*exemptions & Secured Debts
Note that property that is collateral for a purchase-money loan is not protected by exemptions from repossession actions by that lender. Any equity you may own in the property is protected and may give you certain rights against holders of judgment liens and second or third lien holders.
Let’s repeat that first point before we go further: Exemption laws do NOT protect you from losing property if you’ve voluntarily pledged the property as security for a loan and you don’t make the payments.
Example: Unsecured vs Secured Debts
So… for example. If you owe $30,000 to credit card companies, that debt is “unsecured”. There is no collateral attached to it. No matter what they threaten, the credit card company can’t take any of your exempt property. Likewise, most medical bills and lawsuit settlements are “unsecured” debts. If an unsecured creditor bothers to go to court get a judgment against you, they can get the court to attach a “judgment lien” to your property. But if the property is exempt, you typically can ask the bankruptcy court to remove that lien from your property .
Continuing the example … If you were persuaded to pay off your credit cards and other unsecured debts with a lower interest, “secured” loan, say, from a loan consolidation company, you probably pledged your home equity or other property as collateral.
See Chapters 3, 4 and 5 of the How to File for Chapter 7 Bankruptcy for more about this.
Dealing With Your Car Loan
If you own a car that you still owe on, youâll have to let the bank and the court know what you want to do with it one one of your bankruptcy forms.
If you want to surrender the car to the lender and discharge the debt, you donât have to do anything other than stop making your payments. The bank will either file request with the bankruptcy court to ask permission to retake the car, or wait until your discharge is granted before picking it up.
If you want to keep the car, you can either reaffirm the loan or redeem the car. If youâre reaffirming your loan, the bank will send you a reaffirmation agreement after your case is filed. You have to complete and sign the agreement and return it to the bank within 45 days from your 341 meeting. The bank files the signed agreement with the court for approval.
To redeem the vehicle you have to file a motion with the court and, once granted, buy the car from the bank for its current value. This gets you out of having to pay the amount left on the loan, but payment has to be made in one lump sum.
Massachusetts Law About Bankruptcy
Bankruptcy, Mass.gov Mass Dept of Revenue page lists the courthouses in Mass for filing bankruptcy, explains the various types of bankruptcy, and links to the Bankruptcy court below.
Federal Bankruptcy Code: USC Title 11
- Amended by the Small Business Reorganization Act of 2019, P.L.116-54, effective February 19, 2020, which provides an easier Chapter 11 bankruptcy process for small business debtors.
- Local bankruptcy rules, US Bankruptcy Court, District of Massachusetts
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Go To Court To File Your Bankruptcy Forms
Once you enter the doors of your local courthouse, you will be greeted by security guards, who will ask you to pass through a metal detector. Once you pass security, you will go to the clerkâs office and tell the clerk that youâre there to file for bankruptcy. They will take your bankruptcy forms and your filing fee .
Do not submit your bank statements or tax returns to the court. These documents go to the trustee after the case is filed. Check out Step 7 below for more info on that.
While you wait, the clerk will process your case by scanning your forms and uploading them to the courtâs online filing system. This usually takes no more than 15 minutes.
Once done, the clerk will call you back to the front desk and give you:
Your bankruptcy case number
The name of your bankruptcy trustee
The date, time, and location of your meeting with your trustee
At this point, your case has been filed! Congrats! The automatic stay now protects you from all debt collectors. But youâre not home yet – there are other steps you need to complete to get a fresh start under Chapter 7 of the Bankruptcy Code!
How Will Bankruptcy Affect My Credit Score
Many people are reluctant to consider bankruptcy because they fear they will never be able to re-establish credit. It is true that filing for bankruptcy will have an effect on your credit score. It is a negative mark on your credit. That mark will be there for 10 years. However, your credit score is determined by many things, such as the amount of credit used, number of inquiries, late payments and length of time credit has been established. While a bankruptcy will be on your credit report for 10 years, it does not mean that you will not be able to get credit during that period. Most of our clients have told us that after the bankruptcy they were able to re-establish good credit in approximately 1 -2 years. They did this by being careful with their spending, credit use and always making payments on time. Where bankruptcy can have a positive impact on your credit, is that it will eliminate a large amount of debt that has likely been bringing your credit score down for years. You will likely receive credit offers shortly after your bankruptcy discharge has entered. We encourage people to accept one or two of these. The offers will not be great , but if you are careful they will help you to re-establish credit more quickly.
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The Two Kinds Of Bankruptcy Most Consumers Use
This website focuses on the two most common types of bankruptcy filed by individuals: Chapter 7 and Chapter 13. But heres a quick summary of the six types of bankruptcy most commonly filed under the bankruptcy code they get their names from the chapters where they appear in the code.
Chapter 7 Bankruptcy
- Chapter 7 lets individuals wipe out most kinds of debt in just a few months.
- You get to keep certain kinds of propertyfor example, at least some of the equity in your home, your car, clothing, personal items, and property that is essential to your profession. This type of property is called exempt property, and many Chapter 7 filers find that exemptions cover most of what they own.
- If you have nonexempt property, the bankruptcy trustee will sell it to repay your creditors as much as possible.
- To qualify for Chapter 7, you must pass the means test, showing that your income is less than the state median income for your family size.
- Most bankruptcies filed in the U.S. are Chapter 7 bankruptcies.
Chapter 13 Bankruptcy
Where Do I File For Bankruptcy
Most people file for bankruptcy in the federal district court closest to where they live. However, if you run a business in a different district and most of your property is located there, you may have to file in that location.
Also, if you’ve moved in the past six months , you may have to file in the federal district court where you used to live. It all depends on where the greater portion of your property has been for most of the past 180 days.
Wherever you’re required to file, know that you can handle most of your business with the court, including filing your bankruptcy forms, by mail. However, you will need to visit the courthouse in person at least once, for a meeting with the bankruptcy trustee.
For more details, and to find your local court, see our articles on How to File for Bankruptcy.
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Reaffirm Redeem Surrender Ride Through
- Choose to keep the car, and
- reaffirm your personal liability on the debt, via a “reaffirmation agreement with the lender which keeps you responsible for the debt, despite your bankruptcy.
- or redeem the property by paying its current value to the creditor, done and done.
How Do I File For Personal Bankruptcy In Massachusetts
How to File Bankruptcy in Massachusetts for Free
. In this manner, how much does it cost to file for bankruptcy in Massachusetts?
It now costs $306 to file for bankruptcy under chapter 7 and $281 to file for bankruptcy under chapter 13, whether for one person or a married couple. The court may allow you to pay this filing fee in installments if you cannot pay all at once.
Furthermore, how much does it cost to file Chapter 13 in Massachusetts? Bankruptcy Costs
|What you’re paying for|
|Conversion from Chapter 7 to Chapter 13||Free|
|Conversion from Chapter 13 to Chapter 7||$25|
Accordingly, where can I get bankruptcy paperwork?
You can find copies of the official bankruptcy forms on the website of the United States Courts at www.uscourts.gov/forms/bankruptcy–forms. From the website, you can print out blank copies of the forms.
How long does it take for bankruptcy to discharge?
about 60 days
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Massachusetts Bankruptcy Means Test
The Massachusetts means test for bankruptcy is one of the documents everyone filing a Chapter 7 bankruptcy in Massachusetts has to file with the court. The analysis determines whether youâre eligible to file under Chapter 7 of the Bankruptcy Code. It first compares your household income against the income limits in place for Massachusetts bankruptcy cases. Some folks can show that theyâre eligible to file a Chapter 7 case even though they make more than the median by completing the second part of the means test analysis.
Data on Median income levels for Massachusetts
Massachusetts Median Income Standards for Means Test for Cases Filed On or After May 1,2022
How To Claim Bankruptcy In Massachusetts
How To Claim Bankruptcy In Massachusetts. File bankruptcy in massachusetts if you qualify to discharge the debt. Quick answers about bankruptcy in massachusetts on this site, we give you the honest, straightforward answers our firm has been representing consumers and businesses in bankruptcy for more than ten years.
However, it is important to know and use all the available the way a settlement agreement is drafted can make a big difference in how settlement funds will later be. Are due to medical issues. Filing for bankruptcy massachusetts is a serious decision, but the process although lengthy is surprisingly simple. Summary of massachusetts bond claim and notice laws and requirements for private massachusetts projects including free forms, faqs, resources and in massachusetts, only the general contractor is required to receive the claim, however, it may be advisable to send a copy of the claim to the public. A chapter 7 bankruptcy filing in massachusetts costs $299, whereas a chapter 13 bankruptcy filing in massachusetts costs $274.
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Can Filing For Bankruptcy In Massachusetts Erase My Credit Card Debt
To put it simply, your credit card debt can get so large that it prevents you from paying your day-to-day living expenses. In Massachusetts, a Chapter 7 bankruptcy case will usually get rid of your credit card debt, while still protecting your property and most of your other needed possessions.
In most Massachusetts bankruptcy cases, credit card companies will not allow you to keep your credit cards after bankruptcy. There is good news, though since after you file and your bankruptcy is finalized, you can immediately start rebuilding your credit.
After discussing your case details thoroughly with your , you may want to work with your lawyer to exclude some debt from your bankruptcy filing. Possibly a credit card used for work, a financed vehicle, or for certain expenses the filer deems necessary. Most of the things you and your Plymouth bankruptcy attorneys include in your filing will have to be approved by the courts. This decision may depend greatly on the way they are presented and the professional advice and presentation of your credit card debt relief attorney.
Once your credit card company or any other creditor finds out about your bankruptcy, that contract is usually always canceled. The credit card company has no way of enforcing any further monetary obligations. Therefore, they will cancel the entire contract.
Can I Get Credit Cards Or New Credit After Bankruptcy
Again, the simple answer is yes you can. Once your bankruptcy has been finalized, you are essentially opening a new, clean financial slate for yourself and your family. There are things, though, that will be necessary moving forward.
- Make sure your credit report accurately describes your bankruptcy: This may seem like something you dont want to do, but it helps. Your credit report should show a $0 balance for any accounts that have been discharged through bankruptcy. Raise a flag with the credit reporting agency if any of your discharged debts are shown as active and get it corrected.
- Keep paying non-discharged debts on time: Sometimes, most likely not all your debts will or can be discharged by your bankruptcylike in the case of student loans. Make sure you pay the remaining balances on time.
- Avoid credit repair companies: Some companies claim they can remove a bankruptcy from your credit report. This is simply not true. They will most likely take your money and youll get little or nothing in return.
- Get new credit: Securing new credit is one of the biggest hurdles to get over in post-bankruptcy credit repair, but its also one of the most critical steps to rebuilding your credit. Some credit cards approve applicants who have a bankruptcy because they know that by law, you cant declare bankruptcy again for at least another seven years or more.
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Where Do I File For Bankruptcy In Beverly Ma
Where to file your bankruptcy case depends on where you live and on whether you have a business close to home. Usually, youâll file in the federal district court closest to where youâve lived for the past 180 days . But if you run a business in a different district and most of your property is located there, you may have to file in the federal court serving that location.
The reason behind these filing rules is that the bankruptcy court wants the person overseeing your caseÃ¢called the bankruptcy trusteeÃ¢to be able to easily find, evaluate, and, if necessary, sell your property.
If youâve moved recently, you may have to file at the bankruptcy court serving the county where you used to live. That will depend on where the greater portion of your property has been for most of the past 180 days. For example, if you lived in Oregon for most of your life, but moved to California a month ago, youâll file in Oregon because you lived there for 150 of the past 180 days.
You can handle most interactions with the court, including filing your bankruptcy forms, by mail. However, you will need to visit the courthouse in person at least once, for a meeting with the bankruptcy trustee.
Types Of Bankruptcy Filings
Chapter 7: Liquidation
Chapter 7 is designed for individuals and businesses experiencing financial difficulty that do not have the ability to pay their existing debts. Under Chapter 7 a trustee takes possession of all of your property. You may claim certain property as exempt under governing law. A bankruptcy trustee then liquidates all non-exempt property and uses the proceeds to pay your creditors according to a distribution scheme required by the Bankruptcy Code.
The main purpose of filing a Chapter 7 case is to obtain a discharge of your existing debts. A bankruptcy discharge is a court order releasing you from liability for many types of debts. If, however, you are found to have committed certain kinds of improper conduct described in the Bankruptcy Code, your discharge may be denied by the court and the purpose for which you filed the bankruptcy petition will be defeated.
Even if you receive a discharge, there are some debts which are not discharged under the law. These include certain types of taxes, student loans, alimony and child support payments, debts fraudulently incurred, debts for willful and malicious injury to a person or property, and debts arising from a drunk driving charge. Generally speaking, a bankruptcy discharge does not remove liens from your property.
Chapter 11: Reorganization
Chapter 11 is designed for the reorganization of a business. It is also available to individual debtors who exceed the thresholds for Chapter 13 bankruptcies.
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Can I Get Free Bankruptcy Forms
Yes! All official federal and local bankruptcy forms are available free of charge. You can find the links you need by visiting our bankruptcy forms page.
If you want copies of bankruptcy forms with plain-language instruction and tips for filling them out, you might want to use a good self-help book like How to File for Chapter 7 Bankruptcy or Chapter 13: Keep Your Property and Repay Your Debts Over Time, both published by Nolo.