Massachusetts Bankruptcy Laws should be known by every resident of the state of Massachusetts. A cashless society may have advantages, but one of its foremost disadvantages is the fast rise of bankruptcy declarations in the last decade. Furthermore, Massachusetts citizens are not immune to these changes; they’ve also had their share of bankruptcy declarations. With regard to this, every citizen should know about Massachusetts bankruptcy laws to give them an idea of what to expect during bankruptcy application.
An in-depth study of the federal and state bankruptcy laws may take years, and you may be in a hurry to declare for bankruptcy because your creditors are already hounding you with endless phone calls and countless number of mails accumulating in your mailbox. You need not know everything because in every bankruptcy case, it is important to hire a lawyer. This lawyer will not only be there to give advice on what’s best for you, but also guide you through the whole bankruptcy process should you decide to pursue it.
Every federal court in the state requires a debtor to undergo a credit counseling program. This credit counseling program will teach you how to manage your money and debts, as well as how to develop a budget so that if you decide to declare for bankruptcy, it will be the first and the last time you’ll file for. This program should be attended 180 days before you file for bankruptcy. The organization that conducts the program should be accredited by the bankruptcy court and you must present a certification that you have really attended the seminar.
If are done with the credit counseling and you still want to file for bankruptcy, then you may choose between Chapter 7 and Chapter 13.
The former bankruptcy protection program offers a more enticing bargain for debtors making it more popular from the latter case. It is a common misconception of debtors that applying for Chapter 7 will solve you of your insurmountable debts in an instant. While this may be true, the underlying consequences might be more than you bargain for. You can lose your assets, even your most prized possessions as deemed necessary by the trustee assigned to your case. Furthermore, the criteria for the qualification of Chapter 7 are a bit excessive. You can qualify based on either of the two items: a debtor’s monthly income lower than the median income level set by the state of Massachusetts based on current statistics from the US Census Bureau and if you are unable to shell out $100 per month enough to pay your debts for a period of 5 years.
For those who do not qualify for Chapter 7, the only bankruptcy option left is Chapter 13. While this bankruptcy program may not give you the satisfaction of paying your debts at one time, it helps by restructuring the terms of your debts so you can allocate some funds to pay your creditors. For you to qualify for Chapter 13, a regular income is necessary. This repayment plan should be court approved and should be implemented in 5 years time.
When applying for bankruptcy, you will be requested to declare all your assets. These will then be classified as non-exempt and exemptions. Massachusetts bankruptcy laws protect your exemptions from creditors. Some of these exemptions include:
• Your home granting that the equity is less than $500,000;
• A vehicle with an equity of less than $700;
• Furniture amounting to $3,000;
• A family library worth $200 or less; and
• Other benefits like employee pensions, endowment policy, and other public benefits.
While bankruptcy offers temporarily solution to your debts and addresses the concern of the creditors, your credit rating with be affected too.