Bankruptcy in Massachusetts is not unlike bankruptcy in most other
states. In general bankruptcy can be handled through an attorney or
through a do-it-yourself service. Do-it-yourself services were easy in
the past, but now since the United States government has changed the
bankruptcy laws in recent years, bankruptcy is much more complicated
then it ever was before.
Consulting an attorney is often advisable because if a bankruptcy
petition is filed incorrectly without the required information, the
petition may be thrown out. Individuals may file for bankruptcy as a
sole person or in a joint filing with as a husband and a wife.
Massachusetts offers different kinds of bankruptcy for different
situations. Some of these include those for individuals with serious
debt problem, individuals with moderate debt problems, corporations
with debt problems, and family-owned farms with debt problem.
Chapter Thirteen Bankruptcy
Chapter Thirteen bankruptcy is for individuals with moderate debt
issues and who can pay a minimum of one hundred sixty dollars towards
their debts a month. This kind of bankruptcy allows individuals to pay
creditors with their own personal income. Chapter Thirteen bankruptcy
is most advisable in most states as it calls for less drastic measures.
Upon petition granting, a personal payment plan will be set up for each
individual circumstance. Certain circumstances will be taken into
consideration before a plan is placed, including the overall income of
the household, the number of people residing in the household, and the
amount of debt to be handled. The payment plan will allow individuals
the opportunity to make designated monthly payments for a maximum of
five years to eliminate all debts. A plan can be set up for three years
but no plan by law can exceed five years.
Chapter Seven Bankruptcy
Chapter Seven bankruptcy is for individuals with severe debt issues and
who can pay a minimum of one hundred dollars towards their debts a
month. This kind of bankruptcy allows individuals the ability to halt
foreclosure within a few months. Chapter Seven bankruptcy is a way for
individuals to use their own property to pay creditors.
Once a petition has been granted, a trustee will be assigned to the
case. He or she will determine which kinds of property are to be
liquidated for value sale. Massachusetts has many property exemptions
to what can and what cannot be liquidated in Chapter Seven bankruptcy.
Individuals also have the right to choose the federal exemptions
statutes instead of choosing the Massachusetts statutes for property
The compensation acquired through the sales will then be used to pay
creditors, after the trustee has received his or her required payment.
This entire process can take anywhere from three months to six months.
Chapter Seven bankruptcy is not as advisable as Chapter Thirteen
bankruptcy, in most cases.
Property exemptions are broken into different asset categories.
Massachusetts categories include homestead assets, personal property
assets, insurance assets, miscellaneous assets, pension assets, public
benefits assets, tools of the trade assets, and wild card assets. Each
of these categories is broken into dollar amounts and necessities.