Lawrence Massachusetts Bankruptcy Lawyer Explains, What Is a Chapter 7 Bankruptcy?

By Peter Kenny

Lawrence Massachusetts Bankruptcy Lawyer-
Most people are familiar with the word bankruptcy, but many do not know much about Chapter 7 bankruptcy. This article deals with some of the more common issues associated with this particular form of bankruptcy.First of all, Chapter 7 is the most commonly used filing when it comes to bankruptcy. It is sometimes known as liquidation bankruptcy.There can be some exceptions but almost always Chapter 7 is used by individuals and not by business corporations, small companies or partnerships in business. When used by businesses, Chapter 7 ordinarily results in the termination of the business entity and so this form of bankruptcy is usually not used by those entities. Another side note to this is that the complete discharge of debt under Chapter 7 is only available to individual debtors.

Chapter 7 is a liquidation (selling) process in which the non-exempt property that is owned by the person filing is liquidated (sold) for distribution to the creditors. The debtor then receives a discharge of all dischargeable debts.

Generally speaking, those who file for Chapter 7 are in very bad financial conditions, usually with large credit card and other secured and unsecured debt. For the most part, these individuals do not own many assets which can be sold off which means that they have less to lose than some other more affluent individuals. Normally, these people are able to completely eliminate, most or all of their debts.

To be eligible to file for chapter 7 you must not have been granted a Chapter 7 discharge within the last six years or have completed a Chapter 13. You must not have had a bankruptcy filing dismissed for cause within the last six months. There are, of course, many other requirements, far too many to be listed in this article, but these are the most commonly asked about requirements for filing under Chapter 7.

After your bankruptcy is filed, the court will mail a written notice to all the creditors listed in your schedules. Once a creditor or collector has been notified of your filing they must stop all efforts to collect the debt. This is one of the benefits of filing for bankruptcy and can help stop harassment.

Consumers should understand that they may still be responsible for certain debts even after filing for Chapter 7. The following debts are usually not forgiven or discharged: taxes that are owed to state and Federal governments, alimony and child support, those debts that came about because of willful misconduct, liability for injury or death from driving while intoxicated; non-dischargeable debts from a prior bankruptcy, most types of student loans, and those debts that came about through fraud or criminal activities that the person engaged in.

Anyone considering filing for bankruptcy should first seek advice from a bankruptcy attorney. He or she can help you make the best decisions concerning which chapter you should file. They can also give you guidance on the new bankruptcy laws that are now in effect.

Consumers who are close to bankruptcy should also ask for advice from their local advice center in order to get their finances in some sort of order.

Boston Bankruptcy Lawyer contact us today for a fresh start!

A Boston bankruptcy lawyer can explain to you your options to see if bankruptcy is the right answer for you.  A bankruptcy lawyer will be your partner to help you get yourself back on track.

Now, you may feel embarrassed or ashamed about your situation, but trust me, a good bankruptcy lawyer has seen just about every situation and is not there to judge you.   Bankruptcy is something that should be done with the help of an experienced bankruptcy lawyer.  However, it is important to understand that there are many things you can do to help your bankruptcy lawyer that will make the process go much more smoothly which will be discussed in your free consultation with your Boston Bankruptcy Lawyer.

If you decide that filing personal bankruptcy is the best option for you, make sure you look up a Massachusetts bankruptcy lawyer that specializes in personal bankruptcy.If you are unemployed or under employed and finding it nearly impossible to pay your bills each month, see if a Boston bankruptcy lawyer  can help you get back on your feet. If you have questions about filing for bankruptcy in Massachusetts, the best person you can turn to for advice is an affordable and experienced bankruptcy lawyer.

Not surprisingly for those that are inside a monetary rut or around the verge of monetary wreck, coming up with additional money to spend a bankruptcy lawyer might be downright not possible.  Of course, this process has lot to do with funds, which is why you should think about the financial costs involved with it before getting a bankruptcy lawyer.

For many consumers, Bankruptcy provides absolute relief from debt collectors, garnishments, foreclosure and unpaid medical bills.  As a  Massachusetts bankruptcy lawyer, I will walk you through the gauntlet of bankruptcy and see that you have the fresh start you deserve.

Bankruptcy can be faced by anyone, and in order to gain financial freedom and eliminate yourself from debt, you will need the services of a proficient bankruptcy lawyer. We will stop all those harassing calls that you receive from the creditors, the fear of getting trapped beneath your debts will soon extinguished by your bankruptcy. It is evident that in order to file a successful bankruptcy and move forward with rebuilding your financial life, the services of a skilled and reputable personal bankruptcy lawyer is a key ingredient.  Both Chapter 7 bankruptcy lawyers and Chapter 13 bankruptcy lawyers we promise to assist you in every step of the process.

Boston Chapter 7 bankruptcy Lawyer

Chapter Seven, also known as “liquidation” or “straight bankruptcy,” is what many individuals understand as a personal bankruptcy. Chapter Seven or any other type of personal bankruptcy will stop a lawsuit right away and stop creditors from placing a lien on your house or garnishing your hard-earned salary. Both federal and state laws provide exemptions for property or home that you’re permitted to declare as exempt and keep when you file a Chapter 7 individual bankruptcy. For married people declaring bankruptcy , based upon your circumstances it may be more beneficial for you to file a joint Chapter 7 case together with your spouse, or it might be more beneficial to file separately with out your husband or wife.

Usually, not including cases which are terminated or converted, personal debtors get a discharge in more than 99 percent of chapter seven cases. In case your earnings are at or higher the state’s average income level, there are more tests which are utilized to ascertain if you be eligible for a Chapter Seven. Financial obligations from healthcare bills and charge cards are generally regarded as unsecured and therefore are typical factors for a person to file for for Chapter Seven. When you are continuously approaching in need of achieving your monthly bills, it might be time for you to think about talking to a Boston Massachusetts Chapter Seven lawyer about declaring Chapter Seven personal bankruptcy . Student education loans (government and personal), income taxes, penalties, supporting your children, home loans, automobile financing aren’t able to be discharged by filing Chapter Seven personal bankruptcy.

Under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), in order to be qualified to file for personal bankruptcy within Chapter Seven, you have to meet the requirements of the means test. Essentially, this requires you to be earning below your states median income for a family of your size. Examples of unsecured debts are credit card debts, hospital bills, payday loans, study loans etc. Usually, it is the norm to file for a Chapter 7 bankruptcy after exhausting all other repayment options other than bankruptcy. Basically, if your annual income is below the threshold according to the size of your family, then you qualify to file for bankruptcy under Chapter 7. A “fresh start planning session” with attorney Hargrove, bankruptcy attorney , will give you the answers to the questions you have about bankruptcy, chapter 7 or Chapter 13. Many types of unsecured debt are legally discharged by the bankruptcy proceeding, but there are various types of debt that are not discharged in a Chapter 7.

There has been much doom and gloom written about the bankruptcy means test under the new laws and how much more difficult it’s going to be to file Chapter 7.

When you come in for an initial bankruptcy consultation we will determine whether you qualify to have all your debts discharged through bankruptcy under Chapter 7. In most cases, unless a complaint has been filed objecting to the discharge or the debtor has filed a written waiver, the discharge will be granted to a chapter 7 debtor relatively early in the case, that is, 60 to 90 days after the date first set for the meeting of creditors. The bankruptcy law now requires that you attend a credit counseling session prior to filing and a second, budget counseling session, prior to receiving a Chapter 7 discharge. If the debtor’s “current monthly income” (1) is more than the state median, the Bankruptcy Code requires application of a “means test” to determine whether the chapter 7 filing is presumptively abusive. The bankruptcy laws changed in 2005 and one of the main additions to the law was the inclusion of a uniform income standard to determine if someone is eligible for a chapter 7 Bankruptcy. By means of these activities the United States Trustee has attained a regulatory system that most creditor-friendly commentators and Congress have consistently embraced, i.e., a formal Chapter 7 means test. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 clarifies this area of concern by instituting changes to the U.S. Bankruptcy Code that incorporate, among many other reforms, language establishing a bankruptcy means test for Chapter 7 cases. A typical case generally involves people who have fallen behind in their mortgage payments, delinquent with their priority taxes, or have debts that are generally non-dischargeable in a Chapter 7 (student loans, child support arrears, and others). FREE NO OBLIGATION CONSULTATION from a local Boston bankruptcy lawyer and find out what chapter 7 can do for you.

Massachusetts Bankruptcy Law – Understanding Bankruptcy Exemptions

Filing a Bankruptcy Petition Creates a Bankruptcy “Estate”

When a debtor files a bankruptcy petition, an “estate” is automatically created. This estate generally includes all the debtor’s assets at the time the bankruptcy petition is filed. 11 U.S.C. § 541(a). This is also sometimes referred to as the bankruptcy estate.

Why is the Bankruptcy Estate Important?

The reasons for the bankruptcy estate’s importance change depending on the Chapter under which a debtor files for bankruptcy. Most individual debtors will be filing under Chapter 7 or Chapter 13, so this article will focus on those two.

The Bankruptcy Estate and Chapter 7

Chapter 7 of the Bankruptcy Code is titled “liquidation.” This title is descriptive and spot on. When an individual debtor files for bankruptcy under Chapter 7 the “property of the estate” is collected by the bankruptcy trustee and then sold, or “liquidated.” The proceeds from these sales are then distributed to the debtor’s creditors. 11 U.S.C. §§ 704 & 726. Because the debtor loses all property which is included in the bankruptcy estate, the bankruptcy estate is an extremely important concept for individual debtors filing a bankruptcy under Chapter 7.

The Bankruptcy Estate and Chapter 13

When a debtor files for bankruptcy under Chapter 13, they generally retain possession of the property of the estate, but the use and sale of this property is supervised by the Bankruptcy court. 11 U.S.C. 363. Therefore, the property included in the estate restricts the debtor’s ability to use and sale that property.

Property of the estate is extremely important in Chapter 13 for another reason. Under Chapter 13, the value of the property in the estate determines the minimum amount a debtor must offer to pay unsecured creditors. 11 U.S.C. § 1325(a)(4). As such, even if an individual debtor files for bankruptcy under Chapter 13 and retains possession of his or her property, the more property included in the estate means the more money the debtor must offer to pay unsecured creditors.

What is Included in Property of the Estate?

The general rule is that all of an individual debtor’s property becomes property of the estate, with very limited exceptions. 11 U.S.C. § 541. This article will not focus on the various rules affecting what is included in the property of the estate. That is a complex issue that is best afforded its own article. This article will focus on what property an individual debtor is able to exempt from being included in the bankruptcy estate when filing for bankruptcy in Oklahoma.

What is a Bankruptcy Exemption?

The general rule in bankruptcy is all property in which a debtor has an interest when filing a bankruptcy petition becomes property of the estate. However, some property is subject to an “exemption.” When property is subject to an exemption it can be precluded from being considered property of the estate. This means the debtor is allowed to keep property out of the bankruptcy estate, when the property would otherwise be included. Bankruptcy exemptions are only available to individual debtors.

Why is a Bankruptcy Exemption Important?

When property is subject to an exemption, the individual debtor can keep that property from becoming property of the estate. While this is an extremely important concept for an individual debtor no matter which Chapter the case is filed under, the reasons for this importance vary depending on the Chapter.

Bankruptcy Exemptions and Chapter 7

As discussed above, in a Chapter 7 case, all property of the estate is collected by the bankruptcy trustee. The bankruptcy trustee then sells the property of the estate, distributing the proceeds to the debtor’s creditors. The more property an individual debtor can exclude from the estate means the more property the debtor is allowed to keep, while still receiving a discharge of his or her debts. In this way, bankruptcy exemptions can be extremely important to an individual debtor filing under Chapter 7.

Bankruptcy Exemptions and Chapter 13

In a Chapter 13 case, an individual debtor is generally allowed to retain possession of the property of the estate. However, all property of the estate is subject to supervision by the Bankruptcy court, meaning all use or sale of this property must be permitted by the Bankruptcy court. Therefore, the less property included in the estate means the more property the debtor can use and sell without oversight.
Bankruptcy exemptions are also extremely important in Chapter 13 because the value of the property of the estate is used to determine the minimum amount an individual debtor must offer to pay unsecured creditors. When property is excluded from being considered property of the estate, the property’s value won’t be considered when calculating the minimum amount. The more property an individual debtor can exclude from the estate means the less money the debtor must offer to pay unsecured creditors. In this way, bankruptcy exemptions can be just as important in Chapter 13 as they are in Chapter 7.

While this article attempts to provide a general overview of why bankruptcy exemptions are important, this article is no substitute for advice from an Massachusetts bankruptcy attorney. Every debtor’s situation is unique, and most general rules have exceptions which might apply in the debtor’s case. It is in a debtor’s best interest to discuss their situation with a Massachusetts bankruptcy attorney before deciding whether to file for bankruptcy in Oklahoma.

Knowing the Massachusetts Chapter 7 Bankruptcy Timeline

“Once it’s clear that you will have to file chapter 7 bankruptcy, it’s helpful to have a general overview of the chapter 7 time line to understand what is expected of you during each part of the chapter 7 bankruptcy procedure.This article will deal with the basic chapter 7 time line, but it is always important to know that every chapter 7 bankruptcy is different due to each debtor’s specific circumstances and your chapter 7 time line might take less or more time, depending on your situation. The first thing you must do before filing chapter 7 bankruptcy is, within six months of filing your petition, attend a credit counseling class at a government approved credit counseling agency.  The certificate you receive upon completion will be filed as part of your chapter 7 bankruptcy petition.The next step in the chapter 7 time line is to take the means test, which determines you qualify for chapter 7 bankruptcy based on your income.

It’s important to realize that these two steps of the time line are mandatory and without proof of each, your chapter 7 bankruptcy petition will not be accepted by the court. The next step in the chapter 7 time line is preparing your chapter 7 bankruptcy petition by filling out all the necessary forms and supplying the supporting documentation. You and your chapter 7 bankruptcy law will submit your petition to the court, and a trustee will be appointed to oversee your chapter 7 bankruptcy.The following step in the chapter 7 time line is fourteen days later, when all your creditors  will receive official notification from the court that you have filed chapter 7 bankruptcy. At this point in the chapter 7 time line, the automatic stay goes into effect and your creditors may no longer conduct any collection actions against you.

The meeting of creditors, where creditors may object to your chapter 7 bankruptcy, is the next step in the chapter 7 time line.If all goes well, the trustee will continue liquidating your non-exempt assets between day 20 and 30 in the chapter 7 time line.You will be reaching the final part of the chapter 7 time line by day 90, when all creditors must have filed their claims on unsecured debts in your chapter 7 bankruptcy.The final part of the chapter 7 time line is between day 60 and day 90, when you will finally receive your official discharge from the bankruptcy judge.