Bankruptcy

Bankruptcy Lawyer in Peabody

Bad things happen to good people. Bankruptcy has been referred to as a “last resort” option. Sometimes, people with stellar credit scores, or steady employment, or excellent health, or a stable marriage, may find themselves considering bankruptcy after having experienced a sudden and unexpected life change like the loss of a job, divorce or a disabling work accident. These life events can be scary and come with a buffet of negative feelings like embarrassment, shame, and the feeling of being stuck in a situation that seems unsolvable.

We understand the human side of approaching the topic of bankruptcy and, since 2006, we’ve built our legal services to acknowledge the unpleasantness and fear that come along with it by providing clear and easy-to-understand explanations of the bankruptcy filing process. Whether you’re an individual or small business that has found yourself unable to pay your debts, being sued by a credit card company, or are facing a wage garnishment or driver’s license suspension, we’ll give you all the information needed to make calm and focused choices about your financial future.

Making the decision to declare bankruptcy to eliminate all of your debts, or to greatly reduce them, can be an overwhelming experience. Choosing the right legal counselor that will ease your discomfort about your situation doesn’t have to be. We’ll guide you through the process one small step at a time. Like the old adage, how do you eat an elephant? one bite at a time.

What is Bankruptcy?

Filing for bankruptcy allows an individual, married couple and small business to eliminate or reduce their debt (often called “discharging debt”). In bankruptcy, there are two types of debt: secured debt (such as taxes, alimony, child support, student loans, or criminal fines or restitution), and unsecured debt (such as credit card debt, medical bills, old income taxes, civil judgments, or personal loans). For individuals and married couples, there are two common types of bankruptcy: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy Lawyer in Peabody

The most common form of bankruptcy, filing under Chapter 7, discharges your personal liability to pay all unsecured debt. If you file Chapter 7 bankruptcy, you usually get to keep most of your property (although, sometimes, non-exempt property is at risk of being sold by a bankruptcy trustee, but, usually, this is not the case and your attorney will be able to tell you in advance if your assets are at risk and which assets are at risk) and your creditors can no longer sue you. Not everybody qualifies for Chapter 7.

Who is Eligible to File Chapter 7?

If, according to the IRS, your annual income is below the median income for your area and household size, you’re probably eligible. If, however, your annual income exceeds the median income, eligibility is mostly determined by the “means test”, which is a complex calculation based on your income. This means test is used to determine if your financial situation qualifies you for bankruptcy at all, or to determine whether you must file under Chapter 7 or Chapter 13.

Why Do I Need a Bankruptcy Attorney?

A bankruptcy lawyer could advise their client on whether or not they qualify for Chapter 7, when the most advantageous time to file is, and whether the debtor’s assets (such as your home) are safe from being sold by a bankruptcy trustee.  Filing for Chapter 7 bankruptcy can be a complicated process. KONSTANTILAKIS LAW PC understands how stressful financial difficulties can be on you and your family, and  it’s our goal to not only ensure that a Chapter 7 filing is the most beneficial option for you, but also to make sure the filing is successful with minimal risk to your assets.

Chapter 13 Bankruptcy Lawyer in Peabody

Many people file for Chapter 13 bankruptcy if they’re facing a foreclosure. In Chapter 13, you usually propose a plan for restructuring your debt, and usually you pay back less than 100% of your original unsecured debt amount. The result can be that you can keep your home and, after as little as 36 months of sticking to your payment plan, your unsecured debt could be gone.

The goal of bankruptcy is to give individuals and families overwhelmed by debt a “fresh start” on their finances. Bankruptcy laws can be confusing and are constantly evolving, so it’s important that you consult with a bankruptcy lawyer who is up to date. Filing for bankruptcy involves a lot of paperwork, and a mistake on a form could have drastic consequences on your financial future. It’s beneficial to have an experienced and knowledgeable bankruptcy attorney to help guide you through this process.

Chapter 13, also referred to as the “reorganization” bankruptcy or the “wage earner’s plan”, has some similarities to a debt repayment plan for consumers. Chapter 13 could offer some advantages over Chapter 7 if the individual filing for bankruptcy is a homeowner. By filing under this chapter, many homeowners can stop the foreclosure process (though they must make all mortgage payments on time once under the Chapter 13 plan).

10 FAQs About Bankruptcy in Massachusetts

You may have never imagined filing for bankruptcy. But many life events can lead honest, hardworking people overwhelmed with debt to consider bankruptcy protection. In Massachusetts, state and federal laws provide options for people to get a fresh start. Bankruptcy, however, is a serious legal matter. You should carefully weigh this decision and discuss the pros and cons with a bankruptcy attorney.

How does bankruptcy work?

If you qualify for Chapter 7 bankruptcy protection, a trustee sells your assets to pay your creditors. As soon as you file for bankruptcy, collection activity immediately stops. If your petition for bankruptcy fails, the collection calls may start again.

Will I lose everything?

No. You can exempt certain assets from the bankruptcy process. This may include your home, car, retirement accounts, health aids, furniture and most of your wages. If you exempt an asset, you keep it, and a trustee cannot sell it during bankruptcy. In Massachusetts, you can follow either state or federal law to determine exemptions.

Will I exit bankruptcy debt-free?

Most debts can be discharged through bankruptcy, but not all. You may still be responsible for taxes, student loans, alimony, child support and legal settlements.

Can I file for bankruptcy more than once?

You cannot receive a Chapter 7 bankruptcy discharge if you received a Chapter 7 or 11 discharge within the last eight years or a Chapter 12 or 13 discharge within the past six years. If your first petition for bankruptcy fails, you may have difficulty refiling without legal assistance.

What is the means test?

To qualify for Chapter 7 bankruptcy, you normally have to show your household income is below the median for a household of your size in the state of Massachusetts. If your household income is above the median, you may still qualify under certain circumstances.

Can I file for bankruptcy without my spouse?

Yes. However the court still requires your spouse’s financial information in order to assess the income of your household. Depending on your circumstances, you may want to file individually for bankruptcy, as a joint petition with your spouse, or as two separate petitions.

What are my responsibilities before filing for bankruptcy?

You must complete a debtor education course from an approved credit counselling agency within six months before filing. The certificate of completion must be filed with the court.

Will my wages be garnished?

In Massachusetts, you may exempt 85 percent of your gross wages or 50 times minimum wage, whichever is greater, from bankruptcy proceedings. In general, you may also exempt 100 percent of unemployment benefits.

Is bankruptcy a matter of public record?

Bankruptcy is a matter of public record and files are available for viewing. However, you can request certain privacy protections from the court. For example, if you have a restraining order against a former spouse, the court can remove your street address from public documents for your protection upon presentation of the order.

Do I need an attorney?

Given the serious legal consequences of filing for bankruptcy, legal advice is essential. In addition to helping you decide if bankruptcy is the right option for you, a lawyer can help protect your interests throughout the process. To learn more, contact Konstantilakis Law P.C.