How much does filing for bankruptcy cost?
Generally, to hire a Massachusetts attorney to file a chapter 7 bankruptcy, you can expect to pay between $1000-$2000. For a Chapter 13 bankruptcy filing in Massachusetts, costs generally range between $1700-$3500. Please note that bankruptcy fees paid to an attorney, specifically for Chapter 13 can be higher if the case is very complex or becomes complex due to an unforeseen change in circumstances.
Are there other fees (besides the cost to hire an attorney) associated with bankruptcy?
Yes. There are court filing fees and costs which are generally not included in any quote to file bankruptcy offered by an attorney. Additionally, if your case becomes complex and additional work is required by your attorney such as court appearances for a hearing or motion, those fees are typically paid for by the client.
How can I pay for bankruptcy if I am already struggling with my debt?
When filing under Chapter 13 for bankruptcy in Massachusetts, it is typical for the majority of the costs associated with the case other than court filing fees and costs to be paid for through the repayment plan. If filing under Chapter 7 for bankruptcy in Massachusetts, a client will generally have to pay the full attorney’s costs prior to engaging that attorney although some attorneys do allow payment plans for filing Chapter 7.
Will I lose my home if I file bankruptcy in Massachusetts?
This answer to this question depends on a number of variables unique to each bankruptcy petitioner. If you are completely debt free in home ownership, meaning you have 100% or a large amount of equity because you owe little to nothing to a mortgage holder, you could actually lose your home if that portion of equity has not been protected by a homestead filing, or if the automatic homestead exemption in Massachusetts does not cover that equity. For this reason, an attorney will evaluate your position with respect to equity in your home, how current you are with your mortgage payments, and other factors to determine which bankruptcy chapter would be most beneficial.
Should I file a homestead exemption now to avoid any trouble in the future?
Although a homestead exemption may not be necessary depending upon your specific circumstances, the answer to this question may be yes. Having a homestead exemption cannot count against you under any reasonable circumstances, and an attorney can assist you with completion of this documentation to receive the statutory maximum allowable equity exemption in your home.
If I have gone on a vacation, made large purchases, or spent a large sum of money recently, is it still alright to file for bankruptcy in Massachusetts?
The Bankruptcy Court in Massachusetts can provide severe financial and even criminal penalties for bankruptcy filers who are perceived to have committed fraud in some manner. For this reason, it is absolutely imperative that you discuss with an attorney any and all transactions recently made. The Bankruptcy Court is a resource for debtors who have gotten into financial trouble for a variety of reasons, abuse of the purpose of the Bankruptcy Court is a serious issue that the court will not abide.
Can I file bankruptcy in Massachusetts without an attorney?
Yes. You may file bankruptcy in Massachusetts pro se, which means “in one’s own behalf.” While pro se bankruptcy representation is possible, it is not advisable because bankruptcy is a very complex endeavor. As a pro se bankruptcy petitioner, you will have to decide whether to use the state or federal exemption scheme, which chapter to file, how to assess irregularities in how creditors respond, and know how to successfully file motions and even open a civil case where appropriate to resolve difficulties. While it is possible that an individual without legal training or with legal training without specific bankruptcy knowledge can successfully process a bankruptcy petition and handle any resulting issues, it is equally possible that major stumbling blocks may impede a successful outcome.
Will my credit be damaged by filing for bankruptcy?
Generally, a person considering bankruptcy already has significant credit issues prior to filing for bankruptcy due to late or nonexistent payments to creditors, liens or judgments affixed to property or person, or other issues. While filing for bankruptcy does remain on your credit for a period of time, the process of rebuilding credit can begin very soon after a discharge in chapter 7 or a filing in chapter 13.
Is there a social stigma with filing for bankruptcy?
While there is certainly a serious concern from a potential creditor’s point of view with a recent bankruptcy filer, as time goes on this concern generally lessens and may even be explained by the filing of a letter of explanation with the credit bureaus. In general, as time passes, the initial negative effect of filing for bankruptcy generally lessens.
Further, over the years there has been a gradual reduction in the negative implications to a business or an individual choosing to file for bankruptcy. Today, many famous and even successful people and businesses have filed for bankruptcy in Massachusetts…some even multiple times.
What about retirement accounts, are these considered assets that might be liquidated to pay off my debt if I file for bankruptcy?
As a general matter, most retirement accounts are spared from consideration by a bankruptcy trustee as assets which may be used to payoff debt. This means, as a practical matter, that most retirement accounts will not be included in the bankruptcy…you will likely not lose them.
Will money I owe for taxes be removed as my obligation if I file for bankruptcy?
While there are some exceptions, generally money owed in taxes of various kinds will still remain an obligation of the debtor.
Will money I owe for alimony or child support be removed as my obligation if I file for bankruptcy?
No. You will still owe any money currently owed for court-ordered alimony or child support.
Learn more about bankruptcy in Massachusetts, about the different chapters, what debt is exempt and what debt is not, and other important issues:
Bankruptcy and Credit
Is Bankruptcy the Best Choice for a Massachusetts Resident?
Property Exempt in Bankruptcy
Before Filing For Bankruptcy – Foreclosure Basics
Chapter 13 Explained
Chapter 7 Explained
How Debt is Handled in Bankruptcy in Massachusetts
Will I lose my Car When I File for Bankruptcy?
Consolidate Debt or Declare Bankruptcy in Massachusetts?
DISCLAIMER:
The information provided in the pages and posts of this website are for general informational purposes only. The information presented on this site is not legal advice, and no attorney-client relationship is formed by the use of this site.
