Boston Lawyers Guiding Individuals through Bankruptcy Proceedings
After deciding that filing for bankruptcy may be right for you, the next step is determining which type of proceeding may be appropriate. At Lowney Law, LLC, our bankruptcy attorneys have over 15 years of experience helping Boston residents file for Chapter 13 or explore other options. We can help alleviate the stress associated with reorganizing your finances as we guide you and your family toward a new financial beginning.
Repayment Plan Under Chapter 13
Chapter 13 bankruptcy is frequently referred to as “reorganization bankruptcy.” In this type of proceeding, a debtor establishes a repayment plan that is based on his or her future income. The repayment plan typically lasts between three and five years. If you are able to stick to the repayment plan for the entire duration, any remaining dischargeable debt will be released at the end of the plan. The amount of debt that you must repay over the course of the repayment plan is determined according to several factors, including the debtor’s disposable income, which is calculated according to the Massachusetts means test. This test compares your currently monthly income with the average median income for a household of a similar size.
Additionally, the amount repaid over the course of the repayment plan must be at least as much as the creditors would have received if the debtor had chosen a Chapter 7 bankruptcy. Other factors that are considered include whether the debtor has a regular source of income and whether the debtor has some amount of disposable income to apply toward the payment schedule established by the repayment plan.
Chapter 13 Bankruptcy Exemptions
The role of exemptions in a Chapter 13 proceeding is to determine how much the debtor must repay creditors through the repayment plan. Debtors who choose this type of bankruptcy typically have higher values of equity in their secured assets than Chapter 7 debtors. Chapter 13 proceedings can provide greater protection for those high-value assets than Chapter 7 proceedings, in which the assets would likely be subject to liquidation. Massachusetts bankruptcy law provides several exemptions to debtors, including exemptions for homestead, personal property, insurance, and public benefits like unemployment compensation. If you and your spouse are filing jointly in Massachusetts, each spouse may use his or her own set of exemptions, which is referred to as “doubling.”
The state also allows debtors to forgo its exemptions and utilize the federal exemptions. You may not mix and match, but you must choose either set of exemptions in their entirety. One way to determine whether the Massachusetts or federal exemptions are better for you is to make a list of all of your assets and their value. Next, compare what property you would be able to keep under each system. The amount of value that you may exempt in certain property varies between the Massachusetts and federal exemptions, so it is important to know how much your assets are worth before you choose.
Consult a Boston Attorney When Reorganizing Your Finances
If you are considering filing for Chapter 13 or Chapter 7 in the Boston area, the bankruptcy lawyers at Lowney Law, LLC can guide you through every step of the process, including determining which set of exemptions are right for you and your assets. We offer a free initial consultation and provide payment plans designed to help you get the legal advice you need at an affordable rate. Call us now at 617-364-8000 or contact us online to set up an appointment to discuss your financial future. We have represented many people from Hyde Park, Jamaica Plain, Roxbury, West Roxbury, Mattapan, Dorchester, and Roslindale, as well as communities throughout Suffolk County.