Bankruptcy — just the sound of it evokes strong feelings in most people. Although filing for bankruptcy is rarely anyone's first choice when trying to cope with overwhelming debt, the decision to file for bankruptcy can be the right one when made with full awareness of all its consequences. Contact an experienced bankruptcy lawyer to discuss your options.
Basic Information and Straight Talk on Personal Bankruptcy
Based in Worcester, Massachusetts, the attorneys of Army & Army, LLC, help clients across the cultural and economic spectrum evaluate debt relief solutions such as Chapter 7 bankruptcy. Attorney Lawrence F. Army Sr. has been offering sound counsel and successfully filing Chapter 7 cases in Massachusetts for over 25 years, and when you contact us, our dedicated staff will treat you with respect as we strive to find the best strategy for you.
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At Army & Army, LLC, we believe in a highly educational and consultative approach to help our clients make confident decisions about Chapter 7 bankruptcy, other debt relief options, and meeting challenges such as potential home foreclosure. We work with divorce clients every day — including those who have serious financial problems — and we believe in showing the same compassion and offering the same responsiveness to people in need of debt relief.
Since 1996, Army & Army, LLC, has been building a strong reputation for solving legal issues efficiently, affordably and forcefully when necessary. Whatever your current debt challenges and other financial circumstances in the Worcester-Middlesex County area, our lawyers' will be identifying the best available solution based on your specific pressures and goals. Contact us today for a free consultation.
Consumer Bankruptcy
When an individual falls desperately behind in his or her debt payments, one option may be to declare bankruptcy, a legal proceeding in a federal bankruptcy court that relieves the debtor of some or all of his or her debts. While bankruptcy may not be the best option for everyone, in the right situations, it can provide people with a fresh start. The experienced lawyers at Army & Army, LLC in Worcester, Massachusetts can advise you as to whether bankruptcy may be the right move for you.
Bankruptcy Choices for Consumers
Consumers, like businesses, have options in terms of which type of bankruptcy to pursue. These options are set forth in separate chapters of the federal bankruptcy law - called the Bankruptcy Code - and they are commonly referred to by their chapter numbers. Consumers most commonly file either under Chapter 7 or Chapter 13, with a very few filed under Chapter 11.
The 2005 changes to the federal bankruptcy laws created a new requirement that debtors receive credit counseling from an approved agency in the 180 days before filing for bankruptcy under any chapter, with some exceptions.
Most consumer bankruptcy cases are initiated voluntarily by consumers, but under certain circumstances, can arise involuntarily when creditors force debtors into bankruptcy.
Chapter 7
Chapter 7 bankruptcies, called "liquidation bankruptcies," are the most common type chosen by consumers. The Chapter 7 proceedings begin with the debtor's filing of a petition with the bankruptcy court, which triggers the automatic stay - bankruptcy terminology for the cessation of all debt-collection activity. The court appoints a trustee who oversees the case and liquidates the debtor's nonexempt assets to pay off eligible debts to the extent possible.
Not all of the debtor's assets will be sold in a Chapter 7 bankruptcy case because the law specifies that certain property is exempt from liquidation. For many typical consumers, all of their property is exempt or already subject to valid liens, so eligible debts will be discharged without the loss of any property. This situation is commonly called a no-asset case.
Once the trustee has collected any nonexempt assets and paid creditors from the proceeds, any remaining unpaid debts are discharged, meaning that they no longer exist and the debtor has no further obligation to pay them. Some debts, however, are nondischargeable and remain valid, such as taxes, domestic support obligations and damages resulting from a debtor's willful or malicious acts.
Chapter 13
Alternatively, a consumer may choose Chapter 13 if he or she has stable income, believes the crisis is temporary and wants to repay at least some debt. The debtor must have less than $336,900 in unsecured debt and $1,010,650 in secured debt to be eligible for Chapter 13. A Chapter 13 proceeding, called a wage-earner plan, is also initiated by filing a petition and also stops creditors from trying to collect debts. The debtor proposes a debt repayment plan, to which creditors may object. If the court approves the plan, however, the creditors can take no action outside the plan's scope to collect their debts. Once the plan is completed, the debtor is entitled to a discharge, which releases him or her from all debts dealt with by the plan.
A Comparison
Chapter 13 has certain advantages over Chapter 7 in consumer bankruptcies. For example, Chapter 13 allows the debtor to discharge more types of debts. Although many average consumers have only assets exempt from the liquidation requirement under Chapter 7, some may have assets eligible to be sold. For these consumers, Chapter 13 may allow them to retain more of their assets. A consumer's choice between Chapter 7 and Chapter 13 is not necessarily permanent; once proceedings have begun, a case may be converted to a different chapter under certain circumstances.
Conclusion
Sometimes consumers find themselves in such dire financial situations that filing for bankruptcy is their best option. Any decision to file for bankruptcy should be made carefully after consulting an experienced bankruptcy attorney. Contact Army & Army, LLC in Worcester, Massachusetts to learn more about your options to protect your financial well-being.
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