Nicholas F. Ortiz, Esq. and John O'Donnell, Esq. Boston Bankruptcy Lawyers 306 Dartmouth Street Boston, MA 02116 ~and~ 270 Broadway Revere, MA 02151 ~and~ 1 Adams Place Quincy, MA 02169 Phone: (617) 716-0282 Email: attorney@bkmass.com Experienced, Effective, and Affordable Consumer and Business Bankruptcy Lawyers in Massachusetts Main Office two blocks from MBTA Copley Stop in Boston's Back Bay.   Reviews from Our Clients   Site Map (Internal Navigation)  Home  Free Bankruptcy Consultation  Client Testimonials  About Us  Chapter 7 Bankruptcy  Chapter 13 Bankruptcy  Chapter 7 or Chapter 13 Bankruptcy?  Business Bankruptcy in Massachusetts  Credit After Bankruptcy  Divorce and Bankruptcy  Bankruptcy Fees and Costs  Foreclosure and Bankruptcy  Loan Modifications and Bankruptcy  Car Repossession in Massachusetts  Fight Abusive Debt Collection  Non-Bankruptcy Alternatives  Massachusetts Bankruptcy Blog   Suggest a Question: Didn't answer all your questions about this topic? Suggest a question here and we'll try to put an answer on this page. Enter your email if you want to be notified if we post an answer to your question (optional):

Chapter 7 Bankruptcy in Massachusetts Last Edited: 1/3/2012 Chapter 7 is the most common type of bankruptcy for individuals. Unlike in Chapter 13, you do not pay part of your debts back in monthly installments. If you qualify for Chapter 7 and comply with the procedures and disclosure requirements, most of your debts are discharged.   Qualifying for Chapter 7: It is only fair for people who cannot afford their debts to be eligible for Chapter 7.  So, you must qualify.  The general rule is that if you can afford to pay part of your debts, you must do so in Chapter 13 bankruptcy, which has many advantages of its own.  The Bankruptcy Means Test: There are two ways that the bankruptcy system decides if you qualify for Chapter 7.  The main one is the means test.  Only certain people are even subject to the means test.  If you make more than the median income (by family size) you must take the means test.  If you make less, you do not have to.  Currently, these are the median income figures by family size in Massachusetts. In Massachusetts, here's the median income by family size (for cases filed after November 1, 2011): Family of one: $53,496 Family of two: $64,174 Family of three: $80,337 Family of four: $99,067 Add $7,500 for each additional family member. If you are subject to the means test, you often will not qualify for Chapter 7.  However, this is not cut and dry.  It depends on the amount of your secured debt payments, county of residence, whether you are married, medical issues, and a variety of other factors.  These items are factored into your means test and, in part, determine if you "pass."  If you want to know, contact us and we'll go over your details and let you know. Even if you "pass" the means test or do not have to take it all, there remains what is known as the totality of the circumstances tests under Section 707(b)(3) of the Bankruptcy Code.  This test asks the basic question from a less technical perspective and can, at times, require that even people below the median income file Chapter 13 instead of Chapter 7.   We will tell you if this test will affect you during a consultation. What Debts are Discharged in Chapter 7? Most debts are discharged in Chapter 7.  Credit cards, unsecured personal loans, medical debt, car repossession deficiencies are examples of the types of debts that are generally dischargeable. What Debts are not Discharged in Chapter 7? Not all debts are discharged in Chapter 7.  Student loans, recent taxes, and most divorce-related debts are a few examples.. Credit: Chapter 7 stays on your credit report for ten years from the date of filing.  This does not destroy your credit for the whole ten years.  Most people think it does.  What it does do is put a negative mark on your credit for the ten-year period.  As time passes the weight given to the bankruptcy by the credit bureaus gets lighter--after ten years it's gone completely. Assets in Chapter 7: Chapter 7 is a liquidation.  What this means is that, in theory, you give up all of your non-exempt property for a discharge of your debts. In reality, most people have so little property that they do not have to give up any of it in Chapter 7.  It is all exempt. If you do have assets that are not exempt and want to keep them, you cannot do so in a Chapter 7 and will need to file a Chapter 13.  You can learn what will happen to your assets in a Chapter 7 bankruptcy by calling us and answering all of our questions honestly. What Chapter 7 Can't Do: In Chapter 7 cases you cannot stop foreclosures by curing mortgage arrears like you can in Chapter 13 cases.  You can also not cram down car loans, strip off wholly unsecured second and third mortgages, and pay off nondischargeable tax debts.  Chapter 13 offers more flexibility and options, which is one of its chief advantages over Chapter 7.  However, sometimes Chapter 7 is the perfect remedy to financial problems that you just can't fix any other way.     Here is some information on choosing between Chapter 7 and Chapter 13 bankruptcy.  Read the Top 10 Questions about Bankruptcy in Massachusetts.  Bankruptcy Client Testimonials.  About Ortiz & O'Donnell.  Request Free Phone Consultation or call (617) 716-0282.