Bankruptcy FAQ

Will filing for bankruptcy stop collection activities against me?

Yes. One of the most compelling reasons for filing for bankruptcy is the automatic stay — a legal injunction that stops creditors from taking collection actions against you. As soon as you file, the automatic stay goes into effect, legally barring your creditors from garnishing your wages, seizing your property or even contacting you at all (communications will go through your attorney.)

What is the difference between Chapter 7 and Chapter 13 bankruptcy?

Chapter 7 bankruptcy is generally reserved for people struggling with large amounts of unsecured debt such as credit card and medical bills, and who do not have the means to repay their debts. In a Chapter 7 bankruptcy, the debtor’s assets are liquidated to pay off creditors, although many assets and possessions are exempt from liquidation. At the end of Chapter 7, most debts are discharged, leaving the person who filed with a clean financial slate.

Chapter 13 bankruptcy is called “reorganization” because it allows the debtor to keep property while paying back creditors in accordance with a payment schedule. Chapter 13 stops foreclosures and other collection actions and is often a good option for people who have fallen behind on mortgage payments but want to keep their home. Chapter 13 is typically suited toward people who are struggling with debt but who also have the means to adhere to a payment plan that lasts up to five years.

Will I lose my property if I file for Chapter 7 bankruptcy?

Generally speaking, most people who qualify for Chapter 7 bankruptcy have little or nothing to lose, because the property they own falls under the Massachusetts bankruptcy exemptions. That being said, if you do own nonexempt property, it will be sold off under Chapter 7, and the proceeds used to pay your creditors. The answer in your situation depends upon many number of factors, including your income, assets and total debt burden.

Does bankruptcy wipe out all debt?

Bankruptcy wipes out most, but not all debt. For instance, child support and alimony are not dischargeable. Newer tax debt is not dischargeable, but tax debt from years in the past may be. Student loan debt is generally not dischargeable. Consult with an experienced bankruptcy lawyer to learn which of your debts are and are not dischargeable in bankruptcy.

Will I ever get credit again?

Yes, provided you make the most of the second chance bankruptcy offers. If you file for bankruptcy, your credit will take a temporary hit. But if you are struggling with debt, it’s likely your credit is already poor. For many people with an unmanageable debt burden, bankruptcy is the only means of opening the door to restored credit. That restoration will require patience and financial discipline, but it is possible. After you file, credit offers will likely appear. By taking on new lines of credit and holding to a strict payment schedule, you can eventually climb your way back to a good credit score. That’s why bankruptcy law exists — to give good people who have fallen on hard times a fresh start.

Attorney Christopher Fein Is Here To Answer Your Questions

If you are struggling with debt in Braintree or anywhere in the surrounding area, you probably have many questions about how bankruptcy law applies to you. To learn how the law applies to your unique set of circumstances, contact Fein Law Office online or by telephone at 800-580-9173..

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.