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In a Chapter 7 case, a trustee is appointed to examine the debtor’s assets to determine if there are any assets not protected by available exemptions. Exemptions are laws that allow a debtor to keep, and not part with, certain types and amounts of property. For example, exemption laws allow a debtor to protect a certain amount of equity in the debtor’s residence, motor vehicle, household goods, life insurance, health aids, retirement plans, specific future earnings such as social security benefits, child support and alimony, and certain other types of personal property. If there is any nonexempt property, it is the trustee’s job to sell it and distribute the proceeds among the unsecured creditors. Although a liquidation case can rarely help with secured debt (the secured creditor still has the right to repossess the collateral if the debtor falls behind in the monthly payments), the debtor will be discharged from the legal obligation to pay unsecured debts such as credit card debt, medical bills and utility arrearages. However, certain types of unsecured debt are allowed special treatment and cannot be discharged. These include most student loans, alimony, child support, criminal fines and most taxes.

Chapter 7 Procedure

After you meet with a Massachusetts Bankruptcy Attorney at Coppa Law Group, you will begin to gather the necessary information so the attorney can begin to prepare your petition. You must list all of your debts, (including claims against you which you dispute, personals loans, etc.) assets and other information in the petition.

About three to four weeks after the Petition is filed, a Hearing, known as a 341 Creditors’ Meeting, is held in Boston, Worcester, or Springfield (depending on where you live) to give your creditors an opportunity to question you and determine if the petition is in order. The trustee assigned to your case will generally ask whether you are familiar with your bankruptcy petition, whether you have listed all your debts and assets, and how you got into financial trouble. Your assets which are not exempt will be required to be turned into the Court to be divided among all your creditors.

About two to three months after the Creditors’ Meeting, you will receive a Final Discharge of all the dischargeable listed debt.

Even if a debt can be discharged, you may have special reasons why you want to promise to pay it. For example, you may want to work out a plan with the bank to keep your car, and to promise to pay that debt, you must sign and file a Reaffirmation Agreement with the Court. Reaffirmation Agreements are special rules and are voluntary. They are not required by Bankruptcy Law or by any other Law.

  • They must be:
  • Voluntary
  • Must not place too heavy a burden on you and your family
  • Must be in your best interest
  • Can be cancelled anytime before the Court issues your Discharge or within sixty days after the Agreement is filed with the Court, whichever gives you the most time.

If you reaffirm a debt and then fail to pay, you owe the debt the same as though there was not a Bankruptcy filed. The debt will not be discharged and the creditor can take action to recover any property on which it has a lien or mortgage. The creditor can also take legal action to recover a judgment against you.

If you are considering bankruptcy, we encourage you to seek the advice and assistance of an experienced Massachusetts bankruptcy attorney before you decide to file. At Coppa Law Group, we will provide you with a free bankruptcy consultation where you can talk to our bankruptcy lawyer about your options.

We are a debt relief agency. We help people file for relief under the Bankruptcy Code.