Questions about debts or bankruptcy? Call Doug Beaton, a local specialist in American bankruptcy law.

Have you been thinking about filing for bankruptcy, but for one reason or another, don’t really want to do it?

If so, chances are you have done some looking, and bumped into debt-help websites loaded with helpful advice. Typically it goes something like this:

* Take out a consolidation loan. Yes, this means just trading one loan for another. And many people will be tempted to run their credit cards up again. Then they are in a worse spot; they have both credit cards and a consolidation loan to pay off. Bankruptcy on the other hand, would get rid of both, permanently.

* Pay all bills on time for two or more years. This is a wonderful option; it’s just that many people these days don’t have the income to do it.

* Simplify your life by downsizing. More excellent advice from the “experts,” who then probably expect you to live out in the woods. You don’t have to get rid of your property to qualify for bankruptcy. You can file for bankruptcy and keep most or all of your possessions.

* Get a second job. More good advice that ignores what’s going on in the real world. Many people have lost their first job; getting a part-time one won’t begin to replace the income they used to have.

* Get a debt settlement deal with your creditors. One drawback; when they report the settlement to the IRS, they get a deduction and you get a bigger income tax bill. Bankruptcy has no adverse tax consequences for either side.

There is absolutely nothing wrong with filing bankruptcy, keeping your possessions, and not taking on more debt to pay the old debt. If you live in the Andovers, Lawrence, Methuen, or Haverhill or in southern New Hampshire, you don’t need to do foolish things to avoid bankruptcy. You can call me for an appointment anytime in complete confidence.

A typical Chapter 7 bankruptcy filing runs 40 pages or more. (A good reason why it’s a smart idea to hire an attorney to have it done right). But your signature is only needed in two places!

That is because the bankruptcy courts in Massachusetts, as in the rest of the nation, have adopted an electronic filing system. It doesn’t make bankruptcy court a completely paperless office, but it comes close.

The most important paper you may sign (and I’m talking about actually signing a sheet of paper with pen amd ink) is the Declaration of Electronic Filing. In addition to comfirming that you swear everythin in your papers is the truth, and the whole truth, etc., the declaration admits you to the electronic filing fraterity as well.

With a properly filled out declaration on file, the rest of the signing process uses your “electronic signature.” If your name is Mary Smith, your electronic signature is /s/ Mary Smith. Mine is /s/ Douglas J. Beaton. And so on.

This makes bankruptcy a much more streamlined court system than many others (like divorce court or small claims, for example).

Click here for a link where you can see what the Massachusetts bankruptcy court Declaration of Electronic Filing looks like!

By Doug Beaton

“Bankruptcy is not for paupers.” That’s a common way of saying that you need money to file a bankruptcy case, so you don’t want to let yourself get so broke that you can’t even go bankrupt!

The cold hard facts of life is that it costs money to save money through the bankruptcy system. (If you’d like to know how much — and I know you are curious — just click here).

On the other hand, I hate nickle and diming my own clients. So I don’t do it. When you hire me to do your bankruptcy, one of the things that gets included in the deal — no extra charge — is stopping any lawsuits that have been filed against you.

Answering lawsuits and trudging off to court for the endless hearings is one of the worst parts of being in debt. The good news is that once I file a bankruptcy case for you, I take care of making sure lawsuits are stopped in the local courts. And I don’t charge extra for it.

If you live in Haverhill or Georgetown, and you file a bankruptcy with my office, I’ll send a notice of your bankruptcy to the Haverhill District court for free.

If you live in Methuen, Lawrence, Andover or North Andover, and you file a bankruptcy with my office, I’ll send a notice of your bankruptcy to the Lawrence District court for free.

If you live in Plaistow or Atkinson, and you file a bankruptcy with my office, I’ll send a notice of your bankruptcy to the Plaistow District court for free.

If you live in Salem, Windham or Pelham, and you file a bankruptcy with my office, I’ll send a notice of your bankruptcy to the Salem District court for free.

One less thing to worry about on the road back to fiscal sanity!

By Doug Beaton

Generally speaking, in my bankruptcy law practice here on the Massachusetts – New Hampshire line, I advise most people not to touch their 401 (k) and other retirement accounts before filing a bankruptcy case. After all, that money is 100% protected in a bankruptcy filing. If you take it out, you get hit with taxes, plus fines and fees. So why do that?

Some people might have to do it just to pay for the bankruptcy itself. Fine, if you have to do that, then that’s what you have to do! But do try to constrain yourself to just withdrawing the amount needed to pay your attorney and the court’s filing fee.

If you take out a lot more than you need, you might be getting yourself into hot water, as you may not have enough bankruptcy exemptions to cover the excess case (which would mean you would lose it to the bankruptcy trustee, but still have to pay up to the IRS at ther end of the year. Ouch!).

If you use the extra money to pay off some bills, you are creating “preferences” that the bankruptcy trustee can un-do, and you have to answer the common sense question “why are you paying off bills right before a bankruptcy, anyway?????”

If you give the extra money to a relative for safekeeping, you are just inviting a fraud inquiry to an otherwise smooth and easy case.

So the moral of the story is simple: Don’t touch a 401 (k) right before bankruptcy, unless you absolutely have to in order to file the case!

By Doug Beaton