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 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 Lincoln, Massachusetts will have particular rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Lincoln, Massachusetts
There are 2 common forms of consumer bankruptcies in Lincoln, 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 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 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 Lincoln, Massachusetts is not dischargeable, you may want to consider other options besides bankruptcy.
Chapter 13 Bankruptcy in Lincoln, Massachusetts
In Lincoln, 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 does not excuse any debt, but it creates a new payment plan that should give the debtor some breathing room. Typically, all of the debts are consolidated into 1 periodic payment. While this may make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.
Which Type of Consumer Bankruptcy Should I File in Lincoln, Massachusetts
The answer to this question depends strongly on your particular situation. If you have enough stable income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 may be a good option. If you don't have much stable income, and most of your property is exempt, Chapter 7 might be better.
Of course, you should always seek the counsel of an accomplished local Lincoln, Massachusetts bankruptcy attorney before you make the decision to file. He or she will be able to advise you of your options, and suggest the best possible course of action for your individual situation.