Chapter 7 bankruptcy, sometimes known as a straight bankruptcy, is a liquidation proceeding. The debtor relinquishes all non-exempt assets to the bankruptcy trustee who then converts it to money for distribution to the collectors. The consumer receives a release of all dischargeable financial obligations typically within four months. In the majority of instances the debtor has no property that he would lose so Chapter 7 will offer that individual a relatively fast “fresh start”.
One of the main purposes of Bankruptcy Law is to give somebody, who is hopelessly mired with debt, a fresh start by clearing out their debt.
Individuals who file for chapter 7 bankruptcy will have to agree to attend credit counseling. After filing chapter 7 bankruptcy, it can be tough to get credit for a few years, and you will not be able to file for bankruptcy again for a set amount of time.
It has become more challenging to file for chapter 7 bankruptcy in the United states, thanks to laws and regulations which significantly stiffened the bankruptcy rules in the early 2000s. It is recommended that you speak with a bankruptcy attorney and an accountant before investing in a personal bankruptcy filing, because despite the fact that the professional charges for the consultation may be high, there might be an alternative that has not been considered. A professional consultation can also smooth the way to move ahead with bankruptcy filings, if a consumer decides to carry on with bankruptcy proceedings.
What Is Chapter 13 Bankruptcy?
Chapter 13 Bankruptcy is commonly recognized as a reorganization bankruptcy. Chapter 13 bankruptcy is filed by consumers who would like to repay their financial obligations over a time period of three to five years. This kind of bankruptcy is of interest to individuals who have non-exempt property that they want to retain. It is also only an alternative for people who have predictable earnings and whose income is acceptable to pay their reasonable expenses with some amount left over to pay off their debt.
In the fall of 2009 the American Bankruptcy Institute (ABI) reported that more than 140,000 people in the United States filed bankruptcy in October, a 27.9% increase from the October 2008 filings (“just” 106,266 consumer bankruptcy filings occurred in October 2008).
If you feel you are struggling financially and your family will become one of the stories behind those statistics, an experienced and compassionate bankruptcy attorney can help you navigate the complicated bankruptcy process and help you keep as many assets — such as your home — if possible.
If you find yourself in need of competent and compassionate help by a bankruptcy lawyer, you needn’t feel shame. Many people are finding they need to file bankruptcy in these tough economic times. It is every common in these economic climate that the filing of your bankruptcy petition is through NO FAULT of your own. Many times the debt is related to medical bills, illness or stolen identity.
One couple fell into bankruptcy when the wife went on disability for a few months following back surgery, while the man had to take some time off from work for knee surgery (so that his knee wouldn’t give out and he could continue working.). both are back at work (and the husband is working two jobs), but their health bills far exceed their income. A quote from the story speaks volumes:
“I tell my wife that we beat the economy,” [the husband said]. “But health care beat us.”
A qualified bankruptcy attorney can help you decide if you should file Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is the most common of bankruptcy filings. Once you have filed for protection with the Court, your creditors are required by law to stop all collection activity against you. No more telephone calls demanding payment, lawsuits, wage garnishments and best of all, no more debts! In general a Chapter 7 Bankruptcy will wipe out most of you debts, stop wage garnishments; repossessions and harassment which will allow you to control your financial future have peace of mind and get a fresh start.
A bankruptcy lawyer will also help you determine if filing a bankruptcy under Chapter 13 would be better for your situation. Often called a “debt repayment” or “reorganization” bankruptcy. Chapter 13 is a repayment plan for individuals and businesses with regular income that allows them to pay back all or some of their debts within 3 to 5 years.
Regardless, as you contemplate filing bankruptcy, be sure to find a good and experienced attorney from the many excellent bankruptcy attorneys available.
If you feel that bankruptcy might be an option that you would like to explore please contact Attorney Matthew T. Desrochers at 781-279-1822
BostonAREIA is a group of like-minded real estate investors, entrepreneurs and professionals, coming together to discuss and share deals, investing techniques, contacts, methods, financing, strategies, education, motivation, training, mentoring and success.
Because we believe strongly in the power of networking, we join with other groups in the New England area to keep lines of communication and educational opportunities open for all members.
f you are planning to file bankruptcy, Massachusetts Bankruptcy lawyers can help you to have the best possible results.
Although it sometimes gets a bad name, bankruptcy exists to protect individuals as well as businesses who have had the unexpected happen. A Massachusetts bankruptcy attorney understands the laws and will fight to get the best possible settlement for you to protect your assets.
Individuals may file bankruptcy for any number of reasons. Sometimes the filing may be brought on because of a loss of a job, medical bills or just poor planning. By filing for bankruptcy, you can protect your home from debtors placing liens on the property and prevent wage garnishment. While you may need to enter into a repayment schedule, eventually, in three to five years, you can have the debts all satisfied.
With businesses, filing bankruptcy can help to keep debtors away while you rebuild a business after a difficult time. The protection may be what is needed to get your business back on track and allow you to start to see a profit made by the money you have already invested in that business.
Bankruptcy may have serious consequences to your credit and ability to borrow money in the future. It may limit your ability to buy a home. The mark remains on your credit report for up to ten years, so you will want to discuss these effects with the attorney before filing for bankruptcy.
Bankruptcy is no one’s first choice. However, if you find yourself in a situation where there seems to be no where else to turn, sometimes due to circumstances beyond your control, bankruptcy may be your only option. Consult with Massachusetts bankruptcy lawyer, Matthew Desrochers, who can help you through the process of bankruptcy. Call him today for a free consultation at (857) 244-1940. He can often help you to preserve more assets than if you had tried to file bankruptcy for yourself.
Current Bankruptcy law prevents debtors/clients from discharging any student loans except in cases of EXTREME hardship. Well things are changing!
Democrats Introduce Legislation to Make Private Student Loans Dischargeable in Bankruptcy
Democratic lawmakers introduced legislation yesterday that would allow private student loan borrowers to once again discharge their private student loans in bankruptcy. Since 2005, private student loans have not been dischargeable in bankruptcy. Before changes were made to the bankruptcy code in 2005, only federal student loans and private loans where substantially all of the funds were provided by a nonprofit institution were non-dischargeable in bankruptcy.
Senators Dick Durbin (D-IL), Sheldon Whitehouse (D-RI) and Al Franken (D-MN) cosponsored the legislation in the Senate and Representatives Steve Cohen (D-TN) and Danny Davis (D-IL) cosponsored the legislation in the House. “People who seek higher education to better their futures should not be dissuaded from doing so by the threat of financial ruin,” said Cohen in a press statement. “The bankruptcy system should work as a safety net that allows people to get the education they want with the assurance that, should their finances come under strain by layoffs, accidents, or other unforeseen life events, they will be protected.”
“One of the great inequities in student aid is the inability for private student loan borrowers to receive the same consumer protections that are provided to countless other types of borrowers,” said NASFAA Interim President Joan Crissman. “We support this legislation and urge lawmakers to do likewise.”
The bills in the House and Senate differ slightly. The House bill would return the bankruptcy law to the language that was in place before 2005, with minor tweaks. The Senate bill would allow all private education loans — including nonprofit loans — to be dischargeable in bankruptcy. Before changes were made to the bankruptcy code in 2005, only government issued or guaranteed student loans and private loans where substantially all of the funds were provided by a nonprofit institution were non-dischargeable in bankruptcy. This protection has been in place since 1978 and was intended to safeguard federal investments in higher education, according to lawmakers.
There are very few types of debts that the bankruptcy law subjects to a different standard, allowing for discharge in only the most extreme circumstances. For example, the bankruptcy code makes it especially difficult for people to escape child support responsibilities, overdue taxes, and criminal fines. Privately issued student loans should not be on that list, according to the lawmakers who introduced the bill.
Keep an eye out for these changes; they may help you get out of debt.
If you are unable to meet your monthly debt repayments, if your credit card statements are simply getting more and more in arrears and your medical bills remain unpaid for months on end, you might have only one alternative: file for bankruptcy. If you live in Massachusetts, contacting bankruptcy lawyer, Matthew Desrochers, is a great first step to understanding your options.
What precisely is meant by bankruptcy? This is a legal term which refers to someone applying to the courts to erase all his debt so he can start from scratch again. If you are therefore in a position to actually pay your debts, your application is unlikely to be successful. Reasons which the bankruptcy court normally accept are large and unexpected medical claims, losing your employment, or marital problems causing financial havoc in your life.
When your lawyer submits your application to be declared bankrupt to the court, they will inform all your creditors about this. A first meeting of creditors will then be arranged, more or less thirty to forty days after the application filing.
During this meeting your lawyer must submit to the court a complete overview of your financial matters. This has to clearly show your monthly expenses and income and also contain a list of everything you own and owe. From there on you can refuse to directly deal with your creditors.
If your application is approved, the terms will be made known to everyone involved. Unfortunately all your assets will form part of the now bankrupt estate. You will therefore not be able to keep anything, except those assets which have been exempted by the court.
To receive a free bankruptcy consultation, contact Matthew Desrochers at (857) 244-1940 or fill out the form on the right.
Historically, state bankruptcy law supplied the property exemptions accessible to those seeking bankruptcy protection. Even so, the personal bankruptcy code now enables states to choose between the federal exemptions offered inside the bankruptcy code or the exemptions offered in state law. In Massachusetts you can choose between using the Federal Bankruptcy Exemptions or the Massachusetts state exemptions. Speaking with a qualified Massachusetts bankruptcy lawyer can help guide you towards the best option for your situation.
Common Bankruptcy Exemptions
A few typical kinds of property that are exempt from personal bankruptcy proceedings include:
Retirement Savings. The bulk of your retirement savings are protected by the personal bankruptcy code including pensions, stock bonus plans, Individual Retirement Accounts (IRAS), 401ks and other employer sponsored retirement plans.
Your Property. This is known as the homestead protection. Federal and state exemption laws let you protect your house from creditors in bankruptcy up with a certain dollar amount of money.
Your Automobile. Personal bankruptcy law recognizes that you have to have a car or truck in order to maintain a job and meet your monetary obligations. For that reason, a bankruptcy exemption exists for your car. The exemption does not permit you to spend money to drive a costly car while not repaying your monetary obligations. The exemption is limited to a specific dollar amount.
Home Products. Bankruptcy law sets an exemption amount for all of your home goods and a maximum amount of money per individual item. Usually, a personal bankruptcy trustee recognizes that there is little value in utilised household products and these items aren’t applied to satisfy debts even if they are cumulatively worth more than the greatest amount. Household goods can include things like pots and pans, bedding and decorative objects.
Personalized Items. Some particular things such as reasonably essential clothing are exempt. Jewelry, up with a specified amount, may possibly also be exempt.
Awards in personal injury cases are typically exempt from bankruptcy proceedings.
Tools of the trade are exempt up to certain dollar amounts established by law. For example, a professional photographer might be able to keep expensive cameras and processing equipment that an amateur photographer would need to sell to be able to satisfy his or her debts.
One of the most commonly cited ways to make loan modification programs more effective is to require banks to write down the principal on loans. This reduces the amount owed by the borrower, which encourages borrowers to stay put and make payments even if they were very deep underwater before. It so reduces banks’ PROFIT; we at the Law Offices of Matthew T. Desrochers are not surprised that it hasn’t caught on as a voluntary measure. Nevertheless, USA Today reported March 29, the Obama administration has announced major changes to its Home Affordable Modification Program, designed to incentivize lenders to write down principal.
Most of the new provisions focus on encouraging principal write-downs, though these are not mandatory. All lenders and loan servicers will now be required to consider writing down principal when they consider how to modify the loan. Those lenders that do reduce principal for first or second mortgages will get higher cash incentives. As an alternative to loan modifications, banks may refinance underwater first and second mortgages through the Federal Housing Administration. The new loans created under such a program can be worth no more than 115% of the home’s value. Finally, the plan responds to the high unemployment rate by requiring lenders to offer a forbearance period of three to six months, during which time the homeowner can be required to pay no more than 31% of monthly income as a mortgage payment.
As LOAN MODIFICATION ATTORNEYS, we like the ideas behind these changes to HAMP. HAMP has been heavily criticized for not helping many homeowners, and some of these changes are a direct response to that criticism. But as USA Today’s FAQ notes, the program’s success continues to depend on serious participation from lenders and loan servicers. That’s bad, because their failure to participate meaningfully is one of the key reasons for HAMP’s ineffectiveness. Banks wanted to be seen as participating, but they didn’t want to actually grant many loan modifications because they were, and largely still are, very averse to further risks. To avoid actually performing most loan modifications, banks would give their clients the runaround, repeatedly lose paperwork or otherwise put up frustrating practical barriers.
Matthew T. Desrochers has spent all of the Massachusetts housing crisis helping clients combat this unfair and dishonest behavior by mortgage lenders and loan servicers. We have represented numerous clients who tried to get a loan workout on their own, but found that the lender was understaffed and overwhelmed, unable to process the application in a timely manner. After months of excuses, repeat applications and delays, these clients come to us for help. We are happy to say that lenders seem to respond better when an experienced LOAN MODIFICATION LAWYER is on the job, possibly because they know they can be sued if we can prove they behaved with negligence or actively breached a contract or a law. We do not always file a lawsuit in loan modification cases, but we absolutely will if we find a violation of our clients’ rights.
If you’re struggling to meet your monthly mortgage payment and you know you need help, you should call Matthew T. Desrochers, Esq. P.C. to learn more about your legal options. For a free consultation, call (857) 244-1940 or fill out the form on the right.
Watch Our Video On Massachusetts Loan Modification:
In today economic climate many people are turning to the U.S. Bankruptcy Code and attorneys for assistance. The Law Offices of Matthew T. Desrochers, P.C. has helped many clients overcome their financial difficulties and WE CAN HELP YOU. When I meet with clients I often have to demystify common misconceptions of bankruptcy.
I have attached several myths and responses to those myths for your review.
Myth #1: It is difficult to file for bankruptcy.
False. The new bankruptcy laws have drastically reduced the time it takes to be discharged from bankruptcy down to an average of nine months. In today’s economic landscape, it is understandable that individuals need to file for bankruptcy in order to start over. A qualified, experienced bankruptcy lawyer can make the process as simple and painless as possible.
Myth #2: You will lose everything you own.
This one of the biggest misnomers deterring people from filing. Bankruptcy laws do vary from state to state, but every state has exemptions that can protect certain assets, such as your house, car, qualified retirement plans, household goods and necessary clothing. You can choose STATE or FEDERAL EXEMPTIONS when you file. The STATE exemptions vary in each state and FEDERAL or nation-wide. Call Attorney Matthew T. Desrochers to discuss your exemptions
Myth #3: You will never get credit again.
Quite the opposite, actually. Before you even get home from the courthouse, your mailbox could be rich with credit cards offers again. The catch is that they will be from subprime lenders charging very high interest rates. In fact, if you have a credit card with no balance at the time you file, you may not have to include it in your list of creditors, since you don’t owe them money. You may even be able to keep the card after the bankruptcy is finished.
Myth #4: If you are married, both spouses have to file.
This one is tricky, but not entirely true. It is very uncommon for one spouse to have a significant amount of debt in their name only. If there are debts that a married couple wants to get discharged in which they are both liable for, they will need to file together. If only one spouse files for bankruptcy, the creditors usually demand the entire payment from the spouse who didn’t file.
Myth #5: You can only file for bankruptcy once.
You can actually file for bankruptcy more than once, but the new bankruptcy laws extended the amount of time in between filings. Chapter 7 bankruptcy can be filed for once every eight years and a Chapter 13 filing once every two years. If you want to file for both on separate occasions, there is a four year wait in between the two filings.
Myth #6: Everyone will know you filed for bankruptcy.
Unless you are a very prominent person or a major corporation and the media gets word, the only people that will know about your filing are your creditors. These days, the amount of people filing is so immense that very few publications have the time, space or inclination to run anyone’s name.
If you are thinking about filing for bankruptcy in Massachusetts; you must look for a bankruptcy lawyers that focus exclusively on bankruptcy law, Matthew T. Desrochers, P.C. Bankruptcy Law. Every day, Matthew T. Desrochers help people save their homes, their cars, and wipe out their debts from $5,000 to $300,000. No other law firm is better qualified to bring you the fastest debt relief, and do it right the first time. For a free consultation, call (857) 244-1940 or fill out the form on the right.
According to this article from Nolo:
The means test was designed to limit the use of Chapter 7 bankruptcy to those who truly can’t pay their debts. It does this by deducting specific monthly expenses from your “current monthly income” (your average income over the six calendar months before you file for bankruptcy) to arrive at your monthly “disposable income.” The higher your disposable income, the more likely you won’t be allowed to use Chapter 7 bankruptcy.
New Median Income Numbers
The new median income is $53,315 for 1 person, $69,204 for 2 people, $82,297 for 3 people, and $99,293 for a family of 4.
