Legal Question in Bankruptcy in Massachusetts
What can I keep and what can be discharged?
I live in MA. In Apr2005 I purchased a 4 tenament building. In March 2006, I also bought a single family home that I currently live in. In March of 06, my partner of 10 years lost his job and we used credit cards to get by. 26,000 in debt now in my name, plus a car payment 550/month. I consolidated my credit card debt with a consumer aid agency and am currently making payments of 660/month. I used my tax returns to get current on the 2 mortgages that were in arrears. My boyfriend is working now, but makes only enough to pay gas, groceries and child support for his child. My paycheck pays the other bills and the ortgage on the house. We are in over our heads and don't want to get behind again. Both houses were purchased at the height of the market and won't sell for what we owe. The 4 family pays for itself when rented, but our credit card debt and car payment are killing us. If I file BK, will I be forced to sell my houses? Will my cc debt or car be discharged? Help!
1 Answer from Attorneys
Re: What can I keep and what can be discharged?
In short, the answer to all your questions is "it depends." There are 2 kinds of bankruptcies available to consumers, Chapter 7 and Chapter 13. In a Chapter 7, you can keep all your property if the equity is less than your allowed exemptions. If the real estate is upside down and you are current on the payment, you can most likely keep the real estate while your credit card debts will be discharged. The choice of whether to keep the car would be yours, as long as you are current on the payments and will remain current going forward.
If your equity in the real estate exceeds the exemptions or if you are behind on the mortgages or if you make more than a certain amount per year, you will need to do Chapter 13 which allows you to keep ALL the property that you choose to keep in exchange for a 3-5 year payment plan that is based on your income and expenses. In a Chapter 13 you would make payments to the court to cover your secured debt payments and a certain percentage of the unsecured ones (ie credit cards). At the end of the payment plan, the remaining debts are discharged.
The bankruptcy inquiries are usually very fact-specific. Feel free to call my office for a free consultation. We'll examine the specifics and figure out what you qualify for, and what the end result would be.
Regards.
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