Bankruptcy Lawyer in Peabody

Filing for bankruptcy allows an individual, married couple and small business to eliminate or reduce their debt (often called “discharging debt”). In bankruptcy, there are two types of debt: secured debt (such as taxes, alimony, child support, student loans, or criminal fines or restitution), and unsecured debt (such as credit card debt, medical bills, old income taxes, civil judgments, or personal loans). For individuals and married couples, there are two common types of bankruptcy: Chapter 7 and Chapter 13.

The most common form of bankruptcy, filing under Chapter 7, discharges your personal liability to pay all unsecured debt. If you file Chapter 7 bankruptcy, you usually get to keep most of your property (although, sometimes, non-exempt property is at risk of being sold by a bankruptcy trustee, but, usually, this is not the case and your attorney can tell you in advance if your assets are at risk and which assets are at risk) and your creditors can no longer sue you. Not everybody qualifies for Chapter 7.

If, according to the IRS, your annual income is below the median income for your area and household size, you’re probably eligible. If, however, your annual income exceeds the median income, eligibility is mostly determined by the “means test”, which is a complex calculation based on your income. This means test is used to determine if your financial situation qualifies you for bankruptcy, or to determine whether you must file under Chapter 7 or Chapter 13.

A bankruptcy lawyer could advise their client on whether they qualify for Chapter 7, when the most advantageous time to file is, and whether the debtor’s assets (such as your home) are safe from being sold by a bankruptcy trustee.  Filing for Chapter 7 bankruptcy can be a complicated process. KONSTANTILAKIS LAW PC understands how stressful financial difficulties can be on you and your family, and  it’s our goal to not only ensure that a Chapter 7 filing is the most beneficial option for you, but also to make sure the filing succeeds with minimal risk to your assets.

Many people file for Chapter 13 bankruptcy if they’re facing a foreclosure. In Chapter 13, you usually propose a plan for restructuring your debt, and usually you pay back less than 100% of your original unsecured debt amount. The result can be that you can keep your home and, after as little as 36 months of sticking to your payment plan, your unsecured debt could be gone.

Bankruptcy tries to give individuals and families overwhelmed by debt a “fresh start” on their finances.  Bankruptcy laws can be confusing and are constantly evolving, so it’s important that you consult with a bankruptcy lawyer up to date. Filing for bankruptcy involves a lot of paperwork, and a mistake on a form could have drastic consequences on your financial future. It’s beneficial to have an experienced and knowledgeable bankruptcy attorney to help guide you through this process.

Chapter 13, also called the “reorganization” bankruptcy or the “wage earner’s plan”, has similarities to a debt repayment plan for consumers.  Chapter 13 could offer advantages over Chapter 7 if the individual filing for bankruptcy is a homeowner.  By filing under this chapter, many homeowners can stop the foreclosure process (though they must make all mortgage payments on time once under the Chapter 13 plan).