I've recently been involved with updating a few Nexus 4 and Nexus 5 phones to Lollipop. These are OTA updates to phones on the Bell Canada network. On 3 of them we've run into problems with Hangouts crashing when it receives a text message. Restarting the phone does not help.
Well, I would say that's just another bug over the Lollipop its has been reported by many users and its the reason why Google Suspended the OTA update of Lollipop over some Asian regions. I would say you need to wait a while for the bug fix to show up !
You can head over to a post of Top Tech News for More information over this one !
On two of the phones it was enough to remove MightyText and reinstall it. On the other we had to go into Settings -> Mobile Networks -> Network Operators -> Choose Automatically.