Massachusetts Bankruptcies were Down in 2012
According to reports, Massachusetts’s consumers filed 18% fewer bankruptcies in 2012; with 19,744 in 2011 and 16,107 in 2012. For Chapter 7 bankruptcies, there were 14,964 in 2011; in 2012 filings went down to 11,964. Chapter 7 personal bankruptcies accounted for about three quarters of the bankruptcies in 2012. 
Chapter 13 reorganization bankruptcies were down 17% and Chapter 11 business bankruptcies were down 29%. From the perspective of a bankruptcy lawyer, this is excellent news because it indicates that the economy is improving and fewer families need a “fresh start” which the bankruptcy law affords.
In the United States, the trend is the same: there were 781,000 in 2011 and 627,000, comparing the first half of each year. It seems that folks are saving more, borrowing less, and that the real estate “crisis” has been largely moved through the system. For example, according to the Federal Reserve Bank, debt payments by households were reduced from 14% of discretionary spending to 11%.
Bankruptcy Lawyer says not Too Late to File for Bankruptcy?
Many consumers call us and ask if the laws have changed and if it’s too late to file for bankruptcy. The new 2005 bankruptcy law did make it more difficult for consumers, in general, to file for a discharge of their consumer debt. One significant change was the means test
which requires bankruptcy filers to fall within the “means” of Massachusetts income. This should not be a deterrent, however. First of all, most folks, given their family income and family size, are exempt from the means test. Second, we can work with you to be sure that you particular situation satisfies the means test.
There were other changes, but none serious enough to prevent most consumers with minimal assets and considerable debt to consider filing for bankruptcy protection. Consumers should also be reminded that Massachusetts now has a generous homestead law which we recently wrote about in our bankruptcy blog.
Bankruptcy Lawyer says Not Hard to get a Bankruptcy Discharge in 2013?
Not hard. Once you qualify under the income requirements, and you have minimal assets, you need only show that your debt is too high to pay with your budget. While you cannot discharge student debts easily, or recent taxes, you can discharge credit card debt, personal loans, repossessed motor vehicle overages, and medical bills.
Creditor lawsuits are “stayed” or stopped, by federal law, once you file for bankruptcy protection. Many of our clients come to us after a creditor, or two, has filed suit, or, worse, received a judgment and are now attempting to collect on that judgment. They are concerned that their homes will be attached and their paychecks garnished. They are right to be concerned. With a bankruptcy, however, we cannot only get the lawsuit and collection efforts stayed, we can get the lawsuits and collections efforts stopped: a bankruptcy discharges the debt! It’s gone.
So, while it may be somewhat harder to get a bankruptcy discharge than it was before the 2005 law kicked in, it’s an amazing law that protects consumers and their families. You can protect your home, your retirement accounts, your vehicle and your personal possessions.
I have been filing bankruptcies for folks since 1985. If you have a question please call us for a free consultation: 617-227-7423
