QUESTIONS AND ANSWERS ABOUT BANKRUPTCY:
To best serve potential clients who are considering bankruptcy, we offer the following answers to frequently asked questions about filing for bankruptcy:
Q: Will filing for bankruptcy stop creditors from calling and harassing me?
A: Yes. Filing for bankruptcy will stop all collection activities, including lawsuits, foreclosure proceedings, wage garnishment and tax levies.
Q: How will bankruptcy affect my credit?
A: Bankruptcy will hurt your credit, but usually no worse than it has already been damaged. Filing for bankruptcy will give you a fresh start, so you can begin to restore your credit.
Q: What assets can I protect during bankruptcy?
A: Often, you can protect all of your property during bankruptcy.
Q: Should I file for Chapter 7 or Chapter 13?
A: To qualify for Chapter 7 you must meet the criteria of the “means test,” which is based on income. If you exceed the income qualifications, you can file for Chapter 13 bankruptcy.
Contact us to find out which option you are eligible for.
Q: Why do I need a bankruptcy lawyer?
A: An experienced bankruptcy attorney can guide you through the process and help you avoid setbacks. Essentially, a lawyer can help ensure you are approved for a fast and efficient discharge of your debt.
For further information, please contact: Daniel F. Dowcett, Attorney at Law, 185 Devonshire Street, Suite 501, Boston, MA 02110; Tel: 617-742-4980; FAX: 617-742-4898;
E-mail: DAN@DOWCETTLAW.COM.
TYPES OF BANKRUPTCY
Chapter 7 Bankruptcy
A Chapter 7 Bankruptcy is also known as a liquidation proceeding, In Chapter 7, the debtor turns over all non-exempt property to the trustee who then converts it to cash for distribution to creditors. As a practical matter, this rarely occurs, as most debtors do not have assets which are non-exempt. In the event that a debtor has non-exempt property, then a Chapter 13, also known as a reorganization bankruptcy can be filed. The purpose of a Chapter 7 filing is to give the debtor a fresh start.
In a typical Chapter 7 Bankruptcy filing, a debtor keeps all of his assets and discharges all of his debt. As long as the debtor is current, debt which is secured by property such as a home mortgage or automobile loan may be retained by the debtor by agreeing to reaffirm the debt with the creditor or by noting on the bankruptcy filing that the debtor will continue to make payments pursuant to the contract. A debtor typically receives a discharge of all dischargeable debts within four months of the filing.
Bankruptcy laws require debtors to meet certain income requirements in order to file for Chapter 7 protection
Chapter 13 Bankruptcy
A Chapter 13 Bankruptcy is also known as a reorganization proceeding. In a Chapter 13 bankruptcy, the debtor will pay of all, or more usually, a reduced portion of his or her debt over a period of time, between 36 and 60 months depending on the amount of the debt and the debtor’s ability to pay the current expenses and a portion of the debt each month.
Individuals may file for Chapter 13 bankruptcy protection if they reside in the US, have a source of regular income, and on the date the petition is filed have secured debt which does not exceed $1,149,525.00 and unsecured debt which does not exceed $383,175.00 These figures will adjust every three years on April 1st pursuant to section 104(a) of the bankruptcy code.
A corporation or a partnership may not file a Chapter 13 petition.
What is the Difference Between Chapter 7 and Chapter 13?
Chapter 7 bankruptcy allows a person to wipe out debt and obtain a fresh start in just a few months. Chapter 7 bankruptcy will wipe out unsecured debts such as credit cards, medical bills and payday loans.
Chapter 7 will also allow you to surrender a home or vehicle or other financed purchase and walk away without owing another penny. The entire Chapter 7 process usually takes about 4 months from the time you file until the end of your case.
Chapter 13 bankruptcy is a repayment plan that lasts from 3 to 5 years. Chapter 13 is a form of debt consolidation where you pay back secured debts, usually in full, and pay cents on the dollar on your unsecured debts. In Chapter 13 you create a Chapter 13 plan which requires you to make a monthly payment to the Chapter 13 Trustee who then pays your different creditors.
A great benefit of Chapter 13 is that it will stop the foreclosure of your home or the repossession of your car and allow you to cure any delinquency and catch up your payments over the length of the Chapter 13 plan.
What Debts are Dischargeable in Bankruptcy?
- Most unsecured debts are erased in bankruptcy except for:
- Child support and alimony;
- Debts for personal injury or death caused by your drunk driving;
- Student Loans;*
- Income taxes;*
- In some instances student loans may be dischargeable.
- Federal Income Taxes may be discharged if certain conditions are met.
- Debts which were incurred on the basis of fraud, such as lying on a credit application; credit purchases of $500.00 or more for luxury goods or services made within 60 days of filing; loans or cash advances of $750.00 or more, taken within 70 days of filing.
- Debts from willful or malicious injury to another person or another person’s property; Debts from embezzlement, larceny or beach of trust and
- Debts you owe from a divorce decree or settlement unless after bankruptcy you would still not be able to afford to pay them or the benefit you’d received by the discharge outweighs any detriment to your ex-spouse (who would still have to pay them if you discharge them in bankruptcy)
- Debts which you fail to list on your bankruptcy petition;
- Debts for condominium or cooperative association fees.
HELPFUL WEBSITES:
For further information, please contact: Daniel F. Dowcett, Attorney at Law, 185 Devonshire Street, Suite 501, Boston, MA 02110; Tel: 617-742-4980; FAX: 617-742-4898;
E-mail: DAN@DOWCETTLAW.COM; Spanish interpreter available.