Chapter 7 bankruptcy
Chapter 7 is available to individuals, corporations and other entities that cannot pay their current debts. For individuals, it can discharge most unsecured debt within a few months.
What Chapter 7 can do
- Discharge unsecured debt, including credit cards, personal loans and deficiencies after a foreclosure or repossession.
- Stop collection calls and pending lawsuits.
- Let you keep your home and cars if your payments are current.
- Discharge certain older income taxes.
Frequently asked questions
Can people still eliminate debt after the 2005 changes to the Bankruptcy Code?
Yes, for most people. The 2005 amendments require individuals whose income exceeds a set threshold to consider Chapter 13, where some debt is repaid. Most individuals still qualify for Chapter 7.
Will I lose my house?
Usually not, if your mortgage payments are current and your equity is within the $500,000 Massachusetts homestead exemption, which is higher for some elderly or disabled homeowners. If you are behind on payments, Chapter 13 may be the better option.
What happens to my other belongings?
Bankruptcy exemptions generally protect clothing, furniture, vehicles, tools of your trade and some cash and jewelry, up to set limits. IRAs, 401(k) plans and most pensions are generally protected.
Can Chapter 7 reduce my mortgage or remove a second mortgage?
No. Chapter 7 does not change the principal balance of any mortgage. A second mortgage can be removed only in Chapter 13, and only in some cases. Chapter 7 can remove real estate attachments and executions that impair your homestead exemption.
Should my corporation file Chapter 7?
It depends. A business that is closing does not always need to file. In other cases a Chapter 7 filing is the right step. We decide case by case.
Can I discharge overdue taxes?
Some older income taxes can be discharged if they meet the timing rules in the Bankruptcy Code. Meals, sales and payroll taxes cannot. Be cautious of any advertisement that promises otherwise.
On the Chapter 7 trustee panel since 1997.
- Chapter 7 trustee, District of Massachusetts, since 1997
- Involved in more than 750 bankruptcy cases a year as trustee and as counsel to debtors
- Named a Massachusetts Super Lawyer every year from 2005 through 2026
- AV Preeminent rating, Martindale-Hubbell
- Member, American Bankruptcy Institute
- Lecturer, Massachusetts Continuing Legal Education
- Quoted in The New York Times, The Boston Globe, the Boston Herald and The Providence Journal, and a guest on FOX 25 Boston
Talk to us before you decide anything.
No obligation and no cost for an initial meeting. You may or may not become a client, and that’s okay. We’ll point you in the right direction.
PHONE508-543-0040
EMAILmadoff@mandkllp.com
OFFICEPine Brook Office Park
124 Washington St., Foxborough, MA 02035
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