By Dolores Kong
The Boston Globe

Bankruptcy filings rose in Massachusetts for the first
time in three years during the first quarter of 2001,
an indication that both a slowing economy and the
likely passage of more-restrictive bankruptcy laws may
be driving more people to file.

About 4,700 bankruptcy petitions were filed in the
state during the first three months of the year, up
more than 14 percent over the same period a year ago,
according to raw data compiled last week by the US
Bankruptcy Court's Massachusetts district.

By comparison, first-quarter filings fell 11 percent
between 1998 and 1999, and dropped nearly 16 percent
between 1999 and 2000. The numbers are for both
business and personal bankruptcies, but personal cases
make up about 97 percent of filings.

The rush to file is being felt at the court clerk's
counter, at bankruptcy trustee meetings, and at
attorneys' offices around the state.
Dozens of debtors shuffled through US Bankruptcy Court
in Boston last week, five every half-hour: a frail
elderly Malden couple with thousands in medical and
credit card debt, a Jamaica Plain man facing
foreclosure and divorce, a laborer with $18,000 in
dental bills.

"I can't think of anybody who isn't up against it
today," said bankruptcy trustee Gary W. Cruickshank in
reviewing a caseload of petitioners. "There are a lot
of hardship cases."

Boston-area bankruptcy attorneys such as Leonard A.
Frisoli, N. Jacqueline Kirby, and Amy Lipman-White
report a 20 to 30 percent increase in the volume of
calls from potential clients - both from those who
worry they won't be able to file once the Bankruptcy
Reform Act passes as expected, or those who have
recently been laid off.

"People are scared," said Wellesley lawyer Howard S.
Gold, who spent two hours recently trying to talk a
medical student with a lot of debt, but a perfect
credit record, out of filing for bankruptcy. "This is
a guy who obviously had some wits about him, was
responsible, and had made all his payments. But he
felt he had to do it now," in case the bill passed
while he was out of the country attending to a family
crisis, Gold said.

Some lawyers currently have ads running on Boston talk
radio, citing the impending changes as a reason to
file for bankruptcy now.

The creditor-backed bill has passed both houses of
Congress, but differences in the two versions need to
be worked out. With a debate over who should be on the
conference committee, it will be some time before
there is a final version. The legislation would
require more detailed documentation of income, assets,
and liabilities; make it harder for people to erase
debts and force more into a repayment plan; and raise
the priority of credit card debt while lowering that
of child support and alimony.

President Bush, whose biggest presidential campaign
contributor was credit-card issuer MBNA America,
according to federal records, has indicated he will
sign the bill. The law would take effect six months

With the United States increasingly a nation of
debtors, and the more-restrictive legislation about to
pass just as the economy sours, "I think Americans are
. . . right to be frightened," said Harvard law
professor Elizabeth Warren. She has coauthored studies
of bankruptcy, and found that half of those filing
cite medical bills, illness, and death or birth in the
family as factors in their decision.

"Americans are carrying bigger personal debt loads
than ever before, at a time when fewer of them have
health insurance and their jobs are more vulnerable
than they have been at any time in the last two
decades," said Warren, who estimates that 1 out of 76
US families will file for bankruptcy this year.
"That's a prescription for disaster."

Disaster has already struck in the form of a layoff
and an on-the- job injury for Jeffrey Langley, 40, of
Middleborough. A machine operator, he filed for
bankruptcy just over a month ago with the help of
attorneys William Markley and Robert Cabana, whose
offices are in Wakefield and Quincy.

"I was about six to seven months late" with credit
card bills. "I couldn't do it. I had late charges,"
said Langley, who had about $30,000 in credit card
debt that built up as he charged car repairs,
groceries, and other necessities for him, his wife,
and four children.

Since the bankruptcy filing, Langley and his wife, who
also works, have been able to keep their house. The
filing also allowed his credit card bills to be wiped
out. He did have to turn over his motorcycle to
creditors and is expecting his home computer to be
taken away any day. Still, Langley is about to begin a
new job next week, and he is hoping to get a fresh

"We're making the mortgage and we're eating. That's
about it," said Langley, who decided to file for
Chapter 7 - so-called no-asset bankruptcy that
discharges certain debts - independent of the debate
over the Bankruptcy Reform Act.

For Doug, 55, who did not want his last name used, it
was losing a job he held for 26 years, his wife's
treatment for brain tumors, and close to $20,000 in
bills that led to Chapter 7 bankruptcy a little over a
month ago.

"I'm flat broke," said the former security guard for
Stone & Webster, the Boston-based engineering firm
that filed for bankruptcy protection itself last year.
"It's really been hell for us."

He, too, filed for Chapter 7 because of his financial
situation and not the debate over the bill. The job he
has now, driving a truck, pays nearly 40 percent less
than his job at Stone & Webster. "I'm taking a
beating," said Doug, who also filed with the help of
attorneys Markley and Cabana.

For Brenda, 42, another of their clients, who didn't
want her last name used, the crushing debt stems from
$30,000 worth of student loans, counting penalties and
interest, from her undergraduate years at Brown
University and graduate education at Brandeis

A history major, she has never had high-paying jobs
that could wipe out the loans, some of which date back
20 years. At one point, she could not afford the high
rents in the Boston area and lived out of her Ford
Escort station wagon. Paying back her student loans
was the least of her priorities, she said.

Because student loans are considered nondischargeable,
and would continue to be owed under the Bankruptcy
Reform Act, Brenda could only file for a Chapter 13
five-year repayment plan, which she did last summer.
To afford payments that may soon jump to $600 a month,
she is working two full-time jobs, as a computer
operator and a medical writer.

"On the one hand, I'm glad I went to school," she
said. "On the other hand, I feel like I've been put
into a state of indentured servitude."