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 Lunenburg, Massachusetts will have particular rules for exemptions, so you should speak with a local attorney before filing.

Chapter 7 Bankruptcy in Lunenburg, Massachusetts

There are 2 common types of consumer bankruptcies in Lunenburg, 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 the non-exempt property is sold, the rest of the dischargeable debt is absolved. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Lunenburg, Massachusetts is not dischargeable, Chapter 7 may not be the best option.

Chapter 13 Bankruptcy in Lunenburg, Massachusetts

Chapter 13 Bankruptcy in Lunenburg, Massachusetts is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each particular case. Chapter 13 bankruptcy does not discharge debt. Instead, it restructures it. This involves the bankruptcy court coming up with a new payment plan that supersedes the terms of the contracts that gave rise to the debt in the first place. This results in an altered payment plan that the debtor should find manageable, if he or she can make a few sacrifices.

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

This depends entirely on the facts of your individual case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.

In any case, it would be a good idea to consult a local bankruptcy Attorney in Lunenburg, 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).