Massachusetts Bankruptcy Attorneys

Nicholas F. Ortiz, Esq. and John O'Donnell, Esq. Boston Bankruptcy Lawyers 306 Dartmouth Street Boston, MA 02116 ~and~ 270 Broadway Revere, MA 02151 Tel: (617) 716-0282 Fax: (617) 507-3456 Email: nfo@mass-legal.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.

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Chapter 13 Bankruptcy in Massachusetts

Chapter 13 is a reorganization.  It is a court-approved partial repayment plan of debts that lasts three to five years. At the end of that time, any remaining balances are forgiven on most debts (credit cards, medical bills, unsecured personal loans, etc.)  Certain debts are not forgiven at the end of a Chapter 13, like student loans and recent tax debt.

In a Chapter 13 your lawyer proposes a plan that the Court approves.  This gives you the ability to do many things that are not possible in a Chapter 7.  For example, in Chapter 13 you can stop foreclosures by curing mortgage arrears, cram down car loans, strip off wholly unsecured second and third mortgages, and pay off nondischargeable tax debts.  The plan that you propose is based on what you want to accomplish and also on your income, expenses, assets and debts. 

Sometimes people file Chapter 13 because its the only type of bankruptcy they qualify for based on their income.  The law requires that most people who can afford to pay part of their debts do so in Chapter 13 instead of Chapter 7.  Most, but not all, people who are above-median income only qualify for Chapter 13. In Massachusetts, the median income by family size (for cases filed after March 15, 2010):

• Family of one: $53,315
• Family of two: $69,204
• Family of three: $82,297
• Family of four: $99,293
• Add $7,500 for each additional family member (for cases filed after April 1, 2010).

One of the bits of good news about Chapter 13 is that it stays on your credit report for seven instead of ten years, like a Chapter 7 case does.

Another common reason people file Chapter 13 instead of Chapter 7 is to keep property they would otherwise lose in a Chapter 7.  No one loses property in a Chapter 13: It is not a liquidation chapter. However, most people have such limited property that they would keep it all even in a Chapter 7.  But that's not always the case.  Some people do have non-exempt property--like excess equity in houses or cars--and do not want to risk losing in a Chapter 7.  If these people still need relief from debt, the best way to get it is sometimes through a Chapter 13 bankruptcy.

Here is some information on choosing between Chapter 7 and Chapter 13 bankruptcy.

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