Bankruptcy is a legal procedure allowing a person or business to have their debts excused, in part or in whole. It is typically treated as a last resort, because, while it can prevent financial catastrophe, it has some influential 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 Holyoke, Massachusetts will have distinct rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Holyoke, Massachusetts
There are 2 typical forms of consumer bankruptcies in Holyoke, Massachusetts: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 liquidates part of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many forms of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and necessary personal items, like clothing. These assets are not available to creditors.
Once eligible assets are sold, and the proceeds turned over to the creditors, most remaining debt is absolved. However, some forms of debt cannot be discharged in bankruptcy, including student loans, taxes, child support, personal injury awards, and fines. If most of your debt in Holyoke, Massachusetts is not dischargeable, you may want to consider other options besides bankruptcy.
Chapter 13 Bankruptcy in Holyoke, Massachusetts
In Holyoke, Massachusetts, chapter 13 is extremely different from Chapter 7, and may or may not be the best option for you, depending on your situation. Chapter 13 bankruptcy does not absolve debt, it restructures it. This involves a court coming up with an adjusted repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original arrangements that created the debt in the first place. This creates a new payment structure, typically involving a single monthly payment, that the debtor should find manageable.
Which Type of Consumer Bankruptcy Should I File in Holyoke, Massachusetts
Chapter 13 is typically a good option for people who have a stable income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a stable income, Chapter 7 might be more beneficial.
Regardless of your situation, you should speak with an attorney in Holyoke, Massachusetts who is accomplished in bankruptcy before making a decision. They will be able to advise you of your options, and the likely results of each one, allowing you to make a much more informed decision.