Find a Bankruptcy Lawyer in Northampton, Massachusetts
In Northampton, Massachusetts, bankruptcy is a legal proceeding in which a person or business has some or all of their debts legally excused, when they are unable to pay them. This hopefully allows them to start over with a clean slate and move on, after having learned to better manage their use of credit in the process. However, bankruptcy should not be treated as a way to avoid debt that one simply doesn't feel like paying. It is meant to be a safety net for people or businesses who are truly unable to pay off their debts. Because bankruptcy is not without negative consequences (such as a severely damaged credit rating for many years afterward), it should be viewed as an option of last resort.
Therefore, it is prudent to consult with an experienced Northampton, Massachusetts bankruptcy attorney, who can advise you of the costs and benefits of bankruptcy. Because the decision to file for bankruptcy depends very heavily on the facts of each individual case, the advice of a Northampton bankruptcy attorney cannot be substituted.
Find a Northampton Lawyer that Specializes in Your Area of Need:
Types of Bankruptcy in Northampton, Massachusetts
In Northampton, Massachusetts, there are three basic bankruptcy schemes that are most commonly used. They are known as Chapter 7, Chapter 13, and Chapter 11. Being a product of federal law, the procedural rules governing bankruptcy in Northampton, Massachusetts will be very similar to those in any other part of the United States. Chapter 7 bankruptcy requires the debtor to liquidate some of his or her property, and use the proceeds to pay creditors. While this doesn't sound like much of a relief at first glance, the upshot is that once the eligible property is sold, and the proceeds given to the creditors, all of the debtor's eligible debts are deemed paid in full, regardless of how much the creditors actually ended up getting. Not all of the debtor's property has to be sold off - the debtor will usually be allowed to keep things like a house, at least one car, some types of personal property, retirement accounts, and insurance policies. It should be noted that some debts are not dischargeable, and will have to be paid in full even if the debtor files for bankruptcy. This includes student loans, taxes, and criminal fines.
The other common bankruptcy scheme used by consumers in Northampton is Chapter 13 bankruptcy. In this system, debt is not discharged. Instead, it is restructured. This allows the debtor to have the terms of the agreements that gave rise to their debts in the first place thrown out, and replaced with new terms that call for a structured repayment plan, designed to allow the debtor to survive on whatever income they have, and allowing the creditors to get paid back eventually. Once a payment plan is approved, creditors are not allowed to attempt to collect payment under the original agreements. Chapter 11 bankruptcy is primarily used by businesses, though it can be used by individuals (which is quite rare). Chapter 11 bankruptcy requires that the debtor come up with a reorganization plan - essentially telling the court how they propose to cut costs, streamline their operations, and pay their debts. This plan must be approved by the participating creditors through a simple majority vote.
A major advantage of Chapter 11 bankruptcy is that businesses can continue their operations while going through the process. Also, they can continue to buy and sell their stock.
How Can a Northampton Bankruptcy Lawyer Help?
One should not make the decision to file for bankruptcy in Northampton lightly. Before making any such decision, it would be highly adviseable to contact an experienced Northampton bankruptcy attorney.
