Personal & Business Bankruptcy Attorneys in Springfield MA.
With Over 30 Years Of Experience
Chapter 7 | Chapter 11 | Chapter 13 Reorganization
Financial difficulties can be the result of unexpected job loss, economic downturn, illness, divorce, business dispute, or protracted litigation. First Call Bankruptcy Center Law Office has over 25 years of experience representing individuals and businesses in bankruptcy cases under all Chapters of the Bankruptcy Code, including Chapter 7 liquidations, Chapter 13 wage earner plans, and Chapter 11 business reorganization cases. Working with you, the bankruptcy lawyers at First Call Bankruptcy Center Law Office in Springfield will devise comprehensive workout strategies that help our business and consumer clients handle their debt collection problems, get their lives and their businesses back on track, and get a “Fresh Start.
Chapter 7 Bankruptcy Basics
A Chapter 7 bankruptcy case in Springfield, Massachusetts, does not require the filing of a plan of repayment as in filing a Chapter 13. Instead, the bankruptcy trustee gathers and sells all your nonexempt assets and uses the proceeds of such assets to pay your creditors. Most Chapter 7 cases, however, are “no asset” cases as the debtor’s assets typically have no value over and above any liens (including mortgages) and the debtor’ allowed exemptions (discussed in detail below). In return for this, individuals obtain a Discharge and are relieved from having to repay their debts. Zip codes: 01013, 01020, 01103, 01104, 01105, 01106, 01107, 01108, 01109, 01118, 01119, 01128, 01129, 01151, 01199. Zip code 01013 statistics:
It’s known as a “Fresh Start.” The principles of bankruptcy are rooted in the United States Constitution and were seen by the Founding Fathers as a more suitable alternative to “debtors’ prisons.” Under current federal law, a person may receive a Discharge under Chapter 7 once every 8 years.
The Automatic Stay
The Bankruptcy Court is the only court that can lift the Automatic Stay. If you are a creditor and want the Automatic Stay lifted, you must file a motion with the Bankruptcy Court, and the debtor must be served with notice of the motion. The debtor then has an opportunity to respond to the motion. The Bankruptcy Court will consider the creditor’s arguments and the debtor’s response and decide whether or not to lift the Automatic Stay.
Exempt Assets
Exempt Assets are assets that you are allowed by law to keep once you have gone through the Chapter 7 process in Springfield, MA. The Bankruptcy Code provides the debtor with a choice between electing the federal bankruptcy law exemptions set forth in the Bankruptcy Code or electing the state law exemptions provided for in the state in which the debtor resides.
Under the new Massachusetts Homestead Statute, homeowners are now entitled to an automatic $125,000 exemption on the equity in their homes, including property held in trust. The homestead exemption increases to $500,000 with the filing of a one-page Declaration of Homestead with your local county registry of deeds. Both the federal and state exemptions allow a debtor to claim as exempt all pension and retirement income such as 401K’s and IRAs.
Examples of Exempt Assets Under the Federal Bankruptcy Law:
- $21,625 equity in a residence
- $3,450 equity in any automobile
- $11,535 in Household Furnishings
- $11,975 for any items (including cash) if homestead exemption is not elected
- All Pensions, 401K’s, IRAs
- All Clothing
- $1,450 in Jewelry
Examples of Exempt Assets Under Massachusetts State Law
- Up to $500,000 equity in a residence (under Massachusetts Homestead Exemption)
- All Pensions, 401K’s, IRAs
- $7,500 for Motor Vehicle
- $2,500 in Cash or Savings
- $5,000 in Business Assets
- $15,000 in Household Furnishings
- $6,000 Miscellaneous “Catch-All”
Avoid Judicial Liens/Attachments
Chapter 7 Bankruptcy allows homeowners to avoid or “strip-off” judicial liens such as Attachments and Executions, on their primary residences, to the extent they impair a Federal or Massachusetts Homestead Exemption.
Do I Qualify for Chapter 7?
Under the amendments to the Bankruptcy Code passed by Congress in 2005, a means test was established for qualifying to file under Chapter 7. If your household income is below the median income, you qualify for Chapter 7 filing. Debtors who do not qualify under Chapter 7 may still qualify under Chapter 13, which requires the completion of a repayment plan. For cases filed after December 1, 2011, the median income for a one-person household in Massachusetts is ,496. For a family of four, it is ,067. If you’re in Springfield, MA. If household income is less than the median income for Massachusetts for a family of your size, you can file for Chapter 7 bankruptcy. The median income for a family in Springfield of your size as well as all of the means testing information can be found at the following website: http://www.justice.gov/ust/eo/bapcpa/meanstesting.htm.
Credit Counseling and Financial Management Course
Under the 2005 amendments to the Massachusetts Bankruptcy Code, individual debtors are required to take a credit counseling course with an approved agency prior to filing bankruptcy, as well as a financial management course after their case has been filed.
The Chapter 7 Discharge in Massachusetts In Massachusetts
A Chapter 7 discharge is a type of bankruptcy relief that eliminates most of a person’s debts. It is the most common type of bankruptcy filing in the state and is available to individuals and businesses. Chapter 7 discharge eliminates most debts such as credit card balances, medical bills, and personal loans. It does not, however, discharge certain types of debts such as child support and alimony, student loans, and tax obligations. In addition, certain types of assets are exempt from being liquidated, such as a person’s primary residence and vehicle. In order to qualify for a Chapter 7 discharge, a person must pass a “means test” to prove that they are unable to pay their debts. This test compares a person’s current income and expenses to the median income for a household of the same size in the state. If the debtor’s income is lower than the median income, then they qualify for the discharge. In Massachusetts, the Chapter 7 discharge process typically takes between three and six months to complete. Once the discharge is granted, the debtor is no longer liable for the discharged debts, and creditors can no longer take any action against them.
The Chapter 7 Process
The Trustee also has a duty to investigate the debtor’s financial affairs and to make sure that the debtor has made full disclosure of all assets and liabilities. The Trustee may also investigate whether the debtor has engaged in any activity that may be considered fraudulent or preferential. The Trustee has the power to bring adversary proceedings to recover assets for the estate or to deny discharge or obtain the avoidance of certain transfers or obligations. Discharge The goal of most Chapter 7 cases in Springfield is to obtain a discharge of all dischargeable debts.
A discharge releases the debtor from all debts that arose before the date of filing the petition and that are dischargeable under the Bankruptcy Code. Generally, the debtor will receive a discharge within 60 to 90 days after the meeting of creditors. Once the discharge is entered, the debtor is no longer liable for any of the discharged debts. However, certain debts are not dischargeable under the Bankruptcy Code, including certain taxes, alimony, child support, student loans, most fines and penalties imposed by government agencies, and debts for death or personal injury resulting from the operation of a motor vehicle while intoxicated.