Massachusetts Bankruptcy Law Blog

Bankruptcy and divorce topics: What about child support?

Massachusetts residents face financial difficulties for a variety of reasons: consumer debt, overdue taxes, loans and civil judgments. Let's not forget to include child support in that list, as these payments can quickly become overwhelming for someone in financial distress. Mixing bankruptcy and divorce can be a difficult process -- and it is even more stressful when balancing bankruptcy and child support.

Do I have to pay child support after declaring bankruptcy? In general, yes. Bankruptcy provides relief from a variety of debts, including those incurred in the purchase of a home or vehicle. You may even be able to secure a stay, also known as a hold, on actions to collect those debts. This is not possible, however, for child support debts. Bankruptcy operates entirely independently from your child support actions.

The basics of seeking Chapter 7 bankruptcy protection

If you are considering filing for Chapter 7 bankruptcy, you might have a few questions about the way the process works. Liquidation bankruptcy does not have to be intimidating; in fact, it helps scores of people get back on their feet financially every year. Instead of suffering through ongoing money woes, you might benefit from considering Chapter 7 bankruptcy for your own financial situation.

One of the purposes of Chapter 7 bankruptcy is to provide filers with a fresh start. However, there are some eligibility rules; Chapter 7 is not available to everyone automatically. Individual debtors must qualify under a "means test," which evaluates your assets and holdings against your liabilities. After going through that evaluation, you must usually complete credit counseling during the 180-day period before you officially file. This counseling may lead to the development of a debt management plan, which must be submitted to the Massachusetts courts.

Bite victim argues against discharge of judgment in bankruptcy

You've heard of taking a bite out of crime -- but one East Coast man's bite took a chunk out of his finances, as well. The man had sought bankruptcy protection in 2012 after a court judgment was issued against him in connection with an assault. The man was accused of biting his neighbor while in an elevator. Now, the victim of the attack is challenging the biter's claim to Chapter 7 bankruptcy protection, arguing that the $110,000 judgment still needs to be paid.

Official reports show that the biting incident occurred in July 2000. The victim had a current order of protection against the defendant, but the assault occurred anyway. Afterward, the defendant was given criminal penalties for third-degree assault. That man was also ordered to pay $110,000 to the victim.

Chapter 13 bankruptcy often useful for avoiding repossession

Massachusetts residents have a number of reasons for potentially filing for bankruptcy. Job loss, medical expenses and consumer debt are just some issues that can precipitate personal bankruptcy proceedings. You may be under the impression that you cannot file for bankruptcy unless you are entirely financially destitute; that is not the case. Wage earners bankruptcy, also known as Chapter 13 bankruptcy, can often help those who are not considered eligible for the more lenient Chapter 7 proceedings.

Chapter 13 bankruptcy, also known as reorganization bankruptcy, is a useful option for those who want to avoid foreclosures and repossession of their assets. This is particularly salient for those who may have been struggling with financial difficulties because of overdue mortgage payments. If you find yourself in this type of situation, our experienced bankruptcy attorneys may be able to help you identify the appropriate legal strategy to get you back on your financial feet.

Acknowledge the emotions associated with business bankruptcy

Business bankruptcy can be a significant financial blow for those who seek its protection. However, many Massachusetts residents find that the emotional toll of bankruptcy is one that is often left unmentioned. Choosing to close your business for financial reasons can be an emotionally traumatic event that affects both your mental and social health. Give yourself permission to have strong feelings about your Chapter 11 bankruptcy, and you may find that you weather the storm better than you ever imagined.

Experts say that one of the most important assets for any business owner going through bankruptcy is a legal and financial team that can be trusted. Trimming your staff during a Chapter 11 bankruptcy may be necessary for financial reasons, but it is also critical to eliminate those naysayers that refuse to get on board with your plans. Obtain the support of both internal resources -- dedicated employees -- and external resources such as attorneys.

Yes, you can keep some possessions in your liquidation bankruptcy

Bankruptcy is a useful process for Massachusetts residents who are seeking financial relief from consumer debt and other balances. The federal government administers Chapter 7 bankruptcy processes throughout the nation through a network of U.S. Bankruptcy Courts. These courts determine whether debtors' property should be exempted from the bankruptcy, which means that the filer would be allowed to keep certain assets. Today, we help you identify property that may be exempt from seizure during your liquidation bankruptcy.

First, it is important to remember that Chapter 7 bankruptcy is designed to help Massachusetts residents get back on their feet; taking every asset from filers would clearly be counterproductive. Filers are permitted to keep items that are considered necessities of modern life. Exempt property, therefore, is defined as those assets that are considered necessary for living.

Benefits of an automatic stay in your debt relief process

It's the one thing that stops creditors in their tracks: the automatic stay.

Did you know that filing for bankruptcy in Massachusetts automatically protects you from bill collectors and creditors? The automatic stay immediately halts any lawsuits that are pending against you by a creditor. Further, other collection attempts from private and government entities are also suspended pending the outcome of your bankruptcy decision. The automatic stay is one of the most powerful legal protections available through the bankruptcy process.

Understanding types of creditors in your Chapter 13 bankruptcy

If you are going through Chapter 13 bankruptcy in Massachusetts, you know to expect the formal approval of a repayment plan to accompany your bankruptcy petition. Structuring this repayment plan may come as a bit of a challenge, however, because different types of debts have different implications in your bankruptcy filing. Today, we explain the three basic types of creditors' claims and how they should be handled in a successful Chapter 13 bankruptcy repayment plan.

First, three types of claims exist during a Chapter 13 bankruptcy: priority, secured and unsecured. Priority claims are given a special status by the bankruptcy courts. These include the costs related to the bankruptcy itself, along with taxes and other required payments. Secured claims include those that are tied to collateral or certain property -- if payments are not made, then the property is recovered by the lender. Unsecured claims, such as unpaid credit card balances, generally have lower status when it comes to collecting.

Massachusetts biotech company files for Chapter 7 bankruptcy

A Massachusetts biotech firm that has been developing a critical new food-safety technology has officially filed for Chapter 7 bankruptcy. The company, PathoGenetix, said in its liquidation bankruptcy filing that it owed $1.4 million in debt, but it had $3.5 million in assets. The board of directors decided that the bankruptcy was necessary since the company did not receive additional outside funding by a July 2 deadline.

The company had named a new chief executive officer in late 2012, and it was planning to launch a genome sequencing scanning method to improve food safety investigations. The technology would have helped determine the source and nature of food safety outbreaks. This automated method was designed to be released to both government and food industry customers in 2013. Delays with the development in the system led that date to be continually pushed back, however, with the most recent information indicating that the company would be ready to go live with its equipment next year.

Avoid combining bankruptcy and divorce with these simple steps

Did you know that your divorce may require you to split your marital debts as well as your assets? If you are in the process of pursuing the dissolution of a marriage in Massachusetts, you may be rightfully concerned about bankruptcy and divorce. The fact remains that you could find yourself in financial straits if your ex refuses to make payments that are mandated in the divorce decree; however, there are some steps you can take to protect yourself and your financial future.

First, you may be able to avoid bankruptcy and divorce by finding a quick way to pay off debts prior to breaking up. Cash and savings may be allotted to those debts before the divorce papers are actually approved. Many couples address their financial difficulties by using money from the sale of the family home to pay off existing debts.

NACBA | National Association of Consumer Bankruptcy Attorneys | Boston Bar Association | MBA | American Bankruptcy Institute | NCLC | National Consumer Law Center