Occuring In Massachusetts.

Q: Recently a friend has been served with a summons to appear in civil court in front of a jury for failure to pay a debt. His total debtload exceeds his ability to pay. A small portion of his debt (i.e Student Loans and back taxes) is not dischargable. He is employed but has almost no assest (No House or expensive car etc.) We have called a few lawyers found in the phonebook and have recieved widely varying advice. Everything from you must file Chapter 7 bankruptcy immediatly and it will cost $825 to do nothing and let the court find against you, wait two years and then file bankruptcy. I would be very interested in hearing from anyone who may have some sound advice on this matter. Another question, do bankruptcy laws vary from state to state or are they set by the federal gvernment? If it is a state thing this is occuring in Massachusetts.

A: With the exception of a secured creditor, creditors cannot seize your assets or initiate wage garnishments without filing a lawsuit and obtaining a court judgment. The urgency to file is really determined by how close your are to losing property or have your paycheck garnished. If the care is about to be repossessed or you are about to be evicted, then you may need to file soon. Otherwise, there is no immediate

need. On the other hand, your friend may want the piece of mind that comes with the automatic stay. It stops the creditor phone calls and stops any other type of efforts to collect the debt. But if you friend can live with the phone calls and letters and there is nothing to collect from but a paycheck, while file now? BTW, with all the fancy computer programs, $825 sounds a little high for a unless that includes with filing fee. Before I stopped doing bankruptcy, I charged $500 in attorney's fees plus the $175 filing fee. Bankruptcy is federal law. However, the laws saying how much of your property you can keep after bankruptcy is set by state law.