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Bankruptcy can seem intimidating and frightening until you understand how it works.  When we meet, I will thoroughly explain the bankruptcy process and options available for your situation.  Until then I encourage you to review the links below to help you become better informed about the bankruptcy process.

What will happen if I file bankruptcy?

Most people have at least some incorrect perceptions and unfounded fears about bankruptcy.  Below I discuss a few I have come across over the years.  I hope that by dispelling some of these widely held myths, I can help you to determine whether bankruptcy is the right course for you. My initial phone consultation is free. You owe it to yourself to call.
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Will I lose all my property?

The bankruptcy code allows individuals to exempt (or keep) certain amounts of various types of assets. Because of these exemption allowances, most people who file for bankruptcy protection do not lose any property at all. Those with substantial property can usually keep their property if they agree to repayment plan of some or all of their debt.
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Will I be able to ever get credit again?

It is possible to rebuild your credit within months of filing bankruptcy. In many cases, clients report having an easier time obtaining credit after the bankruptcy freed them from so much debt.  I can work with you to teach you ways to rebuild your credit quickly after bankruptcy.
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Will I lose my retirement account?

These assets are generally exempt. In almost all cases, you can keep your pension, IRA, and 401(k) in bankruptcy.
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Will I lose my job?

Generally, employers will not find out about the bankruptcy, unless you choose to tell them. Either way, employers are prohibited from firing someone (or taking any other adverse action) for filing having filed a bankruptcy.
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Will my bankruptcy damage my spouse’s credit?

When one spouse files for bankruptcy protection, his or her spouse’s credit is generally not affected.
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Will bankruptcy help if I owe taxes?

While it is true that some taxes will not be discharged, others can be. There are many rules about the dischargeability of taxes which an attorney can explain to you.
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How does the process work?

For your initial consultation with me, you will need to bring with you information on your debts (including your credit card debt, any lawsuits, foreclosures or repossessions, tax, student loans, or medical bills) and about property you own (bank accounts, real estate, cars, retirement accounts, etc.). I will review your financial situation with you and discuss the benefits of various options available to you including bankruptcy.

If you decide that you want to file for bankruptcy, I will prepare all the necessary documents including the Bankruptcy Petition. When your case is ready to file, we will then meet again so that you can carefully review these documents before I file them with the Bankruptcy Court.

After the Bankruptcy Petition is filed, your creditors are prohibited from harassing you and all lawsuits, foreclosures, garnishments and attachments are stopped immediately. The Bankruptcy Court will mail a notice to this effect to all of your creditors after your Petition if filed. The Bankruptcy Court also sets a date for meeting of creditors meeting (also known as a Section 341 Creditors Meeting).  This creditors meeting is scheduled about one month after your Bankruptcy Petition is filed and usually lasts only 5 to 10 minutes.  You will be required to attend the creditors meeting and I will be right next to you to guide you through it.  At the creditors meeting, the trustee assigned to your case will ask you questions about your assets and your outstanding debt. Although all of your creditors are invited to attend, in most cases, they usually do not.

A Chapter 7 bankruptcy is usually complete in about three to four months. When you complete your Chapter 7 bankruptcy, the Court will issue your Discharge and close your case. The Discharge prevents your creditors from ever collecting on discharged debts.

The process is very similar if you file a Chapter 13 reorganization, except that the Discharge is not issued until you complete all the payments required under your reorganization plan (usually between three to five years). For more information on the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy, click here [place link to Which Chapter]
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What should I do to prepare to file bankruptcy?

If you are considering bankruptcy, the first thing you should do is contact an attorney to discuss what options are available for your specific situation. However, there are certain things which you can do to prepare for bankruptcy before you meet with an attorney.

Stop using your credit cards

Any charges you make or money that you borrow with the intention of having the debt wiped out in bankruptcy instead of paying it can prevent you from discharging that debt or even be considered as fraud. You should consult an attorney before incurring any additional debt.

Do not sell or give away any of your property

Transferring property on the eve of bankruptcy can be considered a fraudulent conveyance and can disqualify you for bankruptcy protection altogether.

Consider which debts to pay

You should continue to pay your mortgage or rent and utilities. However, if you are considering bankruptcy, you should contact an attorney before paying your credit card and other debts. Making large payments on credit card and other types of debt just prior to bankruptcy may complicate your case and may even be a waste of money. Discuss with an attorney which debts you should pay.

Organize and gather important documents

Pull together documents that evidence your debts (credit card and loan statements, etc.) and your assets (deeds, appraisals, bank statements, etc.). Other documents that will requested by your attorney will include  six months of paystubs and the last four years of tax returns.

Take a deep breath

You are not the first person to need help handling your debt. Over 15,000 individuals and families filed bankruptcy in Massachusetts last year. Get ready to take full advantage of your fresh start and plan how to avoid the mistakes you may have made in the past.
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How will bankruptcy affect my credit?

A bankruptcy on your credit report will not forever hinder you from obtaining credit as some would have you believe.  For certain individuals, filing bankruptcy may be the only way to rebuild their credit.  A bankruptcy filing can remain on your credit report for 10 years.  However, banks understand that discharging your debt in bankruptcy usually enables you to stay current on living expenses and new loan obligations.  Banks also know that you are prevented from filing another bankruptcy for 8 years after you get your Chapter 7 discharge. In the bank’s eyes, individuals once laden with debt are frequently a much better credit risk after having obtained a Discharge in bankruptcy.

Of course, a bankruptcy is not a favorable notation on one’s credit report. However, someone considering bankruptcy usually has a credit report that looks pretty bleak. Filing bankruptcy can give you a fresh start and enable you to begin rebuilding your credit. Right after obtaining your Discharge, if you are working or have other income, you may be able to obtain a credit card or even a car loan. Some of my clients have even bought their first home as little as a year after obtaining their Discharge. Many of these individuals would not have been able to obtain this credit without having rid themselves of their old debt by filing for bankruptcy.
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Which chapter is right for me?

Although the bankruptcy code offers several chapters (or types) of bankruptcy, most individuals and families must choose between only two chapters: Chapter 7 and Chapter 13.

A Chapter 7 bankruptcy (also called a “liquidation”) is the simplest and quickest way to obtain a fresh start, and it is the chapter most frequently used.

Technically, in a Chapter 7 bankruptcy, the debtor’s assets become property of a trustee who is charged with selling them so that the proceeds can be distributed to the debtor’s creditors. In practice, however, most debtors do not lose any of their property. This is because of many important exemptions which are available to protect your property.

While there are limitations to these exemptions, most individuals filing bankruptcy are able to keep all of their property while reducing or eliminating their debt. You should note, however, that certain debts such as child support, alimony, certain income taxes, and most student loans are not affected by bankruptcy.

A Chapter 13 bankruptcy (also called a “wage-earner plan” or a “reorganization”) is generally used for individuals with a consistent income who have property that would not be exempt in a Chapter 7, or for people who are behind on mortgage or car payments. Chapter 13 can also be used to help individuals with debts which cannot be discharged in Chapter 7. Under the Chapter 13 reorganization plan, the debtor makes monthly payments over 3 to 5 years to a Trustee, who distributes the money to the creditors according to the reorganization plan.

The amount and duration of the Chapter 13 plan is based on the debtor’s monthly income and expenses, the amount of their debt, and the value of their property. Depending on these factors, consumers who qualify will pay back either part or all of their debts. As long as Chapter 13 debtors stay current on their reorganization plan and other obligations, they are able to keep their property.

Although both Chapter 7 and Chapter 13 bankruptcy filings will stop creditor harassment, lawsuits, and wage garnishments, Chapter 13 is particularly helpful in stopping foreclosure of a home or repossession of a vehicle.   Debtors can use the Chapter 13 process to catch up on their payment arrears and hold onto a home or car.
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