What is Bankruptcy all about ?
Well, let me tell you a little bit about Bankruptcy. It’s really all about getting a fresh start. There are a lot of misconceptions. You don’t need to have a huge yard sale and sell all of your stuff, or keep the heat on 50 and eat beans out of a can by candle light. You can keep all of your possessions. You can keep your car and home if you are current on the payments. You can keep your golf clubs, your boat, your electronics, your computers etc. However, you need to be honest with the Attorney about all of your assets and liabilities so that The Firm can protect you.
A Chapter 7 Bankruptcy is called a liquidation bankruptcy. We discharge (get rid of) all of your unsecured debt. For example: Credit cards, utility bills, medicals bills, old cell phone bills, rent bills etc. The entire process takes 90 days. We give you a check list of all of the things that you’ll need to gather for us, 2 years of tax returns, 90 days of paystubs, etc. We take that information and put it into our computer program. Once your petition is ready you go over the petition with the Attorney. You sign your name on certain pages giving us permission to file it. We then upload it to the court. All of your personal information is reduced down to the last 4 digits.
Within 30 days there is what’s called a 341 Trustee meeting. You either go to Worcester or Boston to attend with the Attorney. It takes place in a large waiting room. Everyone there is there for the same reason… Bankruptcy. No one is there for divorce, or contract disputes. You sit at a table with your attorney and the Trustee will ask you questions on the record. The trustee is a person who is appointed by the court to over see the proceeding and make sure all of the paperwork is correct. He will ask you various questions like are you married, do you have any children, what do you do for work, have you purchased or sold any property in the last 10 years, do you have a 401k, life insurance, unclaimed casino chips, do you have any claims to sue anyone, is anyone suing you, etc. After that meeting, we wait 60 days, and you get your discharge in the mail. It’s a very very simple straight forward process. Its pretty much all paperwork, like filing for your taxes.
A chapter 13 bankruptcy is a re payment plan, either over 3 years or 5 years, where you pay a percentage of your debt back, usually 10-20%. It’s usually for people who are behind on their secured assets like their home or car. Or for people who make too much money and don’t qualify for a Chapter 7. You continue to make your monthly payments every month, and also pay back a portion of what you owe. For example, if you are $30,000 behind on your mortgage, then you would continue to pay your monthly payment, and then you would divide $30,000 by 60 months (5 years) which would make your monthly payment $500 per month.