Bankruptcy is a legal procedure allowing a person or business to have their debts discharged, in part or in whole. It is usually treated as a last resort, because, while it can prevent financial catastrophe, it has some major long-term consequences. This warrants careful consideration of the costs and benefits. Being a product of federal law, bankruptcy will go through federal courts. Accordingly, the procedure for filing for bankruptcy in Massachusetts is basically the same as the procedure anywhere else in the United States. However, individual courts in Berkley, Massachusetts will have individual rules for exemptions, so you should speak with a local attorney before filing.

Chapter 7 Bankruptcy in Berkley, Massachusetts

There are 2 main types of consumer bankruptcies in Berkley, Massachusetts: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves liquidation of some of a debtor's assets. It requires that a certain percentage of the debtor's property to be sold to pay off as much debt as possible. The majority of property that most people own, however, is exempt. This usually includes homes, vehicles, retirement accounts, and others. These are not available to creditors.

Once all non-exempt assets are sold, and the money from the sales turned over to the creditors, most remaining debt is discharged. But some types of debt cannot be discharged through Chapter 7 bankruptcy. These include child support payments, student loans, and criminal fines, among others. If most of your Berkley, Massachusetts debts are not dischargeable, you might want to consider options other than bankruptcy.

Chapter 13 Bankruptcy in Berkley, Massachusetts

In Berkley, Massachusetts, Chapter 13 is quite different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your particular situation. Chapter 13 Bankruptcy involves a court setting up a modified payment plan, which allows the debtor to pay off most or all of his debts over a longer period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.

Which Type of Consumer Bankruptcy Should I File in Berkley, Massachusetts

Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your individual situation. If you have a steady income stream, and a lot of non-exempt property, Chapter 13 might be right for you. If you don't have a steady income, and most of your property is exempt, Chapter 7 might be a better way to go.

Whatever your situation, you should speak with a local Berkley, Massachusetts bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely consequences, which will help you make a more educated decision.