Bankruptcy Attorneys Serving Residents of the Boston Area
Deciding whether bankruptcy is right for you and what type of proceeding may provide you with a suitable outcome can be a difficult decision. At Lowney Law, LLC, our bankruptcy lawyers provide legal guidance to individuals throughout the Boston region. We have over 15 years of experience counseling debtors on the Chapter 7 process, among other options. There is no need to go through this stressful time alone. Let Lowney Law, LLC help you take the first step toward a fresh financial start.
The Initial Stages of a Chapter 7 Proceeding
Commonly referred to as “liquidation bankruptcy,” Chapter 7 can be useful for debtors who have large amounts of credit card debt and other unsecured debts. Approximately six months before you file for bankruptcy, you must complete a credit counseling class from an approved agency in Massachusetts. When you are ready to file, you must fill out a set of forms, known as a petition, that provides information about your finances and assets.
To qualify for Chapter 7 in Massachusetts, your household income generally must be below the median income for a household of your size. This is called the means test. If your income is above the median household income, you may still qualify for Chapter 7, but you will need to provide specific information about your finances and secured debts.
After you file for bankruptcy, the bankruptcy court will assign a trustee to your case and schedule a creditors’ meeting. You must be present for this proceeding and be ready to answer certain basic questions about your finances. The trustee will then review your current assets and debts and liquidate your property in order to pay your creditors. In most cases, the trustee is able to discharge nearly all of a debtor’s financial obligations. It is important to note, however, that there are certain debts that cannot be discharged through a Chapter 7 proceeding, including child support, student loans, fraudulent debts, and alimony.
Massachusetts and Federal Exemptions
A key component of a Chapter 7 proceeding is the availability of certain Massachusetts exemptions, which allow you to protect the equity value of certain assets from liquidation. For example, Massachusetts allows a Chapter 7 debtor to protect up to $100,000 in equity of the home in which he or she currently resides. Equity is defined as the difference between the property’s value and the amount that is owed on the loan. For example, if you own a home valued at $150,000 with a loan for $100,000, the home has an equity value of $50,000. Some commonly used Massachusetts exemptions include cemeteries and burial property, displacement benefits, homestead or residential property, motor vehicles, and insurance benefits.
Additionally, the state allows debtors to choose the federal bankruptcy exemption statutes instead of the state exemptions. The federal exemptions afford a different set of available protections for various assets, including a residence, retirement benefits, insurance, and personal property like jewelry and household goods. You cannot mix and match between the two sets of exemptions. Instead, you must choose either the Massachusetts exemptions or the federal exemptions.
If a debtor wishes to keep a particular asset that is not subject to an exemption, the debtor usually must pay the trustee the value of that asset and essentially purchase it from the bankruptcy estate. If the debtor has high-value assets that do not fall under any of the Massachusetts or federal exemptions, the debtor may want to consider choosing a Chapter 13 bankruptcy.
Legal Guidance for Individuals in Boston Reorganizing Their Finances
Determining whether bankruptcy is right for you and which set of exemptions you should choose is a difficult process that may require the advice of a seasoned bankruptcy attorney. Lowney Law, LLC can help Boston residents file under Chapter 7 or Chapter 13, as appropriate for their circumstances. We offer a free initial consultation and aim to make the process affordable by providing our clients with repayment plans. If you are considering filing for bankruptcy, call us now at 617-364-8000 or contact us online to discuss your situation. Many of our clients have come from Hyde Park, Mattapan, Dorchester, Roxbury, West Roxbury, Jamaica Plain, and Roslindale, as well as communities throughout Suffolk County.