What To Know About Bankruptcy In Massachusetts

Bankruptcy in Massachusetts, and what a filing means, might be a subject worthy of study in this day and age, when times are tough everywhere. This includes the Bay State, too. And even though an economy in most circumstances might be going along well, it’s still the case that people may find themselves in rough financial straits for various reasons. In this regard, knowing a bit about bankruptcy could be important.

Changes to federal bankruptcy laws — which govern and oversee individual state bankruptcy filings — occurred in 2005, so understand that certain older processes are now invalid. Congress passed 25 changes to how bankruptcy is handled and each state also has certain exemptions (Massachusetts does), which is important to remember if considering bankruptcy as a last resort option when all other attempts at financial repair have failed.

Bay State residents can expect several different exemptions that revolve around the exclusion of certain property, for the most part. It’s hard to put down exactly when might be the right time to file for bankruptcy, just as there are no definites when it comes to what can be included and what can be excluded from a filing. As was said, there are many different reasons for why people file, with home foreclosure and job loss be two of the biggest ones.

Regardless of the reason for filing, it’s wise to learn what kinds of bankruptcy can be filed for in Massachusetts and the rest of the states. Generally, there are two different kinds: Chapter 7 (sometimes known as liquidation) and Chapter 13 (which is a reorganization and is more familiarly known as “Wage Earner Bankruptcy”). Chapter 7 is the most common and is looked at as a clean slate.

Chapter 7 is the most popular (if that’s the word to use) form of bankruptcy that most people file for when they’re looking for a fresh start or a clean slate. Today, this form of bankruptcy will require a means test and a hearing to determine if the petitioner meets the criteria for Chapter 7. Once it’s approved, all but exempt assets will be sold off and then creditors paid off. Chapter 13 is a reorganization and then a set payment schedule.

Bankruptcy in Massachusetts has its beginning in a preliminary filing that’s accompanied by a statement of financial affairs and then a subsequent hearing to decide on if Chapter 7 will be approved. All Chapter 7 filings involve payment of a $299 fee and this form of bankruptcy is generally the most common form or action taken. It’s usually best to hire an attorney experienced in bankruptcy rather than to attempt to do this on one’s own.

Understanding the prospect of bankruptcy in Massachusetts can be scary. It’s important that you have confidence in your decision making and a qualified bankruptcy law firm MA can help guide you down the right path.

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