How to File Bankruptcy in Massachusetts
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 liquidation.
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.