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.
In Massachusetts, certain classes of property are exempt from execution of a bankruptcy judgment. There’s no simple formula that a person can use to determine when he or she should file for bankruptcy, it must be said. It might depend on a variety of factors, including possible foreclosure on a home or property or maybe a job loss.
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.
Generally speaking, the most common form of bankruptcy filed for is Chapter 7, and it’s most often thought of as a fresh start for the filer. There’s now a means testing process, a preliminary hearing and then an affirmative or negative judgment on whether or not Chapter 7 may proceed. If it’s allowed to, an asset sell-off will occur (except for exempted property) and a payment made to creditors. Chapter 13 is a filing and then a repayment to creditors on a set schedule.
All bankruptcy in Massachusetts procedures have their genesis with the filing of an official bankruptcy petition to the federal bankruptcy court. A statement of financial affairs is provided to the court along with a schedule of actions to be taken in order to proceed. There’s a $299 filing fee for Chapter 7 bankruptcy, which is the most common form. It’s probably best to take on an experienced bankruptcy lawyer before proceeding, though.
Understanding the issue of filing for bankruptcy in Massachusetts can be scary. It’s important that you have confidence in your decision making and an experienced bankruptcy law firm MA can help guide you down the right path.
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