Chapter 7 Bankruptcy

The world is a different place than it was thirty years ago. Real estate prices in New England are growing more and more expensive and taxes can be thousands a month. Throw in a car payment and that salary you make is all out the door the moment it hits your bank account. All it takes is one big life event, like an emergency overnight visit to the hospital, and paying your bills on time is no longer an option.

That is where the U.S. Bankruptcy Code (11 U.S.C.) might be able to help. Bankruptcy allows you to get out from under your debt and have a fresh start. However, everyone's situation is different. That's why it's important to sit down with an experienced Bankruptcy lawyer to prepare for your filing. In this meeting, the lawyer will explain your options, and also give you some things that need to be done ahead of time.

There are two types of bankruptcy that are available to consumers, Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy is complete liquidation of debt. Most of your debt is completely wiped out at the end of the process. Some examples of the debts that are eliminated are medical bills, credit card payments, water bills, and dentist bills. Unfortunately, this generally does not include student loan obligations. 

In a Chapter 7 case, the debtor comes out "clean" because most (sometimes all) of their debt is completely washed away at the end of the case.

All types of people can file for Chapter 7 Bankruptcy including individual people, married couples, corporations, and partnerships. Most Chapter 7 filers struggle monthly to keep up with their recurring obligations and do not have much assets (property of value). They could be renters, home owners, car owners, young, old, and in between.

To qualify for a Chapter 7 bankruptcy the debt must pass the "means test". If they make too much money and do not pass this test, they must file a Chapter 13 petition.

In a bankruptcy, the court appoints a "Trustee" to oversee the debtor's application. This Trustee is always an attorney who is highly skilled in the field of bankruptcy. They work for the court and are there to oversee the debtor's petition for bankruptcy. They also are there to find out if the debtor has assets to satisfy the creditors they owe.

In the bankruptcy petition, the debtor has to list all of their assets. Assets are things like your house, car, jewelry, stamp collection, clothes, cash on hand, stocks, and bank accounts. The Trustee can "seize" any assets that are not "exempt."

Bankruptcy Exemptions

There is a list of Federal exemptions and a list specific to Massachusetts and New Hampshire. These exemptions include an exception for your car, equity in your home up to a certain amount, clothes, retirement accounts, and other items. If the asset falls into one of those categories, the Trustee has no claim for it.

If the asset does not fall into an exemption category, the Trustee can "seize" the property or its value, so it can be sold and the money can be disbursed to the debtor's creditors. And that is why you need a skilled Lowell bankruptcy attorney.

At Marcotte Law Firm, our experienced Lowell Bankruptcy Lawyers know the exemptions inside and out and what the law allows you to keep. The categories are not always clear, so you should always have an experienced bankruptcy attorney there to make sure you are able to keep the property you love.

Bankruptcy is never easy. Our clients often have feelings of shame and frustration when they come to see us. However, when the process is done, our clients have a great sense of relief from releasing the crippling debt that has controlled their life for too long. For a lawyer, helping clients is the best part.

Give our Bankruptcy Attorneys a call today for a free consultation, (978) 458-1229.