Bankruptcy is a legal procedure allowing a person or business to have their debts absolved, in part or in whole. It is normally treated as a last resort, because, while it can prevent financial catastrophe, it has some huge 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 Leominster, Massachusetts will have particular rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Leominster, Massachusetts
There are 2 common types of consumer bankruptcies in Leominster, Massachusetts: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 liquidates some 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 types 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 basic 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 cleared. However, some types of debt cannot be discharged in bankruptcy, including student loans, taxes, child support, personal injury awards, and fines. If most of your debt in Leominster, Massachusetts is not dischargeable, you might want to consider other options besides bankruptcy.
Chapter 13 Bankruptcy in Leominster, Massachusetts
In Leominster, Massachusetts, Chapter 13 is very different from Chapter 7. Chapter 13 may or may not be the best choice for you; this depends on the facts of your individual situation. Chapter 13 bankruptcy does not excuse debt, it restructures it. This involves a court coming up with an altered repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original contracts that created the debt in the first place. This creates a new payment structure, normally involving a single monthly payment, that the debtor should find manageable.
Which Type of Consumer Bankruptcy Should I File in Leominster, Massachusetts
Whether Chapter 7 or Chapter 13 is the right choice for you depends heavily on your particular 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.
In any case, it would be a good idea to consult a local bankruptcy Attorney in Leominster, Massachusetts. Your Attorney can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).