Kelsey & Trask, P.C. - Chapter 7, Bankruptcy Attorney, Natick and Wellesley, Massachusetts

Below we have provided answers to many of the common questions that we are asked by our clients regarding Chapter 7. If you would like more information please do not hesitate to call us at 508.655.5980 or e-mail us.

What is Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy, sometimes referred to as "liquidation", is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. Debtors whose debts are primarily consumer debts are subject to a "means test" designed to determine whether the case should be permitted to proceed under Chapter 7.

Under Chapter 7 you may claim certain property as exempt under the governing law. A trustee may have the right to take possession of and sell the remaining property that is not exempt and use the sale proceeds to pay your creditors.

What is the purpose of a Chapter 7 Bankruptcy filing?

The purpose of filing a Chapter 7 case is to obtain a discharge of your existing debts. If, however, you are found to have committed certain kinds of improper conduct described in the Bankruptcy Code, the Court may deny your discharge and, if it does, the purpose for which you filed bankruptcy will be defeated.

What kinds of debts are not discharged in Chapter 7 Bankruptcy?

Even if you receive a general discharge, some particular debts are not discharged under the law. Therefore, you may still be responsible for most taxes and student loans; debts incurred to pay non-dischargeable taxes; domestic support and property settlement obligations; most fines, penalties, forfeitures and criminal restitution obligations; certain debts which are not properly listed in your bankruptcy papers; and debts for death or personal injury caused by operating a motor vehicle, vessel or aircraft while intoxicated on alcohol or drugs. Also, if a creditor can prove that a debt arose from fraud, breach of fiduciary duty, or theft, or from a willful and malicious injury, the bankruptcy court may determine that the debt is not discharged.

How much does it cost to file for Chapter 7 Bankruptcy?

The Bankruptcy Court charges the following fees to file for Chapter 7 Bankruptcy:

Filing Fee of $245.00, plus
Administrative Fee of $39.00, plus
Trustee Surcharge of $15.00
TOTAL FILING FEE: $299.00

IMPORTANT NOTE: The above fees are in addition to any attorney's fees and/or fees for the preparation of the Bankruptcy Documents, appearance at a Section 341 Creditor's Meeting, or representation in Bankruptcy Court. Any fees for legal services must be agreed to in writing between you and your attorney prior to the commencement of any bankruptcy proceeding.

Can I file Chapter 7 Bankruptcy Even if I Have Filed Before?

Whether or not you may re-file (and the amount of time that must pass before you may re-file bankruptcy) depends on whether or not you received a discharge under your most recent bankruptcy filing.

If you received a discharge under a Chapter 13 bankruptcy case, then you cannot file for relief under Chapter 7 unless:

1. Six years have passed since the discharge in the Chapter 13 case; or
2. You paid at least 70 percent of your allowed unsecured claims in the Chapter 13 case, and your plan was proposed in good faith and represented your best effort to pay.

If you received a discharged under a Chapter 7 bankruptcy case, then you cannot file for relief under Chapter 7 unless eight years have passed since the discharge in the previous Chapter 7 filing.

If you filed a Chapter 7 or Chapter 13 case that was dismissed because you failed to obey court orders or you voluntarily requested a dismissal and did not obtain a discharge, then you cannot file for relief under Chapter 7 unless 180 days have passed since the dismissal of the previous filing.

Can a Court Deny my Discharge in a Chapter 7 Bankruptcy Case?

If you have tried to delay or defraud your creditors by transferring, hiding, or destroying your property within the 1-year period prior to filing a petition under Chapter 7 of the bankruptcy code, the Court may deny your discharge and, and, in its discretion, allow your creditors to recover any property transferred in the one year period.

What happens if I paid off all or some of my debts before I file for Bankruptcy? What is an "Insider"?

Any payments on debts owed to Insiders made at any time within the 1-year period prior to the filing of a Chapter 7 petition are considered to be an unlawful preference. The Bankruptcy Court, in its discretion, may recover all such payments and distribute them to your other creditors.

An "Insider" is any creditor who is also a relative by blood or marriage, or is a close business associate.

If you pay back any of your creditors, even one who is not an insider, at any time within the 90-day period prior to the filing of your bankruptcy case, the payment is an unlawful preference and the court may recover all such payments and distribute them to your other creditors. For a timeline of all events, and deadlines in a Chapter 7 case visit our Chapter 7 Timeline Calculator.

Do I need to take a credit counseling course before I can file for Chapter 7 Bankruptcy?

Yes. You must take a court-approved credit counseling course no more than 180 days before your bankruptcy filing. For more information on how to locate an approved credit counseling agency, contact us for a free initial consultation.

Do I need to be a resident of Massachusetts to file for Bankruptcy in Massachusetts?

You must be a resident of the state in which you intend to file your bankruptcy case for at least 90 days before filing your petition, or if you have not lived in your current residence for 90 days, then in the state in which you last resided (or had your principal place of business or where the majority of your principal assets are located) for a majority of the prior 180 days.

For example, if you moved to Massachusetts less than 90 days ago, you may only file your case in the state where you previously resided (or which had been the principal place of business or has been the location of your principal assets) for a majority of the prior 180 days.

Similarly, if you moved away from Massachusetts less than 90 days ago, but resided in Massachusetts for the majority of last 180 days, then you must file your petition in the Massachusetts bankruptcy court. For a timeline of all events, and deadlines in a Chapter 7 case visit our Chapter 7 Timeline Calculator.

What happens immediately after I file my Chapter 7 Bankruptcy?

Your case is formally commenced when you file your bankruptcy petition with the Massachusetts Bankruptcy Court, which is part of the United States District Court - District of Massachusetts. As soon as you file your petition, the court will enter an Automatic Stay Order prohibiting your creditors from taking or continuing any collection or legal action against you.

Within 7 to 10 days after filing your petition, the Court will mail the Notice of Commencement of Case to you and to all of the creditors listed in your petition. This notice will inform you of the date set by the court for the meeting of your creditors, and the deadlines for your creditors to object to your case and file their claims against you.

Additionally, the bankruptcy court will assign a bankruptcy trustee to oversee your case. The trustee is a federal employee appointed by the court to monitor your case and make sure you are eligible for bankruptcy. The trustee will review your petition, make sure that it is complete, and then schedule a meeting of your creditors.

If you had a prior bankruptcy case dismissed within one year of the time you file a Chapter 7 case, the Automatic Stay entered in the Chapter 7 case will be terminated within 30 days unless you can demonstrate that the Chapter 7 case was filed in good faith. For a timeline of all events, and deadlines in a Chapter 7 case visit our Chapter 7 Timeline Calculator.

What do I need to file with my Bankruptcy Petition? Are there any deadlines?

The bankruptcy court is very strict regarding deadlines. Often, missing a deadline will result in the dismissal of your Bankruptcy Case. Therefore, it is very important that all documents are filed accurately and on time with the Bankruptcy Court. For a timeline of all events, and deadlines in a Chapter 7 case visit our Chapter 7 Timeline Calculator.

No more than 15 days after filing the Chapter 7 petition, you must file all required financial schedules with the court. The Schedules are documents declaring your assets, liabilities, expenses, income, and a statement of your financial affairs, which is very similar to a budget sheet or an explanation of your personal finances. In most cases, these schedules are filed along with your petition. The schedules also set forth to the trustee and bankruptcy court what property is "exempt" (meaning you can retain the property following the conclusion of your case) and what property is "non-exempt", meaning it must be surrendered to the trustee for sale, with the proceeds used to pay any debts.

Within 30 days after you file your petition, or before the §341(a) meeting of your creditors (if that occurs first), you are required to file a Statement of Intention regarding the reaffirmation of secured debts. The statement of intention advises the court whether you intend to keep property that serves as collateral for your debts (called "secured property"), or whether you intend to surrender it to your creditors.

If you intend to keep the secured property, you must indicate your intention to: (1) reaffirm your debts and continue making all of your payments on those debts; or (2) redeem the property by paying the fair market value for it, in which case you will receive a discharge of debt owed over the fair market value of the item. You must serve a copy of your Statement of Intention on the bankruptcy trustee and your creditors at the time you file it with the court.

No more than 45 days after your Statement of Intention is filed, the petitioner must surrender or keep the secured property indicated in the Statement of Intention and to make all necessary payments.

At least seven days before this §341(a) Meeting of Creditors, you are required to provide to the Chapter 7 Trustee and any creditor requesting it a copy of your most recently-filed federal income tax returns and proof of income for the most recent 90-day period.

What Happens After My Case is Filed? Do I Need To Go to Court?

The court will hold the Meeting of Your Creditors (often referred to as a §341(a) Creditor's Meeting, in reference to the section of the Bankruptcy Code requiring such a meeting) about 30 to 45 days after your bankruptcy petition is filed. At least seven days before this meeting, you are required to provide to the trustee and any creditor requesting it a copy of your most recently filed tax returns and proof of income for the most recent 90-day period.

The court-appointed Chapter 7 trustee will preside over this meeting. At the meeting, which you are required to attend, you will be asked to testify under oath as to the accuracy of the statements in your petition. However, most of your creditors will not appear at the meeting, and you will not be before a judge. The meeting is very informal, and in most cases will last no more than 10 minutes. If you do not attend the meeting, your case will be dismissed.

Within 30 days after the first scheduled §341(a) Meeting of Creditors, the bankruptcy trustee and your creditors may object to some or all of your exemption claims, if appropriate.

Within 45 Days after the §341(a) meeting, you must complete an approved financial management course concerning personal financial management. This course requirement is separate from, and in addition to, the credit counseling course taken prior to the filing of your petition.

No more than 90 days after the §341(a) Meeting of Your Creditors, all creditors (with the exception of government entities) must file proofs of claim (documents creditors submit to the court specifying how much is owed) within 90 days after the first date set for your creditor meeting if they wish to share in the payments from your case, assuming there are any assets available for liquidation.

Under What Circumstances Can Creditors Object to the Discharge of a Debt?

A creditor may object to the discharge of amounts owed to them by the debtor under certain circumstances. If a creditor objects to the discharge of any of the debts listed in your petition or schedules, such objection must be raised within 60 days after the first scheduled §341(a) Meeting of Creditors. Alternatively, the trustee must move to dismiss your case within the 60-day period following the §341(a) Meeting of Creditors if he or she finds that the granting of relief would be an abuse of the provisions of Chapter 7.

If you incurred new debt of $500.00 or more for "luxury goods or services" within the 90-day period before your bankruptcy, or if you obtained a cash advance from a credit card or other loan in the amount of $750.00 or more within the 70-day period before your bankruptcy filing, that debt is presumed to be non-dischargeable, absent the debtor's showing to the contrary.

A creditor may object to your request to discharge a debt if the debt was obtained or incurred as a result of fraud, embezzlement or larceny, or any willful or malicious injuries you have caused others. If the Creditor establishes by a preponderance of the evidence that the debt was obtained by any of the above means, the debt will be deemed non-dischargeable.

Creditors may object to the discharge of certain debts if you have concealed or destroyed any property or financial records; made any false statements in connection with incurring a debt or other financial obligation; withheld financial or other material information; failed to explain losses; failed to respond to material questions permitted under the Federal Rules of Bankruptcy Procedure; or if you were granted a discharge with respect to that debtor in a prior bankruptcy case filed within the last 6 years.

When Will I Receive My Discharge?

You will receive your Chapter 7 discharge approximately 75 days after the §341(a) Meeting of Creditors, after the 60-day time period for objecting to discharge or moving to dismiss your case expires, provided no Creditor has objected to the discharge. Even if you receive your discharge, the trustee may move to set it aside if you do not turn over nonexempt property or if you commit other bankruptcy violations. For a timeline of all events, and deadlines in a Chapter 7 case visit our Chapter 7 Timeline Calculator.

Click here to learn more about Chapter 13 Bankruptcy.

508.655.5980

Connect with us

Download our iPhone Apps

Trask: Twitterfeed

Please wait while my tweets load

If you can't wait click below to:

connect with me on twitter

Kelsey: Twitterfeed

Please wait while my tweets load

If you can't wait click below to:

connect with me on twitter


	Use of the KelseyTrask.com Website is subject to the Terms of Use contained in the Disclaimer. Use of this Site indicates acceptance of these terms. The Content of this Site may be considered advertising for legal services under the laws and rules of professional conduct of the jurisdictions in which we practice.

	Kelsey & Trask, P.C. is a law firm located in Natick, MA that serves the Metro-West communities of Massachusetts and beyond including Norfolk County (Avon, Bellingham, Braintree, Brookline, Canton, Cohasset, Dedham, Dover, Foxborough, Franklin, Holbrook, Medfield, Medway, Millis, Milton, Needham, Norfolk, Norwood, Plainville, Quincy, Randolph, Sharon, Stoughton, Walpole, Wellesley, Westwood, Weymouth, and Wrentham), Middlesex County (Acton, Arlington, Ashby, Ashland, Ayer, Bedford, Belmont, Billerica, Boxborough, Burlington, Cambridge, Carlisle, Chelmsford, Concord, Dracut, Dunstable, Everett, Framingham, Groton, Holliston, Hopkinton, Hudson, Lexington, Lincoln, Littleton, Lowell, Malden, Marlborough, Maynard, Medford, Melrose, Newton, North Reading, Pepperell, Reading, Sherborn, Shirley, Somerville, Stoneham, Stow, Sudbury, Tewksbury, Townsend, Tyngsborough, Wakefield, Waltham, Watertown, Wayland, Westford, Weston, Wilmington, Winchester, and Woburn), Plymouth County (Abington, Bridgewater, Brockton, Carver, Duxbury, East Bridgewater, Halifax, Hanson, Hingham, Hull, Kingston, Lakeville, Marion, Marshfield, Mattapoisett, Middleborough, Norwell, Pembroke, Plymouth, Plympton, Rochester, Rockland, Scituate, Wareham, West Bridgewater, and Whitman), Worcester County (Ashburnham, Athol, Auburn, Barre, Berlin, Blackstone, Bolton, Boylston, Brookfield, Charlton, Clinton, Douglas, Dudley, East Brookfield, Fitchburg, Gardner, Grafton, Hardwick, Harvard, Holden, Hopedale, Hubbardston, Lancaster, Leicester, Leominster, Lunenburg, Mendon, Milford, Millbury, Millville, North Brookfield, Northborough, Northbridge, Oakham, Oxford, Paxton, Petersham, Phillipston, Princeton, Royalston, Rutland, Shrewsbury, Southborough, Southbridge, Spencer, Sterling, Sturbridge, Sutton, Templeton, Upton, Uxbridge, Warren, Webster, West Boylston, West Brookfield, Westborough, Westminster, Winchendon, and Worcester), Bristol County (Acushnet, Attleboro, Berkley, Dartmouth, Dighton, Easton, Fairhaven, Fall River, Freetown, Mansfield, New Bedford, North Attleborough, Norton, Raynham, Rehoboth, Seekonk, Somerset, Swansea, Taunton, and Westport), Barnstable County (Barnstable, Bourne, Brewster, Chatham, Dennis, Eastham, Falmouth, Harwich, Mashpee, Orleans, Provincetown, Sandwich, Truro, Wellfleet, and Yarmouth), and Suffolk County (Boston, Dorchester, Chelsea, Revere, Roxbury, and Winthrop).

	© 2008, 2009, 2010 by Kelsey & Trask P.C. - All Rights Reserved. Visit our Copyright page for more information.