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Bankruptcy Attorneys Can Help with Chapter 7 or Chapter 13 Bankruptcy

If you are considering filing for bankruptcy and live in Massachusetts, you need to know the difference between Chapter 7 bankruptcy and Chapter 13 bankruptcy. These are the two main types of personal bankruptcy but each have their own set of rules and stipulations that are paramount in choosing the right one for your own personal needs.

  • Chapter 7 Bankruptcy. This type of bankruptcy filing is known as straight bankruptcy. What it involves is a liquidation of your assets that are not considered exempt. Exempt property can be tools for work, automobiles and some household furnishings. You can file for Chapter 7 bankruptcy once every six years and some of your property may be sold or given to your creditors. You must also qualify for this type of bankruptcy since only those that cannot afford to pay on their debts are considered. If you can afford to pay some of your debtors then you have to choose the Chapter 13 status instead. Also keep in mind that some debts cannot be discharged. Some examples include back taxes and student loans.
  • Chapter 13 Bankruptcy. This type of bankruptcy is a little different. You receive a payment plan through the court as long as you have a steady income. You are allowed to keep your property that might otherwise be sold; this can include your home and automobiles. Once you have made the court approved payments, your debt is settled. This one is more of a debt consolidation as opposed to a Chapter 7 bankruptcy, which is a total liquidation of assets that are nonexempt.

Since both require the help of bankruptcy attorneys simply contact us in order to research the right information and choose the most experienced and appropriate lawyer in Massachusetts.

Lien stripping in Massachusetts bankruptcy?

Additional  Information:

My house in Plymouth county is currently worth about $355,000 and I have a first mortgage of over $400k. I also have a secured home equity line of credit in the amount of $36,000. Can I strip the second mortgage lien off my house and so reduce the amount I will have to pay back?

ATTORNEY ANSWER:

“Stripping a lien” is a mechanism that the Bankruptcy Code provides to remove liens that are attached to your residence.  In Chapter 7, the Bankruptcy Code allows you to strip off most judgment liens (the liens a creditor attaches to your house after getting a judgment against you in court).  In Chapter 13, you can strip off judgment liens, but you can also strip off a second (or third) mortgage if the value of the property is less than the amount of the first mortgage.  [Read more…]

Can I file bankruptcy in MA for my sick mother with a power of attorney?

Additional Information:

My mother is incapacitated and can’t make decisions for herself because of her dementia. Can I help her file bankruptcy by using a power of attorney that she signed two years ago appointing me has her agent?

ATTORNEY ANSWER:

You should discuss the situation in detail with a competent Massachusetts bankruptcy attorney, but you may want to consider looking in to a conservatorship.  Depending on the language of the power or attorney, how much power was granted to you by the document and whether it is a durable power of attorney or not, you may be able to use the POA to help with a Chapter 7 Bankruptcy.  Check to see if the power or attorney specifically grants the attorney in fact the power to file bankruptcy on behalf of the principal.  I would check with an experienced bankruptcy attorney before taking that route, however.  There is no doubt, however, that a person appointed as another’s conservator can use that power to help file for bankruptcy protection.  When you think about it, your mother will, in all likelihood, need much more help in the future with her finances and all other aspects of her life so a guardianship and/or conservatorship may make sense for other issues she will face as well.  [Read more…]

Inheritance after I file bankruptcy in Massachusetts?

Additional Information:

I stand to inherit my Aunt’s house in Brookline and I’d like to know if I have to amend my bankruptcy paperwork and tell them about the inheritance?

ATTORNEY ANSWER:

The general rule is that an inheritance will not become part of the bankruptcy estate IF the deceased did not pass until 181 days after the filing.  Or, put the other way, if your aunt passes within 180 days of your bankruptcy filing, you must take steps to alter your paperwork and notify the trustee. [Read more…]

Fraudulent Transfer before bankruptcy?

Additional Information:

I had always intended on transferring all or part of my Newton home to my only daughter as sort of an estate planning thing but I never got around to it. I am now filing for bankruptcy and do not want to make matters worse.

ATTORNEY ANSWER:

You should definitely not make any transfers of real property prior to filing bankruptcy without first talking to an experience attorney. The problem is that, regardless of what you were thinking about doing, if you transfer the home within a year of filing your bankruptcy petition that will certainly raise red flags.  [Read more…]

Can I still use my credit card although I will be filing for bankruptcy within a month?

ATTORNEY ANSWER:

The answer is basically: NO.  The bankruptcy code allows credit card companies to challenge a discharge of debts incurred just prior to filing for bankruptcy, if the debtor: (1) used the credit card to buy luxury items within three months of the  bankruptcy; or (2) used the card for any reason while having no reasonable expectation of repaying the debt.  [Read more…]

Discharge personal injury damage awards in bankruptcy?

Additional Information:

I was involved in a car accident and got sued and owe over $10,000 in damages. I’m going to file bankruptcy very soon and I’m wondering if I can discharge the damages from that lawsuit?

ATTORNEY ANSWER:

While most types of debts, including judgments are dischargeable, there are exceptions depending on whether you plan to file Chapter 7 or Chapter 13.  Chapter 13 allows you to discharge more “types” of debts than in Chapter 7.

For example, in Chapter 7 Section 523(a)(6) of the Bankruptcy Code prevents the discharge of debts “for willful and malicious injury by the debtor to another entity or to the property of another entity”.  So, while debts resulting from a negligent act may be discharged under certain circumstances, debts resulting from an intentional act may not.  Additionally, Section 523(a)(9) of the Bankruptcy Code prohibits the discharge of any debts arising from the “death or personal injury caused by the debtor’s operation of a motor vehicle, vessel, or aircraft if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance.”  Similarly, criminal fines are not dischargeable.  [Read more…]

What else do I need to do to discharge debt in Chapter 13 bankrtupcy?

Additional Information:

I’m about a month away from completing all of my payments under my Chapter 13 repayment plan. I also did the debtor education course already and finished it. When that is done do I have to do anything else to get my discharge of the debts I didn’t have to pay back?

ATTORNEY ANSWER:

The Chapter 13 discharge is not automatic.  You must file a motion with the court.  If you have completed all of your payments under your Chapter 13 plan and attended and completed you debtor education course, you can file a motion with the court for your discharge, known as a “Debtor’s Certified Motion for Discharge and Notice of Deadline to Object.”  As the name of the motion suggests, the filing of the motion starts the clock ticking for any creditor who wishes to object to the entry of an Order granting your discharge. The creditors have 21 days to object.  [Read more…]

What are MA and Federal bankruptcy exemptions?

Additional Information:

I am confused about the difference between the MA and federal bankruptcy exemptions. What are the exemptions and how do I choose?

ATTORNEY ANSWER:

Exemptions exist under federal bankruptcy law and under Massachusetts state law.  Massachusetts is in the minority of jurisdictions where one can elect one or the other type of exemptions, to better protect his or her assets.  In other states, a person filing bankruptcy may only use one type of exemption.  Consulting with a competent Massachusetts bankruptcy attorney is vital to evaluate which exemptions are better for your financial situation. [Read more…]

Are there debt limits for Chapter 13 bankruptcy?

Additional Information:

We have two mortgages on the house and owe a total of $800,000.  The house is currently appraised at around $500,000. The first mortgage is for $550,000. Are there debt limits for a Chapter 13 bankruptcy and will we have too much debt to take advantage of bankruptcy?

ATTORNEY ANSWER:

There are debt limits for a Chapter 13 filing, but they may not apply to you.   The current maximum debt limits for an individual Chapter 13 debtor are $360,475.00 for unsecured debts and $1,081,400.00 in secured debts.  In some cases, a second or third mortgage that is totally “underwater” (a mortgage is totally underwater when the first mortgage holder is owed more than the property is worth) may be deemed to be unsecured.  So, if you add your second mortgage to your other unsecured debt and the total is over $360,475.00, then it’s possible you may be ineligible for a Chapter 13 bankruptcy.   These limits are subject to annual cost of living increases and may change depending on the timing of your case filing.  Additionally, if you are filing a joint Chapter 13 case, the limits may double depending on the circumstances.  In any event, you should consult with a competent Massachusetts bankruptcy attorney and develop an effective strategy to assist you in restructuring your financial affairs.  [Read more…]

What happens if you do not disclose all assets in bankruptcy?

Additional Information:

Can one go to jail for failing to disclose assets or is it more likely that a person would be fined?

ATTORNEY ANSWER:

The simple answer is YES.  When you file for bankruptcy you are submitting information and documentation under oath.  The Bankruptcy Code requires truth and accuracy regarding your financial affairs, so failing to properly disclose assets (and liabilities) is a crime.  Even if you are not criminally prosecuted, your case could be dismissed, leaving you in a world of trouble with the creditors circling.  You are not the first person to consider this option, bankruptcy trustees (and your creditors) have the training and, in many cases, the experience to sniff out non-disclosed assets.  Rather than playing games, I recommend you talk to a qualified Massachusetts bankruptcy attorney, someone who can devise an effective strategy for you to deal with your debts and get your life back on track.   [Read more…]

Do I need an attorney to file bankruptcy in Massachusetts?

You can file bankruptcy in Massachusetts without the assistance of a lawyer.  To ensure that you obtain the debt relief you need and protect your assets to the fullest extent possible, you should retain an experienced bankruptcy attorney. There are many steps and subtle nuances that are required in order to complete the bankruptcy process. If you make a mistake, you may lose significant assets that you hoped to keep. For example, if you want to exempt real estate in Massachusetts, you must record a declaration of homestead for the property. If you do not complete this step, your home may not be exempt and may be sold in a bankruptcy. [Read more…]

Can I file Chapter 7 bankruptcy if I earn an hourly wage in Massachusetts?

Credit card companies may want you to believe that. However, most wage earners with serious debt problems are eligible to file Chapter 7 bankruptcy. An experienced Greater Boston bankruptcy lawyer can help you file for Chapter 7 bankruptcy properly, even if other lawyers have said you are ineligible. [Read more…]

Will my credit card use prevent my eligibility to file for bankruptcy?

More information:

I live on Cape Cod and the down economy has taken its toll on my financial state. Most of my debt is credit card debt with three different cards. I want to file chapter 7 bankruptcy but I continue to use one of the cards for essentials. Does that mean I can’t file bankruptcy until I wait a certain amount of time?

Bankruptcy Attorney Answer:

You can file for bankruptcy protection, but it is possible that some of your more recent credit card debt may be deemed non-dischargeable, meaning you will still have to pay it back. The bankruptcy code says that non-essential credit card debt to any one card company that equals or is greater than $500 and was incurred within 90 days of your bankruptcy filing is presumed to be non-dischargeable.  Also, credit card debt of ANY amount and incurred at ANY time may, in theory, be deemed non-dischargeable if the card company can show that you knew or should have known that you would have been unable to pay it back.  An experienced bankruptcy lawyer can help you effectively navigate the Chapter 7 bankruptcy process. [Read more…]

What is a denial of discharge when filing for bankrutpcy?

More information: I am working with my Boston bankruptcy attorney and have seen several references to “denial of discharge”. Does this just mean that the debt needs to be paid?

Bankruptcy Attorney Answer:

Generally speaking, in Massachusetts a denial of discharge means the debtor will remain liable for repaying the full amount of ALL of his debts.  A Bankruptcy Court can deny your discharge as a response to certain bad behaviors on your part, such as if you (the debtor) fail to take the required financial management course, make false statements under oath, conceal property that should have been part of the bankruptcy estate, or fail to obey a lawful order of the court.

In the instance of a specific debt, denial of discharge can mean that specific debt needs to be paid. For example, the bankruptcy court may notify you that your student loans are not dischargeable.  In that case, your bankruptcy case will move forward and all of your other debts may still be discharged.  Hiring an experienced Boston bankruptcy attorney is the prudent course of action filing bankruptcy. [Read more…]

Will I lose all my property if I file bankruptcy?

Upon filing a Chapter 7 bankruptcy, the bankruptcy trustee can take possession of your non-exempt property and sell it to pay your creditors. However, there are many types of property that are exempt. Many people who file Chapter 7 bankruptcy have lost nothing other than their debts. [Read more…]

Default on Chapter 13 bankruptcy plan?

More information:

I live and own a business in Cambridge, Massachusetts. I filed chapter 13 bankruptcy almost a year ago and am now making payments under a payment plan. Now things aren’t going so well again and I worried I won’t be able to make the payments. So what will happen if a default on my payments under the chapter 13 plan? Are there fines or anything like that?

Bankruptcy Attorney Answer:

A large percentage of debtors drop out of their bankruptcy plan prior to discharge.  If you default on your payments under the bankruptcy plan, the bankruptcy trustee will request that the court dismiss your bankruptcy.  In that case, all of your creditors can resume their efforts to collect the money you owe, in any way allowed by the state of Massachusetts.  Do not default.  Talk to your bankruptcy attorney to see if  they can help you to seek an amendment to your chapter 13 plan.  Bankruptcy courts are more likely to allow amendments when there are dramatic changes in the debtor’s circumstances, such as a lost job.  Your bankruptcy lawyer might have other suggestions as well, such as surrendering a secured debt to reduce the payment. [Read more…]

I am filing bankruptcy in Massachsuetts. What will an automatic stay do for me?

If you file for bankruptcy, an automatic stay will go into effect immediately. This is done to protect people in debt from legal action while they get their finances back in order. An automatic stay will cease most debt-related legal action that is being taken against you. For example, it may temporarily halt utility disconnections, foreclosures, evictions, and wage garnishments. [Read more…]

How do you start the personal bankruptcy process in Massachusetts?

Answer:
Personal bankruptcy is commenced by an individual filing Chapter 7, 11, 12 or 13. The most common is Chapter 7. The debtor is allowed to exempt certain property from liquidation by the trustee. The list of exempt property includes homesteads, household furniture and furnishings, jewelry, clothing, interests in an automobile, tools of the trade, pensions, insurance policies, a “wild-card” or “grubstake” exemption of $15,000.00, and other assets. Individual states are allowed to “opt-out” of the federal exemptions and provide their own lists. Exemptions can thus vary widely from state to state. [Read more…]

What are some reasons for denial of Discharge of Debts?

Answer:
The individual debtor usually is discharged from legal liability for his debts, and receives a “fresh start”. A discharge will be denied for improper activity, including:

  • Transferring property prior to bankruptcy to defraud creditors
  • Failing to list assets or debts
  • Destroying financial records
  • Failing to explain loss of assets
  • Failing to obey court orders
  • Failing to turn over records to the trustee

[Read more…]

What debts will I be responsible for if I file for personal bankruptcy?

Answer:
Certain debts are not wiped out by the filing of bankruptcy, including:

  • Many taxes
  • Alimony, child support and related debts
  • Most educational loans
  • Criminal fines, penalties, and restitution debts
  • Debts incurred as the result of drunk driving
  • Debts arising from fraud, theft and embezzlement
  • Debts for willful and malicious acts
  • Debts which are reaffirmed.

[Read more…]

How does a Massachusetts business file for bankruptcy?

Answer:
Corporate Bankruptcy is the filing of Chapter 7 or Chapter 11 by corporations and partnerships . On the filing of a Chapter 7 petition, the court appoints a trustee. The trustee’s primary duty is to sell the assets of the bankruptcy estate, and then make distributions to creditors. The trustee’s commissions and other administrative expenses are paid first, followed by payment of priority debts (often taxes), and then to general unsecured creditors on a pro rata basis.

In most Chapter 7 cases, the debtor’s business operations either had already ceased as of the filing, or stop once the case is filed. In some cases, to preserve an entity’s “going concern” value, the court permits the trustee to operate the business. In Chapter 11, on the other hand, the business typically remains in operation, with the debtor retaining control as a debtor in possession. The debtor in possession is given the same rights and duties as a trustee. The goal of the Chapter 11 is to reorganize or liquidate its assets through a court-approved plan, approved by its creditors. [Read more…]

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