Legal Question in Bankruptcy in Massachusetts

Re: Filing Chapter 7

Thank you for your inquiry. Considering bankruptcy as an option is seldom an easy decision. The bankruptcy laws were designed and enacted to give honest debtors who find themselves in a very difficult financial situation a "Fresh Start".

Depending on the particuliars of your current situation, as a consumer you would be entitled by law to pursue either a Chapter 7 or a Chapter 13 bankruptcy. If granted, a Chapter 7 would, among other benefits, discharge your obligation for your unsecured debts. In you case, the credit card debt. A Chapter 13 would put you into a 3 year payment plan with the court whereby you would pay a certain percentage of your excess monthly income (10,20, maybe 30%) to your creditors. The determining factor whether a 7 or 13 will be granted requires an analysis of your current income vs. monthly expenses. This is something you would discuss in detail with a qualified attorney. Also, if you file for bankruptcy, creditors ARE NOT PERMITTED to contact you.

Any other questions, just ask!

Michael Eramo, Esq.

Re: Filing Chapter 7

The short answer is, yes, you can file under chapter 7 even if you have a job. The bigger question is whether you could afford to pay your creditors SOMETHING over three years, even if it is not 100%. To answer that question, you have to look closely at an honest budget. I would be happy to review your situation with you. Call for a free 1 hour consultation. Best wishes.

Re: Filing Chapter 7

You can file a chapter 7 even if you are working. If your "excess income" - what's left over after paying rent/mortgage, food, utilities, etc., including cable TV and a reasonable amount for "entertainment" - is more than enough to pay your unsecured creditors (credit cards, personal loans, judgments) at least 10 percent over 36 months, you would have to file a chapter 13.

Also, if your non-exempt assets have equity totalling more than you owe the unsecured creditors, you would have to pay them the difference. Equity is what an asset is worth if you sold it (not as a dealer, but at a yard sale or in the paper) minus anything you owe on it.

It sounds more complicated than it is, but most people have a problem with the exemptions when they do it themselves.

Forms and instructions are available at Staples, Borders Bookstores, Barnes & Nobles, etc., for about $30.

I offer a document review service for $75 if you want to try doing it yourself.