November 22, 2017
Bankruptcy can be a valuable tool when your financial picture isn’t very rosy, but finding the information you need to can be tough. This article will take care of some of that guesswork. You’ll learn where to find your local Massachusetts bankruptcy court, official bankruptcy forms, Massachusetts means test information, and credit counseling providers. You’ll also learn about protecting property when you file bankruptcy in Massachusetts.
Official Bankruptcy Forms
When you file a bankruptcy case in Massachusetts, you’ll disclose a lot of personal financial data on official bankruptcy forms about your assets, debts, income, expenses, and property transactions.
You can fill out the bankruptcy forms on the U.S. Bankruptcy Court forms website. After your forms are complete, you’ll file all the paperwork and a filing fee or fee waiver with your local bankruptcy court (more below).
Massachusetts Bankruptcy Information
Even though federal law governs bankruptcy filings, specific Massachusetts laws and procedures apply. Here’s a rundown of what you’ll need.
Means Testing and Credit Counseling Information
You’ll find two kinds of information specific to Massachusetts on the U.S. Trustee website: means testing figures and approved credit counseling providers.
- Means testing information. Before filing a Chapter 7 bankruptcy, you’ll need to meet an income qualification called the “means test.” If your family income is lower than the median income for Massachusetts, you qualify. If you’re above the median, the means test will have you subtract pre-set expenses to determine if you qualify. The income charts and expense guidelines are on the U.S. Trustee’s website under “Means Testing Information.” If you’re filing a Chapter 13 bankruptcy, you’ll do a similar calculation to determine your plan payment.
- Financial education providers. Individuals must complete a credit counseling course before filing a bankruptcy case and a debt management course afterward. You can find the approved providers on the U.S. Trustee’s website (select “Credit Counseling & Debtor Education”; scroll down to your bankruptcy district).
Massachusetts Bankruptcy Court Locations
On the Massachusetts Bankruptcy Court website, you’ll find helpful information, including instructions for filing your paperwork and the location that services your zip code, by clicking “Debtor Information” on the far right of the menu bar.
John W. McCormack Courthouse
5 Post Office Square, Ste 1150
Boston, MA 02109-3945
Phone: (617) 748-5300
Fax: (617) 748-5315
Donohue Federal Building
595 Main Street, Room 211
Worcester, MA 01608-2076
Phone: (508) 770-8900
Fax: (508) 770-8975
United States Courthouse
300 State Street
Springfield, MA 01105
Phone: (413) 785-6900
Fax: (413) 781-9477
Massachusetts Bankruptcy Exemptions
Filing for bankruptcy won’t leave you destitute You’ll likely be able to protect (exempt) all or most of your property depending on whether your property is on the Massachusetts list (below) or the federal bankruptcy exemption list. You’ll choose one of the two lists (you can’t mix and match exemptions). Married debtors filing together can each take the full exemption amount in most cases.
Assets you can’t exempt are sold by the Chapter 7 bankruptcy trustee for the benefit of the creditors. Chapter 13 works differently. If you want to keep nonexempt property, you can pay for its value over the course of your three- to five-year Chapter 13 payment plan.
Below is a list of common Massachusetts exemptions; however, you should independently verify the following exemptions or consult with an attorney:
- Cemeteries and burial property. (Mass. Ann. Laws ch. 235, § 34.)
- Displacement benefits. Moving expenses if you must move due to eminent domain. (Mass. Ann. Laws ch. 79, § 6A.)
- Fraternal Benefit Society benefits. (Mass. Ann. Laws ch. 176, § 22.)
- Homestead or residential property. Debtors who file a “Declaration of Homestead” with the Registry of Deeds can exempt up to $500,000; otherwise, the exemption is $125,000. (Mass. Ann. Laws ch. 188, §§ 1-4) Interests of a non-debtor spouse in property held as tenancy by the entirety (an attorney can explain these rights). (11 U.S.C. § 522 (b)(3)(B).)
- Rented residential property. Renters can exempt rent (not to exceed $2,500 per month) for each rental period. (Mass. Ann. Laws ch. 235, § 34.)
- Insurance benefits. $400 per week in disability insurance benefits; healthcare provider self-insurance funds, insurance policies, and annuity contracts payable to the insured’s spouse or dependent. (Mass. Ann. Laws ch. 175, §§ 110A; 175-36B, 119A, 125, 126, 132C, 135; ch. 175, § 15. (In re Sloss, 279 B.R. 6 (Bankr. D. Mass 2002).)
- Motor vehicles. $7,500 in one motor vehicle or $15,000 if owned or substantially used by a person with a disability or over the age of 60. (Mass. Ann. Laws ch. 235, § 34.)
- Partnership property. Specific partnership property is exempt. (Mass. Ann. Laws ch. 235, § 34.)
- Pension and retirement benefits. Retirement benefits, except for benefits subject to claims under support orders. (Mass. Ann. Laws ch. 32, § 19; ch. 168, § § 41 and 44; ch. 170, § 35; ch. 171, § 84; ch. 246, § 28.)
- Personal property. Clothing and beds; $15,000 in household furniture; $1,225 in jewelry; one heating unit; $500 per month for utilities; $500 in books; two cows, 12 sheep, two swine, and four tons of hay; $600 in provisions; military uniforms; a pew in a house of public worship; $300 sewing machine; $2,500 in cash or deposit accounts; $100 shares in a cooperative. (Mass. Ann. Laws ch. 235, § 34; ch. 246, § 28.)
- Public assistance. (Mass. Ann. Laws ch. 118, § 10; ch. 235, § 34.)
- Trade implements. $5,000 in tools, implements, fixtures; $5,000 in stock-in-trade; $1,500 in business-related fishing gear; and military uniforms and arms. (Mass. Ann. Laws ch. 235, § 34.)
- Unemployment compensation. Exempt except for certain support obligations. (Mass. Ann. Laws ch. 151A, § 36.)
- Veterans benefits. (Mass. Ann. Laws ch. 115, § 5.)
- Wages. The greater of 85% of gross earnings or 50 times the Massachusetts minimum hourly wage per week. (Mass. Ann. Laws ch. 115, § 5.)
- Wildcard. $1,000 plus up to $5,000 of any unused exemption amount for automobile, tools of the trade, and household furniture exemptions. (Mass. Ann. Laws. ch. 235, § 34(17).)
- Worker’s compensation. Exempt except for certain state agency and support obligations. (Mass. Ann. Laws ch. 152, § 47.)
Other Massachusetts exemptions exist, and amounts adjust periodically. Be sure you have the most recent figures for Massachusetts by visiting the Massachusetts legislative website.
This overview provides some, but not all, of the necessary information needed in a bankruptcy case. Filing for bankruptcy without a lawyer can be challenging. You’re responsible for familiarizing yourself with the law. Consider purchasing a do-it-yourself book like How to File for Chapter 7 Bankruptcy by Attorney Cara O’Neill and Albin Renauer J.D. to help you make well-informed decisions about your bankruptcy matter.