Chapter 7 Bankruptcy in Massachusetts

Before you decide whether to file for bankruptcy, it is important to develop a good understanding of the advantages and disadvantages of the consumer bankruptcy chapters available to you. You should confer with a skilled and zealous bankruptcy advocate like the Law Office of Marla R. Margolis, LLC. With almost 15 years helping individuals and families file Chapter 7 bankruptcy in Massachusetts, Marla R. Margolis can help you decide whether to file for bankruptcy, under which chapter to file, and how to rebuild your credit and your life as the process draws to a close.

What is Chapter 7 bankruptcy?

In a Chapter 7 bankruptcy, a trustee appointed by the bankruptcy court gathers all of your non-exempt assets, sells them, and uses that money to pay your creditors. Once this process is complete, you receive a discharge—any remaining debt to those creditors is wiped out. Here are a few other things you should know about Chapter 7 bankruptcy:

You get an automatic stay upon filing. As soon as you file for bankruptcy, the court issues an automatic stay to halt creditors from attempting to collect on your debts. They may no longer call you at work or at home, they may not send threatening letters, and any lawsuits filed against you in an attempt to collect on your debt are put on hold.
Not all debts qualify for discharge. People considering Chapter 7 bankruptcy must understand it will not discharge student loans, which are all but impossible to discharge. Nor will Chapter 7 bankruptcy free you from tax debt, domestic support obligations, criminal fines, or civil judgments against you for death or injury resulting from your own intoxication.
You do not have to lose your house or your car. You may be able to reaffirm your mortgage or car payments, and continue making those payments through the bankruptcy process and beyond. Massachusetts has a generous homestead exemption that allows exempting primary residences in which a debtor has $500,000 or less in equity (the value of the property minus any outstanding debts, and the cost of sale and closing).

Do I qualify for Massachusetts Chapter 7 bankruptcy?

In 2005, Congress passed legislation restricting Chapter 7 liquidation bankruptcies to debtors viewed as unable to repay a significant portion of their debt through any type of income, and as not abusing or taking unfair advantage of the bankruptcy system. Recent bankruptcy filings and means testing became the primary determinants of whether you may file a Chapter 7 bankruptcy.

Recent bankruptcies. No persons who received a Chapter 7 discharge or completed a Chapter 13 repayment plan in the past eight years can file for Chapter 7 bankruptcy.
Means test. Designed to force debtors who can pay some of their debt into Chapter 13 bankruptcy, means testing sorts debtors based on monthly income. If your monthly income falls below the median for your state, you can file Chapter 7. If your monthly income lies above the state average, means testing will calculate your presumed net monthly income based on allowable expenses, not your actual monthly net. If your net monthly income is below $100, you may file Chapter 7. Between $100 and $167.67, you and your Chapter 7 attorney in Albuquerque will have to counter a presumption of abuse in order to use Chapter 7. And if your monthly net is above $167.67, you may only file Chapter 13.

Confused? Consult an expert Massachusetts bankruptcy attorney

Serving all of Massachusetts, the Law Office of Marla R. Margolis has been providing Massachusetts families and individuals with detailed, skilled, personalized bankruptcy guidance for almost 15 years. Contact her today, toll-free at (888) 98-MASS-DEBT or by email, to arrange a free initial consultation about how to ease your financial burdens.