Bankruptcy Is a Major Decision

In Massachusetts, the filing fee is $299.00 for individual, joint or business petitions under Chapter 7 and $274.00 for Chapter 13.

Chapter 7's are usually very fast as court will schedule a creditor's meeting for approximately 30 days after the bankruptcy petition has been filed. This meeting is generally the only "court" appearance you will have to make. In approximately 120 days you will receive your discharge and the final decree a few weeks later. Chapter 13's and 11's take longer. Your attorney can give you a rough estimate of the time involved and fill in the details.

In Massachusetts, if you own your own home and it serves as your principle residence, you may be able to protect it against the claims of creditors and/or a forced sale by filing a Declaration of Homestead. Speak with a qualified bankruptcy attorney in Massachusetts to determine whether this is an option for you should you choose to file bankruptcy.

There are pros and cons as well as many, many complexities that vary case by case. Take the time to consult an experienced, caring bankruptcy lawyer whose office isn't a bankruptcy factory whose clients are processed without regard to their individual needs.

A recent Massachusetts bankruptcy court case has ruled against "attorney fee only" Chapter 13 bankruptcy plans. Now, as a Missouri bankruptcy attorney, I am always following the court activities of other states because it might have an influence on how bankruptcy law in Missouri works. You see, law isn't set in stone--it actually evolves and changes with every case, judgment, and holding. So, here is what this new Massachusetts ruling says.

The case in Massachusetts banned a practice which involved attorneys who filed Chapter 13 bankruptcies for the purpose of paying attorney's fees through the chapter 13 payment plan.

Why did this situation arise in the first place? These attorneys had their clients file Chapter 13 bankruptcies so they could try to pay their fees over a long amount of time because the clients didn't have enough money to pay the Chapter 7 fees upfront. The Judge ruled that filing a Chapter 13 for the sole purpose of paying attorneys fees was not in "good faith" if the client was better suited for a Chapter 7.

Wait, let's back track. What's the difference between a Chapter 7 and Chapter 13 bankruptcy? A Chapter 7 gets rid of "unsecured" debt allowing debtors to eliminate credit card debt, medical bills, payday loans and other unsecured debts. While you can get certain exemptions, a Chapter 7 bankruptcy is meant for those who mostly have debt and very little assets.

What does that mean? Nothing other than that a bankruptcy lawyer is experienced and proves her experience in multiple publications online and off.

Each individual bankruptcy case needs to be evaluated to decide if a Chapter 13 or chapter 7 is the best choice, and a good bankruptcy lawyer will tell you why. The best bankruptcy attorneys will make sure to recommend whichever one is best for you--not for their own pocketbook.

So here's what you need to know about attorney fee only Chapter 13 payment plans: they are probably not in your best interest if you are better off filing a Chapter 7.