For Massachusetts residents considering bankruptcy, there are many questions that must be resolved prior to reaching a decision to file for bankruptcy in Massachusetts. In this article, Attorney Gaudet answers how individual situation can affect the decision to file for bankruptcy. Because every individual has different circumstances that will affect the decision to file for bankruptcy, it is important to consult a bankruptcy attorney prior to reaching the decision to file for bankruptcy.

“I Don’t Have a Lot of Debt, Should I File for Bankruptcy?”

I recently had a client who was experiencing multiple health issues, had difficulty maintaining his employment because of his health issues, was facing repossession of his car, and had a modest amount of credit card and private loan debt. His first question, after explaining his financial circumstances, was, “I don’t really have a lot of debt, should I file for bankruptcy?”

I first explained to him that the ideal situation would be to try to work out a settlement with the car finance company, or to attempt to restructure the car loan. I then informed him that if the remainder of his debt payments were manageable, we might be able to prevent bankruptcy, retain his credit at its current level, and slowly get him out of debt. Though he appreciated my suggestion, his main problem with this plan was that he simply did not have enough energy due to his current health, nor did he feel his work situation was entirely secure, and that he thought even if the plan succeeded, he would end up defaulting on the new plan due to an inability to continue making payments.

Though this client’s debt load was low, the decision to file for bankruptcy made sense because he did not believe any plan to repay his debt (even at a considerably lower monthly payment structure) would succeed. As a result, we filed for bankruptcy in Chapter 7 with this client as he passed the means test required for Chapter 7 bankruptcy filings in Massachusetts.

“I Have a Huge Amount of Debt, Should I File for Bankruptcy?”

The decision to file for bankruptcy in either Chapter 7 or Chapter 13 bankruptcy is made much more straightforward for the average person who has a great deal of debt. Depending upon the assets and income allocation of the bankruptcy petitioner, the decision in such a case then revolves around whether or not to file for Chapter 7 or 13. If the income fails the means test, then it is most likely that the petitioner will have to file for Chapter 13 bankruptcy and enter into a repayment plan with the creditors involved. If the income of the petitioner is at or below the threshold allowed for bankruptcy in the means test, then Chapter 7 bankruptcy can be filed in Massachusetts.

I am oversimplifying the decision to file for bankruptcy in this section. There are many other issues which must be considered, including the decision to keep the family home, to keep the car, truck or other vehicle, and many other important matters that arise in a bankruptcy case. Our office will review your financial status and advise you as to how best to proceed based upon your individual circumstances.

“I Have Property That I am Afraid that I Will Lose if I File for Bankruptcy.”

It can be difficult enough to even contemplate bankruptcy for most people, and individuals thinking about filing for bankruptcy in Massachusetts are often at the end of their financial rope when doing so. The last thing that a bankruptcy petitioner wants to face is the loss of a home, car, truck or other valuable property. Unfortunately, it is sometimes the case that because of the circumstances that the debtor is presently in, they will lose their home or car. However, there are also circumstances in which the homeowner can continue making payments under Chapter 13, avoiding foreclosure in the process. Similarly, there are times when it is possible to avoid repossession of a car or truck. Contact our offices to learn more about your ability to avoid repossession or foreclosure in relation to the bankruptcy process in Massachusetts.

Consider This… Hope

No matter where your financial life is currently at, no matter how bleak and dark your circumstances appear, there is hope. Debt consolidation, debt settlement, restructuring of loans, and strategic repayment of loans are possibilities to avoid bankruptcy. If you are able to take on an extra job or otherwise increase your income you can then, likely, remove the thought of bankruptcy from your mind altogether.

Alternatively, if circumstances align such that bankruptcy is the only valid choice, then bankruptcy it is. My mission, with respect to practicing bankruptcy law for clients in Massachusetts, is to first understand the specific financial situation that the client finds themselves in. Once a baseline financial status has been established, the next step is to determine what options are available to manage the debt. If managing the debt is off the table and bankruptcy is the next best option, then I will assist you in filing for bankruptcy in Massachusetts.

One common thread in bankruptcy for clients is the fear of both the unknown and the known. What I mean by this statement is that most people are not only concerned about the effects of filing for bankruptcy on their credit (the unknown) but also about any perceived social stigma that accompanies filing for bankruptcy (the known). As part of the service that I provide, I will take the time to explain the many unknowns as well as my own personal experience with the known aspects of filing for bankruptcy in an attempt to help you to achieve the best-informed choice possible.

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