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 creation of federal law, bankruptcy will go through federal courts. Accordingly, the process for filing for bankruptcy in Massachusetts is essentially the same as the process anywhere else in the United States. However, particular courts in Chelmsford, Massachusetts will have individual rules for exemptions, so you should speak with a local attorney before filing.

Chapter 7 Bankruptcy in Chelmsford, Massachusetts

There are 2 main forms of consumer bankruptcies in Chelmsford, Massachusetts: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 involves liquidation of part 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 the non-exempt property is sold, the rest of the dischargeable debt is excused. Some forms of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Chelmsford, Massachusetts is not dischargeable, Chapter 7 may not be the best option.

Chapter 13 Bankruptcy in Chelmsford, Massachusetts

Chapter 13 Bankruptcy in Chelmsford, Massachusetts differs significantly from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 does not discharge debt, but restructures it instead. Usually, various debts are consolidated into a single monthly payment. This is designed to make the debt more manageable, giving the debtor the chance to pay off the debt over a longer period of time, without all of it coming due at once. This is usually manageable, as long as the debtor can make some sacrifices.

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

Which Bankruptcy type to file under depends strongly on the facts of each individual case. If you have a stable stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a stable income or large amounts of non-exempt property, you may be better off filing for Chapter 7.

In any case, you should talk with a local Chelmsford, Massachusetts bankruptcy lawyer. Your lawyer can advise you of your options and inform you of their likely consequences. This will make it much easier for your to make an informed choice.