Bankruptcy in Massachusetts: What You Need to Know

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Bankruptcy is a legal process that can provide relief to individuals and businesses who are struggling with overwhelming debt. In Massachusetts, bankruptcy laws are governed by federal law, but the state has its own exemptions and regulations. In this blog post, we’ll discuss the bankruptcy process, the types of bankruptcy, its consequences, and how to avoid it in Massachusetts, including helpful government links.

The Bankruptcy Process

The bankruptcy process typically involves the following steps:

Credit counseling: Before filing for bankruptcy, you must complete a credit counseling course from an approved provider.

  1. Filing for bankruptcy: You must file a petition for bankruptcy with the bankruptcy court.
  2. Automatic stay: Once your petition is filed, an automatic stay goes into effect, which stops most collection actions, including foreclosure and wage garnishment.
  3. Meeting of creditors: You must attend a meeting of creditors, where you’ll be questioned about your financial situation.
  4. Discharge: If your bankruptcy is approved, you’ll receive a discharge of your debts.

Types of Bankruptcy

There are two types of bankruptcy available to individuals in Massachusetts:

  • Chapter 7 bankruptcy: Chapter 7 bankruptcy is a liquidation bankruptcy, which allows you to discharge most of your debts by selling your non-exempt assets.
  • Chapter 13 bankruptcy: Chapter 13 bankruptcy is a reorganization bankruptcy, which allows you to repay your debts over a period of three to five years.

Consequences of Bankruptcy

Bankruptcy can have several consequences, including:

  • Damage to credit score: Bankruptcy can significantly damage your credit score and make it difficult to obtain credit in the future.
  • Loss of assets: In a Chapter 7 bankruptcy, you may be required to sell non-exempt assets to pay off your debts.
  • Difficulty obtaining future housing: Bankruptcy can make it difficult to obtain housing in the future, as many landlords will check your credit history before renting to you.
  • Legal problems: Bankruptcy can result in legal problems if you owe more on your debts than you are able to repay or if there are legal issues associated with your debts.

How to Avoid Bankruptcy

Here are some tips to help you avoid bankruptcy in Massachusetts:

  • Create a budget: Create a budget and stick to it, cutting back on unnecessary expenses.
  • Seek financial counseling: Seek the help of a financial counselor or advisor to help you manage your finances and avoid bankruptcy.
  • Negotiate with creditors: Negotiate with your creditors to see if you can work out a payment plan or settlement.
  • Consider debt consolidation: Consider consolidating your debts through a loan or credit counseling agency.

Helpful Government Links

If you’re considering bankruptcy in Massachusetts, there are several government links that you may find helpful:

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Filing for bankruptcy can be a scary process, and it’s natural to want to do anything possible to avoid it. If you’re feeling overwhelmed by your debts and worried about the future, selling your home may be the best solution for you. Working with a trusted home buyer can get the peace of mind you deserve and avoid going through bankruptcy. Contact us today to learn more about how we can help you sell your home quickly as-is, without agent fees, and hassle-free!


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