Bankruptcy and Debt Relief

Not the end of the world...

Filing bankruptcy can be the best option for persons struggling to pay their debts. Upon filing bankruptcy all collection efforts must stop, including foreclosure, and any creditor or debt collector who does not respect this may have to pay you damages. In addition, most people who file bankruptcy are permitted to keep all their assets. At the end of the process, the consumer receives a "fresh start," meaning all dischargeable debts are eliminated.

Although some consumers are helped by debt consolidation and debt settlement companies, many of these companies are not reputable and do not achieve good results even though substantial fees are charged.

There is no "shame" in filing bankruptcy. The bankruptcy laws are designed to assist people who, for various reasons, have become overwhelmed by debt.

Filing for Bankruptcy: An Overview

Filing for bankruptcy allows an individual or a couple to eliminate or reduce debts. There are 2 primary forms of bankruptcy relief for consumers: Chapter 7 and Chapter 13.

A Chapter 7 bankruptcy can provide for the complete elimination of debt for persons who qualify (which means not having income over the median income for households of similar size in Massachusetts). State and federal law provide all consumers with certain exemptions which may protect some or all assets from being used to satisfy debts. For example, a Massachusetts homeowner who has filed a "homestead declaration" with the appropriate Registry of Deeds may be able to protect equity in the property up to $500,000. In addition, retirement assets are usually exempt. Prior to filing a Chapter 7 petition, the attorney will conduct an analysis of assets and determine whether any will be at risk. In addition, a Chapter 7 case allows the consumer to keep any property which is collateral for a debt — such as real estate and vehicles - provided payments remain current. A typical Chapter 7 case is relatively straightforward and will take about 3 months from start to finish.

A Chapter 13 bankruptcy operates like a debt consolidation plan; however, in nearly all cases much less than 100% of debt is repaid. The general principle is that the consumer's disposable income (income which remains after salary deductions and living expenses) is paid on a monthly basis through a court-approved plan which lasts from 3 to 5 years. The plan can be used to get caught up on mortgages and car loans without losing the property. Upon completion of the plan all unsecured debts – such as credit cards and personal loans — are completely discharged. A chapter 13 case can also be used in appropriate circumstances to reduce mortgage and other secured debt.

A person who has previously filed bankruptcy may be eligible to file again. Whether or not all of the relief offered by the Bankruptcy Code can be obtained will depend on whether the prior filing was Chapter 7 or Chapter 13, whether a discharge was obtained, and how much time has passed. Certain aspects of bankruptcy law are complex and while a consumer is perfectly entitled to proceed without an attorney, this is discouraged. We try to be flexible with fees and payment arragements.

Quat Law Offices can assist you with learning more about the bankruptcy process and legal options. Please call us to learn more about our services.

Quat Law Offices is a 'debt relief agency' as defined by 11 U.S.C. §101(12A). We assist people in filing for relief under the Bankruptcy Code.


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