Experienced Marlboro Bankruptcy Attorney
What is Consumer Bankruptcy?
The chief purpose of Bankruptcy is to give a person hopelessly burdened with debt the opportunity to wipe out his or her debt and start fresh.
Bankruptcy provides powerful remedies to accomplish this. By filing a bankruptcy petition, you can:
- Stop foreclosure
- Avoid repossession
- Stop lawsuits
- Cancel liens
- Stop wage attachments
- Stop bills
- Stop collection calls
- Stop oppressive collection tactics
- Save your home
- Save your property
- Save your retirement savings
- Discharge burdensome debt
- Start over
Chapter 7 Bankruptcy
A Chapter 7 bankruptcy proceeding wipes out all of a person’s eligible debts. Chapter 7 is a “liquidation” proceeding. In theory, the debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash and distributes the proceeds to the creditors. In the vast majority of cases, however, the debtor is able to claim an exemption to most or all his or her assets, and never actually gives up any property. The debtor receives a “discharge” from the court, eliminating his or her liability to repay those debts. From start to finish, most Chapter 7 bankruptcies are concluded in about four or five months, and never require an appearance in court, so Chapter 7 gives a debtor a relatively quick and easy “fresh start.” Click here for more on Chapter 7.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a repayment plan for consumers who want to pay off some or all of their debts over a period of time, usually three to five years. It is also an option for those who are not eligible for Chapter 7. This type of bankruptcy also appeals to individuals who have non-exempt property that they want to keep, or have debts which are non-dischargeable in Chapter 7 and must continue to pay and want to create a manageable payment plan. It is only an option for individuals who have predictable regular income and whose income is sufficient to pay their reasonable expenses with some amount left over each month to pay off some portion of their debts. Chapter 13 plans are not always required to repay 100% of the debt. Click here for more information on Chapter 13.
Bankruptcy Exemptions – Assets you get to keep.
Each state has a scheme of “exemptions,” or lists of property you can keep in bankruptcy. Massachusetts residents may elect either the Federal exemptions or the Massachusetts state exemptions. Click here to learn more about exemptions. We will help you determine which scheme to elect to exempt most or all of your property.
Relief from Debts
Bankruptcy provides two main forms of relief from your debts and protection from your creditors, in addition to other powerful remedies:
- Automatic Stay. Immediately upon the filing of a bankruptcy petition, a federal court injunction is automatically issued preventing your creditors from making any further attempts to collect. Creditor phone calls, letters, calls to your workplace, and bills all stop. Even foreclosures and repossessions are stopped and state court appearances are canceled until your bankruptcy case is administered. Click here to learn more about the Automatic Stay.
- Discharge. At the conclusion of your bankruptcy case, you are granted a Discharge from the court. This is an order legally dissolving your obligation from your debts. Creditors can thereafter never take any action to collect those debts. Not all debts are dischargeable, however, the vast majority of ordinary consumer debts are. Some examples of debts which may not be discharged are child support, alimony, recent taxes, student loans, criminal fines, and debts incurred by fraud, criminal activity, or by willful or malicious conduct.
The New Bankruptcy Laws
There has been much written about the recent amendments to the bankruptcy laws, especially that it is more difficult to file Chapter 7 bankruptcy. It’s true that there are tougher requirements under the new laws, and it’s also true that many people are required to file under Chapter 13 instead of Chapter 7. However, for most filers, Chapter 7 is still available. There are two main requirements of the new law: (1) Means Testing; and (2) Credit Counseling.
Means Testing. The Means Test is a procedure that determines whether you have “disposable income.” In general, if your income is below the state median average for your household size, you are eligible to file Chapter 7. If your income is above the state average, but you have little disposable income, you may still be eligible to file Chapter 7. Only if your income is above the state median average and you have sufficient disposable income are you required to file Chapter 13. Click here to see the current state median income. Even if your income is above the state median income and you have some disposable income each month, there are many factors that are considered, and you may still be able to file under Chapter 7, especially if you have unique circumstances.
Credit Counseling. Before you file for Bankruptcy, you must complete an approved Credit Counseling briefing. Click here to find an approved course in your area. You can usually complete the briefing online, but there are also agencies which provide live courses in the area, and you can take the course in Spanish, Portugugese and other languages. And, if you don’t have access to a computer, you can take the briefing over the phone. There is a fee from about $20 to $50 for these briefings, depending on how and where you take it. After your bankruptcy is filed, you must also complete a second course, called the Financial Management Course. Most of the same vendors provide this second course also.
Attorney Tremblay recommends DollarBK.org (www.DollarBK.org). If you enter Attorney Code #MT8485, Attorney Tremblay will receive confirmation of your completion of the course and your certificate for filing with the Bankruptcy Court will be transmitted automatically. The cost is $20.
Some links to valuable Bankruptcy information:
11 Ways to get out of debt faster!
Should I use a Credit Counselor?
Chapter 7 Bankruptcy and Chapter 13 Bankruptcy FAQ’s.
The 5 Most Common Questions about Personal Bankruptcy.
Bankruptcy Exemptions – Assets you keep!
Debts that are erased in Chapter 7 bankruptcy.
Debts are are not dichargeable in bankruptcy