How to File

• 1). Seek credit counseling. Debtors must receive credit counseling from a government-approved agency within 180 days before filing a bankruptcy petition. The debtor must then file a certificate of credit counseling with the petition.
  
  
• 2). Take the means test. To file for Chapter 7 bankruptcy, a debtor must pass the means test. If a debtor’s family income is less than the state median, he can file for Chapter 7 bankruptcy. If a debtor’s family income is more than the state median, he should continue with the means test.
  
  As of 2010, the Census Bureau listed Massachusetts median income as $53,315 for a single earner, $69,204 for a family of two, $82,297 for a family of three and $99,293 for a family of four. Add $7,500 for each family member in excess of four.
  
  
• 3). Calculate monthly disposable income by deducting allowed monthly expenses from monthly income. If the debtor’s monthly disposable income is less than $100, the debtor passes the means test. If the debtor’s monthly disposable income is more than $100, but that amount would not be enough to pay at least 25 percent of the debts over the next five years, the debtor also passes the means test and can file for Chapter 7. Any other outcome means the debtor fails the means test. When a debtor fails the means test, she may need to file for Chapter 13 bankruptcy. In a Chapter 13 case, the debtor repays his debt in a three-to-five-year repayment plan.
  
  
• 4). File Chapter 7 petition in the United States Bankruptcy Court District of Massachusetts Eastern Division with a filing fee of $299. The debtor must also file the names and addresses of all creditors; a statement of current monthly income; schedules of assets and liabilities; a schedule of executor contracts and unexpired leases; schedules of incomes and expenses; a statement of financial affairs; evidence of income within the past 60 days; and most recent filed tax returns.
  
  
• 5). Claim exempt property. When a debtor files Chapter 7 bankruptcy, a bankruptcy trustee will label the debtor’s assets as property of the bankruptcy estate. The debtor no longer possesses that property unless the trustee decides the property is exempt. All other property will be sold to repay the debtor’s creditors.
  
  Massachusetts exempt property includes: $500,000 of property the debtor occupies or plans to occupy; motor vehicle up to $700; furniture up to $3,000; clothing; beds and bedding; heating unit; wages; pensions; public benefits; tools of the trade, boats, nets and fishing tackle of fisherman up to $500; and insurance. Refer to Massachusetts law for a complete list.