms 22A and 22C have a comprehensive list of expenses, including housing, transportation, food, and childcare. You are allowed to list your actual monthly expenses for some of those categories, such as childcare. For others, you input a predetermined amount -- sometimes that figure is standard for the whole country, other times it varies by county or region.
You can find all of the figures for Massachusetts and its 14 counties that you’ll need to complete Forms 22A and 22C on the U.S. Trustee’s website at www.justice.gov/ust. Click on “Bankruptcy Reform” and then “Means Testing Information.”
Example. In Massachusetts, the amount you list on your bankruptcy papers for housing varies by county. If you live in Boston (Suffolk County), your mortgage or rent deduction is $1,786 for a two-person household. If you live in Nantucket, the deduction is $2,508. You can find housing expense standards for each Massachusetts county here.
Some judicial districts and bankruptcy courts require bankruptcy filers to complete additional “local forms.” To find out if your court requires additional forms, contact the bankruptcy filing clerk. Some courts post these forms online on the court’s website. (Below you’ll find a link to Massachusetts' bankruptcy courts.)
Massachusetts has one bankruptcy district, but three bankruptcy divisions: the Eastern Division, Central Division, and Western Division.
The three courts in which you can file your bankruptcy are located in Boston, Springfield, and Worcester. There is also a bankruptcy court in Hyannis; however, the Hyannis court does not accept filings or pleadings. Persons looking to file in Hyannis should file their bankruptcy forms in the Boston court.