Chapter 7 Bankruptcy: The Basics
Personal Bankruptcy Attorneys — Boston, Massachusetts
Chapter 7 bankruptcy is an asset-based form of debt resolution. What that means is that creditors are paid through liquidation of the debtor's assets. What it does not mean is that the debtor is stripped clean and forced to start over with absolutely nothing. On the contrary, Chapter 7 bankruptcy is meant to give people who are eligible a meaningful new beginning.
Despite what media reports may have led you to believe, most people considering bankruptcy are still eligible to file under Chapter 7. To discuss this possibility with an experienced bankruptcy lawyer — contact the Law Offices of Richard N. Gottlieb.
Is Chapter 7 Bankruptcy Right for You?
Chapter 7 is not "right" for everyone. If you're considering bankruptcy primarily because of unsecured debt involving credit cards, medical bills or personal loans, AND you do not have too much secured debt — Chapter 7 is probably the best option.
Are You Eligible for Chapter 7?
To be eligible, you must not have had a Chapter 7 discharge in the last eight years and you must pass the Chapter 7 "means" test. How does this test work? In simplest terms, your household income over the previous six months is compared to that of similarly situated people statewide. If your average income falls below the median — you pass. If your income is higher than the median, then your monthly debt payments along with reasonable living expenses are calculated. If you are not able to pay at least $10,000 over a period of 60 months, which amounts to approximately $166 per month, you also pass.
How Does Chapter 7 Work?
As soon as you file, an automatic stay goes into effect. Once creditors know you have filed, they cannot contact you about your debts while the case is pending. The court will notify all creditors listed in your petition and appoint a trustee to oversee your case. The trustee will review your petition for accuracy and set up a meeting with your creditors. You must attend this meeting. This prospect may make you nervous. Relax. Few creditors ever show up. After this meeting, the trustee and your creditors have 30 days to object to any of the exemptions you've listed and 60 days to challenge the dischargeability of any listed debts. Most Chapter 7 discharges will occur within six months of the date your petition is filed.
Help is Here. Hope is Here.
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Call us in Boston, Massachusetts, or contact us online for a free initial consultation with a lawyer. Office hours: Monday through Friday from 9 a.m. to 5 p.m. and by appointment. Cancellations and reschedules require a 24-hour notice or a $25 fee will apply.
