The Quickest Way to Get a Fresh Financial Start
For most people, Chapter 7 bankruptcy is the fastest and simplest way to discharge debts and get a fresh financial start. From start to finish, filing Chapter 7 bankruptcy usually takes about six months. Upon filing bankruptcy, an automatic stay enters. The automatic stay is the law that stops all collection efforts such as harassment from debt collectors, garnishment, repossession, litigation and foreclosures. At the end of the process, your unsecured debts, such as credit card bills and medical bills that are not secured by property, will be discharged.
I am Neil Warrenbrand, a bankruptcy attorney with an office in Boston and meeting locations throughout the Greater Boston, Metro West and North Shore areas, who helps individuals file Chapter 7, as well as other forms of bankruptcy. I offer a free initial consultation to discuss your financial situation and determine if filing Chapter 7 bankruptcy is the best option for you.
Can I File Chapter 7 Bankruptcy?
The biggest change for individuals brought by the 2005 amendments to the Bankruptcy Code is that now individual debtors with mostly consumer debt must qualify by passing a financial means test to file a Chapter 7 bankruptcy. If you do not qualify to file bankruptcy under Chapter 7, you may still file bankruptcy under Chapter 13 of the Bankruptcy Code.
What Is Household Median Income?
A debtor whose household income falls below the median income for Massachusetts automatically, except in rare circumstances, qualifies to file a Chapter 7 bankruptcy. Median income is reported by the United States Census Bureau. For cases filed after April 1, 2017, the median income for a one person household in Massachusetts is $61,102. For a family of four, it is $113,651.
If your household income is less than the median income for Massachusetts for a family of your size, you can file Chapter 7 bankruptcy. The median income for a family of your size as well as all of the means testing information can be found at the following web site: http://www.justice.gov/ust/eo/bapcpa/meanstesting.htm.
If your household income is more than the median income for Massachusetts, you must complete a second part of the test which deducts your allowable expenses from your income. In general terms, if your available income after expenses allows you to pay 25 percent of your unsecured creditors in the case, or $7,700, whichever is greater; or $12,850 to your creditors over a 5 year period you may not qualify for Chapter 7. The means test is a complicated formula. It is important that you speak with an experienced bankruptcy lawyer to make sure that the means test is done properly and that you are taking advantage of all of your allowable deductions.
Credit Counseling and Financial Management Course
The 2005 amendments to the Bankruptcy Code require that individual (non-corporate) debtors take a credit counseling course with an approved agency prior to filing bankruptcy, as well as a financial management course after your case has been filed.
The certificates of completion must be filed with the Bankruptcy Court as a condition of filing your bankruptcy case and for getting your bankruptcy discharge. Joint debtors must each take the courses and file their individual certificates.
Additionally, you must not have had a bankruptcy discharge in a case filed in the last eight years. Most people with serious debt problems are eligible for filing Chapter 7 bankruptcy.
Learn More About Filing Bankruptcy
- Stopping a home foreclosure
- Taxes and bankruptcy
- Bankruptcy and your property
- Debts you can and cannot discharge
- Life after bankruptcy
Free Consultation With a Bankruptcy Attorney
If you wish to discuss Chapter 7 bankruptcy with a lawyer who provides experienced and compassionate representation, call 866-959-9065 or fill out the contact form on this Web site to schedule your free initial consultation. My office is conveniently located in downtown Boston and accessible by all T lines. I also have meeting locations throughout the Greater Boston, Metro West and North Shore areas.