The Benefits of Bankruptcy in Massachusetts
Chapter 7 Bankruptcy
In many articles I have stated the benefits of chapter 7, which primarily include the liquidation of all most debt. Liquidation in this context referring to the complete discharge of most debt through the process of liquidating certain assets which are not exempt or otherwise excluded to pay for some of that debt. So, chapter 7 can be A fresh start, a get out of jail free card so to speak.
Chapter 13 Bankruptcy
The benefits of chapter 13 bankruptcy for Massachusetts filers include being able to keep the majority of your assets or all of your assets while repaying debts that you owe over time. While you still take a hit on your credit in Chapter 13 bankruptcy, you at least keep the majority if not all of your possessions.
The Big No No
Because bankruptcy, in many cases, can be such an extreme form of financial relief, the government has placed some restrictions on what you can’t do in preparation for bankruptcy and upon filing for bankruptcy in Massachusetts.
The 1 Year Look Back
A clever bankruptcy petitioner must have once thought, “what if I just transferred my property to someone else or, what if I destroy that property or sell it or do something else with it so that it won’t be considered an asset that could be liquidated in chapter 7 bankruptcy?” This would indeed be very clever; however, the bankruptcy court has caught on to this trick. Under 11 USC § 727(a)(2), any property that’s transferred, removed, destroyed, mutilated or concealed within one year of the filing date of bankruptcy (or any time after filing the bankruptcy petition) causes the denial of the entire bankruptcy case. To make matters worse, or better, depending on your perspective, any attempt to get around this rule by having someone else destroy, conceal, or transfer your property also results in the same denial of bankruptcy.
Keeping Accurate Financial Records
You’re obligated under the Bankruptcy Code to keep financial records in some manner. This rule prevents a person from using the excuse that they simply forgot to keep financial records as a reason for not remembering that a certain asset once existed or exists. Likewise, a bankruptcy petitioner cannot conceal, destroy, or mutilate any financial records for the same reason.
Your Word Is Your Honor
Bankruptcy code makes the knowing or fraudulent making of a false oath in a bankruptcy case a cause for dismissal of the entire case. Such misstatements may even include an error on the bankruptcy petition where that error is of material significance. For this reason, your attorney will make sure that you are listing every single asset that you could possibly know about on your bankruptcy schedules.
Remember the Past
Previously obtained discharges of debt through chapter 7 or chapter 11 prevent you from obtaining a similar discharge within 8 years of the beginning of that bankruptcy case. Similarly, a chapter 13 or chapter 12 bankruptcy case that was started 6 years prior to the current bankruptcy petition would be cause for denial of discharge of debt.
The Massachusetts Bankruptcy court is highly skilled at detecting misstatements on a bankruptcy petition, fraudulent statements, or veiled attempts to hide assets. Because there are penalties for engaging in this kind of behavior for yourself and possibly for your attorney, you want to ensure that you have a comprehensive list of all assets prior to filing the bank of petition in Massachusetts.
DISCLAIMER:
The information provided in the pages and posts of this website are for general informational purposes only. The information presented on this site is not legal advice, and no attorney-client relationship is formed by the use of this site.
