Frequently Asked Questions

Massachusetts, New Hampshire, Maine & Rhode Island Bankruptcy Attorneys

WHAT IS BANKRUPTCY?

Contact us NOW for immediate help with your Chapter 7 or Chapter 13 Bankruptcy.

WHO CAN FILE A BANKRUPTCY?

DO I NEED A LAWYER TO FILE FOR BANKRUPTCY?

For these very reasons, it is very important that a person considering filing a Bankruptcy case first obtain the advice of a competent and experienced Bankruptcy attorney. FAMILYLEGAL offers a FREE initial Bankruptcy Consultation which should last about one (1) hour with an experienced and qualified Bankruptcy Attorney. During this Consultation, we will discuss with you your debts, your assets and the different options that are available to you. There is NO obligation resulting from this FREE initial consultation

Contact us NOW for immediate help with your Chapter 7 or Chapter 13 Bankruptcy.

WHAT IS THE DIFFERENCE BETWEEN THE SERVICES THAT AN ATTORNEY AT FAMILYLEGAL CAN PROVIDE FOR ME AND A BANKRUPTCY PETITION PREPARER ?

WHAT WOULD I NEED TO BRING WITH ME FOR MY FREE INITIAL CONSULTATION?

• You should try to bring the following documents:
• Your last Six (6) months of Pay Stubs/Advises
  for self employed people, we will need your Profit-and-Loss statement (money in and money out) for the Six (6) months prior to the time of your appointment;
• Your last Six (6) months of Bank Statements – ALL accounts;
• Your last Two (2) years of Income Tax Returns, and;
• ALL of your bills, collection notices, law suits, foreclosure notices, repossession notices, etc., you can find relative to any debts which you owe.
• If you already have any of the following documentation, it is advisable for you to bring it with you:
• A recent (within last Six (6) months) Market Analysis or Appraisal of any real estate in which you have an interest;
• Your last 401K, IRA or retirement statement, and;
• Copies of any Trusts for which you are a beneficiary.

WHAT ARE THE DIFFERENT CHAPTERS I CAN FILE UNDER?

Chapter 7 is a a liquidation case. In a Chapter 7 case, the Court will appoint a Trustee to see whether the Debtor has anything over and above the exemption amounts provided for under State Statute or Federal Law. If the Debtor does have something above and beyond the list, then the Trustee can sell the item and use the money to pay so much on the dollar to creditors. If the Debtor does not have anything over the exemptions, then the Trustee will report to the Court that it is a No Asset case, meaning no assets will be taken for the benefit of creditors.

The experienced Bankruptcy Attorneys at FAMILYLEGAL will be able to inform you as to what assets are protected and whether any assets you own may be subject to liquidation by the Chapter 7 Trustee. The exemptions for New Hampshire, Massachusetts, Maine & Rhode Island are generally liberal, so you should not be afraid to FREEly and fully explain all of the assets you have to the Attorney that meets with you at FAMILYLEGAL.

At the conclusion of the case, the Debtor gets a Discharge, which means that the Debtor does not have to pay most types of debts. Corporations and partnerships do not receive Discharges. Consequently, any individuals legally liable for the partnership=s or corporation=s debts will remain liable. Therefore, individual Bankruptcies may be required as well as the corporation or partnership Bankruptcy when an individual owns a business.

Chapter 9 is only for municipalities and governmental units, such as schools, water districts, and so on.

Chapter 11 is the reorganization Chapter available to businesses and individuals who have substantial assets and/or income to restructure and repay their debts. Creditors vote on whether to accept or reject a plan of reorganization which must be approved by the Court. In addition to the filing fee paid to the Clerk, a quarterly fee shall be paid to the U.S. Trustee in all Chapter 11 cases. There is no debt limit under Chapter 11. To qualify as a small business chapter 11, the debtor must be engaged in commercial or business activities, other than the ownership of real property, and the total of its secured plus unsecured debts must be less than $2,190,000. Chapter 12 offers Bankruptcy relief to those who qualify as family farmers or family fishermen. There are debt limitations for Chapter 12, and a certain portion of the Debtor's income must come from the operation of a farming or fishing business. Family farmers and family fishermen must propose a plan to repay their creditors over a period of time from future income and it must be approved by the Court. Plan payments are made through a Chapter 12 Trustee who also monitors the Debtor's farming or fishing operations while the case is pending.

Chapter 13 is the debt repayment Chapter for individuals with regular income whose debts do not exceed $1,347,550 ($336,900 in unsecured debts and $1,010,650 in secured debts), including individuals who operate businesses as sole proprietorships. It is not available to corporations or partnerships. Chapter 13 generally permits individuals to keep their property which is otherwise subject to liquidation in a Chapter 13 by repaying creditors out of their future income. Each Chapter 13 Debtor proposes a repayment Plan which must be approved by the Court. The amounts set forth in the Plan must be paid to the Chapter 13 Trustee who distributes the funds for a percentage fee. Many debts that cannot be Discharged can still be paid over time in a Chapter 13 Plan. After completion of payments under the Plan, Chapter 13 Debtors receive a Discharge of most debts.

People that typically file a Chapter 13 are:

• People that have a lot of income left over after payment of their expenses and are thus going to have a problem doing Chapter 7;
• People that have fraud issues with a Chapter 7 or issues with a divorced spouse and have money to do a Chapter 13;
• People that have problems with IRS;
• People that are facing a foreclosure on their home and want to keep the home. In that case they come up with a Plan to pay their mortgage arrearages as part of their Chapter 13 Plan, then keep up with their normal payments outside of their Plan;
• People that want to do a cramdown on a vehicle loan. What that means is that if the Debtor has a vehicle loan which greatly exceeds the value of the vehicle, in some instances they can pay the value of the vehicle rather than the total amount due under their Chapter 13 Plan;
• People that may be able to strip their second mortgage, and;
• People that do not qualify for filing a Chapter 7.

Chapter 15 is a new Chapter to deal with insolvency cases involving Debtors, assets, claimants, and other parties in interest in more than one country. If you have assets in different countries, it is very important that you raise it with the attorneys and staff at FAMILYLEGAL.

Contact us NOW for immediate help with your Chapter 7 or Chapter 13 Bankruptcy.

WHICH CHAPTER IS RIGHT FOR ME?

In general, Chapter 7 is utilized when a person has insufficient income to pay all or most of his/her debts. Otherwise, if the person has sufficient income or property and can afford to pay all or a substantial portion of his/her debts, Chapter 11, 12, or Chapter 13 may be appropriate depending on whether the Debtor is an individual, partnership, corporation, or family farmer or fisherman.

HOW DO THE RECENT CHANGES IN THE BANKRUPTCY LAW AFFECT ME?

• You Have To Take Mandatory Pre-Bankruptcy Credit Counseling: All individual Debtors must undergo credit counseling from an approved counseling agency within 180 days before filing for Bankruptcy. There are certain exemptions to the requirement in that they Court may grant an exception due to incapacity or disability, or because you are on active military duty in a combat zone. The Court can also, if there are exigent circumstances that merit a waiver of the Pre-Bankruptcy counseling requirement and the Debtor was unable to get counseling services within 5 days after requesting it, allow the debtor 30 days from the filing of the petition to comply with the credit counseling requirement. You should talk to your attorney at FAMILYLEGAL about any special circumstances that you have which may effect your ability to take the Pre-Bankruptcy counseling. The Attorneys at FAMILYLEGAL have brochures from several providers offering the course via internet, in person or over the telephone. Many of the counseling agencies also offer counseling in several different languages. There are also special provisions for the deaf and blind.
• You Have To Take a Mandatory Debtor Education Course after Filing: All individual Debtors must complete a Personal Financial Management (or Debtor Education) course before they will be granted a Discharge. This Debtor Education course is separate from and required in addition to Pre-Bankruptcy credit counseling. Many of the same providers that offer the first course offer the second course and some offer discounts if you take both programs through their office. Please be sure to ask the experienced attorneys and staff at FAMILYLEGAL about those providers. Also, again, several providers offer the course via internet, in person or over the telephone. Many of the counseling agencies also offer counseling in several different languages. There are also special provisions for the deaf and blind.
• Documentation must be provided to your Bankruptcy Trustee at least 7 Days Before the First Meeting of Creditors: All individual Debtors must supply documents to the Chapter 7 or Chapter 13 Trustee at least 7 days prior to the Meeting of Creditors. If you hire the experienced Bankruptcy Attorneys at F FAMILYLEGAL, we take care of providing all of the necessary paperwork to the Bankruptcy Trustee well in advance of your scheduled Meeting.
• You must now pass a Means Test to file for bankruptcy if your debts are primarily consumer related: Individual Debtors who file a Chapter 7 Bankruptcy Petition must file a new form which will give detailed information about their income for the purpose or determining whether a Debtor's filing represents an abuse of the Bankruptcy system. People now need to qualify to file for Bankruptcy protection. Some Debtors may be prohibited from filing a Chapter 7 case if their income would permit them to make payments to their creditors. The experienced Bankruptcy Attorneys at FAMILYLEGAL take all of the guess work out of that for you. We complete the forms and determine your eligibility to file for Bankruptcy protection.

DO I NEED TO FILE BANKRUPTCY WITH MY HUSBAND/WIFE?

WHAT IF I HAVE A CO-SIGNOR FOR ANY OF MY DEBTS?

HOW LONG WILL A BANKRUPTCY STAY ON MY CREDIT REPORT?

HOW WILL A BANKRUPTCY EFFECT MY ABILITY TO GET CREDIT IN THE FUTURE?

However, it is important to consider the status of your overall credit now. If your credit is perfect right now, then it will absolutely have a negative affect on your credit. If your credit is damaged now, it may be one of the best things you can do to improve your credit and your credit score because after your case is discharged you are many times, debt FREE, making your ability to pay new creditors better than before and therefore a good credit risk. Also, you cannot file for Chapter 7 Bankruptcy again for eight (8) years and sometimes creditors see you as a good credit risk after you obtain a discharge from Bankruptcy than someone else that may be coming through the door asking for credit.

WILL CREDIT COUNSELING LOOK BETTER ON MY CREDIT REPORT?

WHAT HAPPENS TO MY SECURED DEBT IN A BANKRUPTCY?

Bankruptcy does not allow you to Discharge the secured debt and keep the security. This means that you cannot Discharge the mortgage, not pay for it and then keep the house. The same goes for your car or most other secured debt.

In a Bankruptcy, you must indicate whether you wish to reaffirm your debt with the lender or surrender the security back to the lender. The experienced Bankruptcy Attorneys at FAMILYLEGAL will assist you in deciding what is best for you in determining what to do with a secured debt. Contact us NOW for immediate help with your Chapter 7 or Chapter 13 Bankruptcy.

WHAT IF I HAVE A FORECLOSURE SCHEDULED?

In a Chapter 13 case, you can file a Chapter 13 Plan whereby you make regular monthly mortgage payments and then plan payments in which you pay back your mortgage arrearage over a period of 36 months (3 years) or 60 months (5 years).

WHAT IF I HAVE AN ATTACHMENT AGAINST MY HOUSE?

CAN MY BOSS FIRE ME FOR FILING FOR BANKRUPTCY?

WHEN DO I NEED TO COMPLETE MY PRE-BANKRUPTCY/PRE-FILING COURSE?

DO I HAVE TO LIST ALL OF MY DEBTS AND ASSETS ON THE PETITION?

WHAT HAPPENS AFTER I FILE BANKRUPTCY?

There are many exceptions to the automatic stay, including but not limited to:

• Termination of the stay against the Debtor on the 30th day after the filing of a new case if the Debtor had a prior case dismissed within One (1) year of filing the present case. (The stay can be extended by the Court with a showing of good cause.
• Commencement or continuation of a civil proceeding regarding child custody or visitation, domestic violence, alimony or the dissolution of marriage, but not division of property.
• Continuation of an eviction or unlawful detainer action involving a residential lease. However, there are ways to allow for you to stay in your apartment for a short period of time if your landlord has a judgment against you. Please be sure to raise this with an experienced Bankruptcy Attorneys at FAMILYLEGAL during your Consultation.

In a Chapter 7 case involving an individual Debtor, the creditors generally have sixty (60) days from the first date set for the Section 341 Meeting of Creditors to object to the Discharge of the debtor and/or the Dischargeability of a specific debt. If the deadline passes without any objections to the Debtor's Discharge being filed, the Court will issue the Discharge Order. If any objections to the Dischargeability of specific debts are filed, they will be heard by the Court. If there are no assets from which a dividend can be paid to Creditors, the Trustee will prepare a report of no distribution and the case will be closed. If there are assets that are not exempt, funds will be available for distribution to Creditors. The Court will set claims deadlines and notify all creditors to file their claims. The Trustee will proceed to collect the assets, liquidate them and distribute the proceeds to creditors. When the assets have been completely administered, the Court will close the case.

In a Chapter 13 case, Creditors are given an opportunity to object to the Plan. If no objection is filed by Creditors or the Trustee, the Plan may be confirmed as filed. Once the Plan is confirmed, the Trustee will distribute the proceeds of the Debtor's plan payments to Creditors until the Debtor completes the Plan or the Court dismisses or converts the case. The Creditors generally have sixty (60) days from the first date set for the Section 341 Meeting of Creditors to object to the Dischargeability of a specific debt. Upon completion of the Chapter 13 plan, the Court will issue a Discharge Order, the Trustee will prepare a Final Report, and the case will be closed.

Contact us NOW for immediate help with your Chapter 7 or Chapter 13 Bankruptcy.

IF I HAVE A COURT CASE PENDING WITH A CREDITOR WHEN I FILE, HOW DO I TELL THE COURT THAT I FILED?

WHO IS THE BANKRUPTCY TRUSTEE?

WHO IS THE U.S. TRUSTEE?

DO I HAVE TO ATTEND MY 341 MEETING?

WHAT HAPPENS AT THE 341 CREDITORS' MEETING?

• The Trustee will ask for a picture identification and something with the Debtor's social security number on it. The Debtor needs to bring those things with them to the Meeting;
• The Trustee will ask the Debtor whether they rent or own where they live. If the Debtor owns their real estate, the Trustee will ask how the debtor came up with the value. We always think its a good idea for the Debtor to have a market analysis done on their property prior to filing;
• The Trustee will ask the Debtor if they paid any one Creditor more than $600.00 within the 90days before Bankruptcy. If that occurred and it was not an ordinary payment, the Trustee can seek to avoid it. What that means, if is that if the Debtor made a large payment to a Creditor prior to filing, the Trustee can say that the Debtor preferred that Creditor over all of the others and seek to get that payment back and distribute it fairly amongst everybody that is a Creditor of the Debtor;
• The Trustee will ask the Debtor if they transferred any assets to anybody within the last 4 years. If they did, the Trustee can examine whether it was for fair market value. If not, the Trustee can have that transfer set aside and resell the property for fair market value for the benefit of Creditors;
• The Trustee will ask the Debtor if they gave any money or property to a family member within the one year before Bankruptcy. If they did, the Trustee can go after that and again, use any money that he gets for the benefit of Creditors and pay them so much on the dollar;
• The Trustee will ask the Debtor if they have any business interests. If they do, he/she will want to know if there are any assets, accounts receivable, etc;
• The Trustee will ask the Debtor if they have any claims against anyone. If the Debtor has anything like that, then they can no longer pursue it, unless the Trustee abandons it. The only one with standing is the Chapter 7 Trustee (unless he/she abandons it) & he/she can settle the case for whatever he/she thinks is fair use the money from same to pay Creditors so much on the dollar;
• The Trustee will ask the Debtor if they are the settler or beneficiary of any trust. If there is a spendthrift provision, then in many instances the Trustee cannot take it, if not the Debtor loses the money they would get from it;
• The Trustee will ask the Debtor whether they took any cash advances off of their credit cards within the one (1) year before the Bankruptcy. If they did, the Trustee will want to know what happened to the money;
• The Trustee will also ask the Debtor whether they did any balance transfers within the 1 year before the filing, and;
• The Trustee can ask anything else they want as well if it pertains to the Debtor's financial situation.
• Creditors can appear and ask the Debtor questions about his/her financial situation, but most of the Creditors do not appear.
• Contact us NOW for immediate help with your Chapter 7 or Chapter 13 Bankruptcy.

WHAT CHOICES DO I HAVE RELATIVE TO A SECURED DEBT, LIKE A CAR LOAN OR A MORTGAGE?

• You can surrender the security back to the lender and Discharge the debt.
• Or, you can reaffirm the debt. If the Debtor would like to keep a debt, the Debtor can reaffirm the debt obligation. What that means, is that if you would like to keep a debt, the experienced Bankruptcy Attorneys at FAMILYLEGAL will write to the creditor when the Petition is filed to tell them that the Debtor would like to keep a debt and request a Reaffirmation Agreement. The creditor will then generally send a Reaffirmation Agreement. They are not required to do so, but usually do. In that case if the Debtor signs the Reaffirmation Agreement, it is like they never filed for bankruptcy on the debt which means that if they are not able to pay it, the Creditor will be able to take their property (as applicable) and collect on the debt, so if you want to reaffirm a debt obligation you have to make really sure that you can make the required payments.
• If the security is personal property, the Debtor can redeem the property. The other option is to redeem property from a secured debt. What that means is that if you own a car or some other sort of personal property and the value of the property is less than what you owe, you can pay the creditor a lump sum payment to keep the security. In order to redeem, the Court will require a Motion To Redeem for the judge to decide whether it is fair. The loan has to be at least 910 days old in order for you to redeem.

CAN I KEEP ANY OF MY CREDIT CARDS?

WHEN DO I NEED TO COMPLETE MY PRE-DISCHARGE COURSE?

WHAT IS A DISCHARGE?

• The Debtor is not an individual; or
• A complaint objecting to the Debtor's Discharge has been filed; or
• A Motion To Extend the time for filing a complaint objecting to the Debtor's Discharge is pending; or
• The Debtor has filed a waiver of Discharge; or
• A Motion To Dismiss the case for substantial abuse is pending; or
• A Motion To Extend the time for filing a Motion To Dismiss the case for substantial abuse, is pending; or
• The Debtor has not filed their require Debtor Education Certificate.

WHAT DEBTS ARE DISCHARGEABLE?

• Debts not listed on the Debtor's bankruptcy schedules;
• Certain taxes and fines;
• Debts created through fraudulent conduct or by providing false information to a creditor;
• Alimony, child maintenance or support, and certain debts arising out of a divorce decree or separation agreement;
• Debts from willful or malicious injury to another;
• Most student loans;
• Debts caused by the death or personal injury related to the operation of a motor vehicle while the Debtor was intoxicated;
• Post bankruptcy condominium or cooperative owners= association fees;
• Credit card charges of $500.00 or more for luxury goods or services within 90 days prior to the Bankruptcy filing, and;
• Cash advances of $750.00 or more within 70 days of the filing of the Bankruptcy Petition.
• Some debts such as those based on fraudulent conduct, embezzlement or willful and malicious injury to another, are discharged unless a complaint to deny discharge of that debt is timely filed with the Bankruptcy Court. Ordinarily, these complaints must be filed within sixty (60) days of the first date set for the Section 341 Meeting of Creditors.
• Additionally, certain debts that were not listed on your bankruptcy schedules or that were incurred after you filed Bankruptcy are generally not discharged.

AFTER MY CASE IS CLOSED BY THE COURT, CAN IT BE REOPENED?

• If the Debtor fails to list an asset, anyone can tell the Bankruptcy Court. In some instances, the Bankruptcy Court can then set aside the Debtor's Discharge. The Debtor can then be prosecuted for Bankruptcy crimes and can go to jail. Bad things happen if you are not truthful on your Bankruptcy schedules so it is very important that you share all information with your Attorney at FAMILYLEGAL and make sure all of your Bankruptcy schedules are accurate and complete before they are filed;
• If the Debtor fails to list a debt, the Debtor can ask the Court to reopen their case, but the Court will charge a reopening fee of at least $260.00, plus we have fees so the Debtor should list all of their debts the first time around on their Bankruptcy petition, and;
• If the Debtor gets the right to receive an inheritance, the proceeds of a life insurance policy or a property settlement from a divorce within 6 months from the date that they filed for Bankruptcy that will jump back to their Bankruptcy estate and be used to pay debt. So if that happens, it is very important that you share the information with the staff and Attorneys at FAMILYLEGAL so that they can inform the Court. If the Court is not informed, the Court may revoked your Discharge and refer you for criminal prosecution.

At FAMILYLEGAL, your initial Consultation with one of our highly skilled Bankruptcy Attorneys is always FREE. Contact us NOW for immediate help with your Chapter 7 or Chapter 13 Bankruptcy.

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Please take a few minutes to explore the Biographies of our highly skilled and experienced Bankruptcy Attorneys. If you are facing foreclosure, harassing creditors, or overwhelming debt, we encourage you to Contact us to schedule a FREE initial Consultation with one of our experienced Bankruptcy Attorneys at one of our Ten (10) convenient office locations. There is no obligation. However, this FREE initial Consultation allows our Attorneys the opportunity to review your current financial situation, and offer you appropriate and effective options to meet your needs.

At FAMILYLEGAL, your initial Consultation with one of our highly skilled Bankruptcy Attorneys is always FREE. Contact us NOW for immediate help with your Chapter 7 or Chapter 13 Bankruptcy.