The Eviction Process and Debt Relief Options

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In September 2020 the Centers for Disease Control and Prevention (CDC) issued an Eviction Moratorium which was overturned by a U.S. Supreme Court ruling on August 26, 2021. While in effect the moratorium, issued because of the pandemic, banned landlords from evicting tenants for failure to make rent or housing payments provided the renter submitted a CDC Declaration.

Personal bankruptcy options are available and may help, so be sure to speak with a bankruptcy attorney about your situation.

Unpaid rental amounts continued to accumulate for those who submitted the Declaration. Over 3.6 million Americans were behind on their rent between June and July 2021, with 1.4 million of those reporting that they were very likely to be evicted.1 If you are in a situation where you are behind on your rent, or feel you won’t be able to make rental or housing payments, understanding the basics of the eviction process can help you better navigate this stressful situation.

The best advice for those falling behind on their rental or housing payments is to seek help immediately. The Federal government makes funding available to assist households that are unable to pay rent or utilities through the Emergency Rental Assistance Program funds which are allocated to state and local governments. To find where you can obtain Emergency Rental Assistance under the federal program click here.2

This federal program also helps pay for utilities and internet charges. The Consumer Financial Protection Bureau website offers information on a host of federal, state and local government programs offering relief to both homeowners and renters who need assistance.4 Free legal help is also available through many state bar associations. Check with your state to see if it  offers a COVID-19 Rapid Response Helpline, which can provide attorney referrals and a no-cost 25 minute consultation and is available to anyone who needs legal assistance, regardless of income.5 You might also wish to consult with a bankruptcy professional or attorney as they are aware of programs in your area and can assist you in accessing those resources and filing any necessary paperwork. They can also assist you if you are being evicted.

The eviction process varies from state to state so it is best to consult an attorney in the state in which you live. In states for example, a landlord can evict a tenant for failing to pay rent the day after it is due unless a grace period is noted in the lease/rental agreement. The landlord is required to provide the renter with a 7-Day Notice to Quit, which gives the renter seven days to move out in order to avoid being evicted. If you don’t move out within seven days, the landlord can proceed with the eviction process by filing a complaint with the appropriate court.

A summons and complaint will then be provided by an officer or process server at least three days prior to the eviction hearing by giving a copy to the tenant in person; leaving a copy with the tenant’s family member; or by posting a copy on the main entrance of the tenant’s rental unit.6

Once the court issues a summons an eviction hearing with be held in 5-10 days and a tenant may choose to file a formal, written answer with the court, however, they are not required to do so. It is important for the tenant to appear at the hearing as the judge can issue a default judgment in favor of the landlord if the tenant doesn’t appear at the eviction hearing. Both the tenant and the landlord have the right to appeal the court’s judgment.

If the judge rules in favor of the landlord, a Writ of Restitution will be issued 10 days after the date of the judgement. Within that 10-day timeframe a tenant can file an appeal with the court or they can pay the past-due rent in full, and any other costs associated with the judge’s order, and the writ will not be issued and the eviction will be stopped. The Writ of Restitution is a final notice to leave the rental unit. If the renter doesn’t voluntarily leave a sheriff will be sent out, usually within seven days of when the writ was issued by the court, to forcibly remove the tenant from the property.

Unless your landlord sold the debt you owed to a collection agency, your credit report generally will not reveal that you have been evicted, however, a separate rental history report, available through tenant screening companies like Experian RentBureau, will show any eviction you have had within the past seven years.7 This can greatly affect your housing options in the future so it is best to obtain legal advice to guide you through the eviction process. Not only will a lawyer safeguard your rights during the process and insure that your landlord is complying with all applicable rules and regulations, but they also will be able to file documents as specified by the courts.

If you are struggling to make ends meet including paying for your housing, know that you have options. Hines Law is a full-service bankruptcy firm that has been providing debt solutions for residents throughout Massachusetts for 20 years with affordable bankruptcy options. Specializing in Chapter 7 and Chapter 13 filings, we will help you through the bankruptcy process and fight for your rights. Don’t wait, call for a Free Consultation so that you can take control of your finances and establish a secure future.

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1 Likelihood of renters behind on rental payments to be evicted in next two months in the United States in 2021, Statista Research Department, September 8, 2021
Link: https://www.statista.com/statistics/1251511/eviction-likelihood-for-renters-in-the-usa/

2 Find Rental Assistance
Link: https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program/program-index

4 Help for Homeowners and Renters During the Coronavirus National Emergency
Link: https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/

7 How Long Does an Eviction Stay on Your Record? by Jennifer White, 9/29/2020
Link: https://www.experian.com/blogs/ask-experian/how-long-does-eviction-stay-on-report/

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3 Reasons People Need to File for Personal Bankruptcy

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Chances are, you’ve never said the word “bankruptcy” to anyone outside your immediate household. In fact, there’s a good chance you’ve avoided that word within the walls of your own home. While shame surrounding financial mistakes or mishaps is understandable, forging ahead in silence won’t solve your problems. When it comes to money, we all need outside counsel and we all need a clear understanding of our options.

So, is bankruptcy right for me?

Let’s break down three common reasons for filing for bankruptcy, why it might be your best financial option, and the benefits of having a bankruptcy attorney in your corner during the rocky road ahead.

Why and How Do You Get into Overwhelming Debt?

Do you feel like a failure filing for bankruptcy? Smarter people than you have found themselves in the same boat and managed to swim ashore. Think legendary financial guru Dave Ramsey, Larry King, and even Walt Disney. Bottom line, bankruptcy is more common than you think and here’s why many of us find ourselves filing.

1. Medical Debt

Even with decent insurance, a minor fall or accident can spiral you or a loved one into mountains of medical debt. God forbid you’re uninsured and the accident is substantial, unexpected medical debt can wipe out your savings. So if you’re drowning in hospital bills that just keep coming months or years after a long-term visit, bankruptcy may be your only way out.

2. Job Loss

After the year we’ve all had, job stability has never felt more like an urban legend. Even the most sure-fire career paths can veer off-track under the weight of a global pandemic or major recession. At the end of the day, unstable economies can swiftly wreak havoc on a household hit with job loss, even those with fully-funded emergency funds and minimal debt. Because when the jobless months linger on and the bills eventually pile up, we all need a saving grace. As backwards as it sounds, bankruptcy can be your ultimate saving grace.

3. Divorce

Unfortunately, divorce can be as financially devastating as it is emotionally. Legal fees can feel sky high and more often than not, one partner is faced with the brunt of the burden. Got debt? Many couples divorce because of financial disagreements or indiscretion. But once you’re divorced, you’re still stuck with half the bill regardless of whether you know about it.

Advantages To Personal Bankruptcy

So what’s waiting for you on the other side? If student loans, alimony, child support, or restitution aren’t parts of your debt equation, bankruptcy can clear your debt in one fell swoop. Depending on your case, bankruptcy discharges medical and credit card debt. In other words, the debt driving most to bankruptcy in the first place. So let go of your past financial mistakes once and for all. It’s time to start fresh.

Bankruptcy also protects you from pesky creditors and, worst of all, wage garnishments, a financial impact that can last years longer than a bankruptcy proceeding. Far from the final nail in your coffin, bankruptcy may even allow you to keep your home, your property, and a decent credit score.

Hire a Bankruptcy Attorney

Do you know which chapter filing is best for you? Case in point. Experts are called experts for that very reason. They’ll save you money in the long run by determining which filing is best for your situation. Chapter 7 and Chapter 13 serve the same purpose but have different criteria so it is important you file under the one that best suits your situation. Furthermore, bankruptcy attorneys help you negotiate and avoid costly amateur mistakes that may delay or even cost you your case completely.

If you’re in debt, you’re probably sick of creditors. Bankruptcy attorneys do the dreaded task of dealing with credits face-to-face (or phone-to-phone). Once you’ve got an attorney, all communication between you and creditors comes to an end. For most people, the relief of a life free from haranguing collectors is well worth the attorney.

Finally, bankruptcy attorneys give you peace of mind. You’ve spent enough of your life worrying about finances. The last thing you want to worry about amidst a tumultuous financial time is the ins and outs of your bankruptcy proceedings. Attorneys handle every detail and snag every “discount” so you can focus your time and energy on taking that next step forward. Because despite what people may say, there is life after bankruptcy and it’s never too late to start living it.

Regain Control with Bankruptcy

While it may be a scary word, bankruptcy doesn’t have to be a death sentence. In fact, if you’re like hundreds of thousands of Americans, it may be the best possible option for your financial future. So know your options, know your why, and lean on the expertise of a trusted bankruptcy professional.

If you need a trusted and reputable bankruptcy attorney in the greater Boston area Hines Law can help. We have been providing bankruptcy solutions to the residents of Massachusetts for over 20 years. Our Bankruptcy Firm is full-service and has the compassion, knowledge, and expertise to help you gain control of your finances with peace of mind. Call for a Free Case Evaluation today.

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How to Select A Credit Counseling Agency for Your Bankruptcy

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When you are having trouble paying your bills, the last thing you need is for a credit counseling agency to add to your problems by taking your money and not providing the services you expected. It’s important to your wallet and your financial future to take the time to do the research necessary to choose a reputable credit counseling agency.

Personal bankruptcy requires credit counseling services for filers.

Credit counseling agencies provide advice on managing your money and debts. They can also help you improve your credit score, develop a budget, and can educate you on the best ways to manage your money. A counselor should meet with you in an initial session of at least an hour to determine your financial situation including income, expenses, and debts.

If you file for Chapter 7, Chapter 11, Chapter 12 or Chapter 13 bankruptcy, you must obtain credit counseling from an agency approved by the U.S. Trustee’s office within the 180-day period before you file for bankruptcy. The United States Trustee Program (USTP) maintains a list of approved agencies on its website.1 The USTP, however, does not endorse or recommend any particular agency on its list, nor does it guarantee the quality of an agency’s pre-bankruptcy counseling or services.2 If you are considering bankruptcy, it is best to contact a bankruptcy attorney prior to obtaining credit counseling to make sure that you are selecting an approved agency and that the time prior to filing is within the required 180-days.

If you are not contemplating bankruptcy but feel you need credit counseling to get your financial affairs back on track, there are a number of warning signs which can help you avoid choosing a credit counseling agency that is more interested in their profits than they are in helping you. You are most likely not dealing with a reputable credit counseling agency:

• If the agency will not provide detailed information about itself, such as the agency’s legal name, when it was founded, what the legal address of the agency is, whether it is for-profit or not-for-profit, what services the agency provides, what qualifications the counselors have and whether they are certified through the National Foundation for Credit Counseling (NFCC), what affiliations the agency has with organizations like the NFCC, etc.
• If the agency wants you to provide personal information like your name, contact information and social security number prior to providing you with any information (see above) to determine whether they are legitimate.
• If you are unable to find any information on the satisfaction of previous customers, such as a Better Business Bureau rating. Check with your state attorney general’s office3 or local consumer protection agency4 to see if any complaints have been filed against the credit counseling agency.
• If the agency doesn’t offer a range of services, giving you options on how to get out of debt. The wider the range of services the agency provides, the more reputable the agency. It is not acceptable for an agency to steer you into a debt management plan or DMP before they have a full understanding of your financial situation.
• If the agency wants to charge you for educational materials or does not provide any educational classes or workshops.
• If the agency will not give you a written quote detailing their account set-up, monthly fees, or any other charges you will incur. According to the NFCC, no fee should be assessed prior to the service being provided, the set-up fee should be $50 or less, the monthly fee should be in the $25 range, and fees should be waived in cases of true hardship.5
• If the agency won’t give you a formal written agreement or contract, but instead wants you to rely on verbal promises. Double check that your contract outlines any verbal promises by reading it carefully prior to signing it.
• If the agency is evasive when answering questions about how the payments you make to them will be used, when payments will be disbursed to creditors, how deposits will be protected and if the agency will work with all creditors, not just a select few of them.
• If the counselors get commissions or bonuses or are in any way rewarded when you sign up for certain services. Ask how the counselors are paid and listen very carefully to the answer. If the answer seems evasive, be wary.
• If the agency can’t answer your questions about privacy, confidentiality and data security.
• If your state requires that the agency be licensed, but the agency is not licensed in your state.

Credit counseling can provide a light at the end of what may seem to be a very dark tunnel of debt. Finding a reputable agency is the best first step to financial freedom. If you are overwhelmed with the thought of just finding the right agency, consider consulting a bankruptcy attorney, who may be able to provide assistance with that process.

Debt solutions begin with taking back control of your finances and an experienced bankruptcy attorney can help you get started. Hines Law is a full-service bankruptcy firm that has been helping the residents of Massachusetts with debt relief through personal bankruptcy for 20 years.

We understand the emotional toll overwhelming debt and filing for bankruptcy can take and we are here to help every step of the way. If you are looking to file for Chapter 7 or Chapter 13 or just need some advice, call and schedule a Free Consultation with one of our bankruptcy attorneys today.

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1 List of Credit Counseling Agencies Approved Pursuant to 11 U.S. C.-111
Link: https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111

2 Frequently Asked Questions: Credit Counseling
Link: https://www.justice.gov/ust/frequently-asked-questions-faqs-credit-counseling#requirements1

4 State Consumer Protection Offices
Link: https://www.usa.gov/state-consumer

5 Selecting the Right Financial Counseling Organization for You, 10/24/2018
Link: https://www.nfcc.org/resources/blog/selecting-the-right-financial-counseling-organization-for-you/

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An Overview of Bankruptcy Exemptions

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Bankruptcy is designed to ultimately give Americans a fresh start on a stable financial future. In order to do so, there are some items that you own which state and federal laws allow you to keep during your bankruptcy. These items are called exemptions or exempt property and these exemptions can vary from state to state. With a Chapter 7 bankruptcy a trustee uses your property to pay your creditors, but they can’t seize any exempt property. With a Chapter 13 bankruptcy, you are not required to repay creditors for property that’s been deemed exempt.

Most states require you to use their state’s exemptions when filing for bankruptcy.

Other states allow you to choose whether it is better for you to use the state exemptions or the federal exemptions which are defined in the Bankruptcy Code. You can’t choose to take some state exemptions and some federal exemptions. You must choose to use either the federal or the state exemptions. The states where you can choose which exemptions to use include Alaska, Arkansas, Connecticut, District of Columbia, Hawaii, Kentucky, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Washington, and Wisconsin.1 To find out more on these state exemptions, click on the state name in the table listed at https://www.thebankruptcysite.org/exemptions/federal.html

The exemptions that the federal government allows are the same for all Americans. They are tied to the Consumer Price Index and can change every three years depending on the index.2 The current federal bankruptcy exemptions are in effect until April 1, 2022. The amounts listed are for an individual bankruptcy filer. If both spouses file for bankruptcy protection, the amounts would be doubled. Below are some of the federal bankruptcy exemptions. Not all federal exemptions are listed below. Make sure to check with a bankruptcy attorney about how and if these pertain to your situation.

Your home/homestead: You can keep up to $25,150 of the equity in the home, including a mobile home, in which you live or on land which you purchased with the intent to build a home in the future.

Personal Property: You can keep up to $13,400 in household goods, furnishings, appliances, clothing, books, animals, crops and musical instruments, with limits in value that vary. If you have up to $4,000 in equity in a vehicle, you can keep it. You can keep jewelry unless it exceeds the value limit. Your bankruptcy attorney has this information. You can keep up to $2,525 in tools or books you need for work. All health aids are exempt regardless of value. Again, a bankruptcy attorney can provide you with the appropriate information depending on your situation.

Other Sources of Financial Support: You can keep most alimony, spousal maintenance and federal and state benefits like Social Security, unemployment, veterans’ benefits, public assistance and disability payments. You can also keep up to $25,150 which you received from a personal injury lawsuit and any compensation received as a crime victim.

Retirement Savings: Individual Retirement Accounts (IRA), including Roth IRAs, are exempt up to $1,362,800. Tax-exempt retirement accounts are exempt regardless of value. However, if you have considerable tax debt, it gets involved, so you need to check with your bankruptcy attorney about your tax debt options and if it affects your retirement.

The federal bankruptcy exemptions also include what is called a “wildcard.” It is a certain dollar amount that a debtor can apply to any asset.3 The wildcard exemption is $1,325, plus $12,575 of any unused homestead exemption. This exemption can be used to protect items such as an additional vehicle, cash, bank accounts, and property like jewelry that is worth more than its category allows.

A Bankruptcy Attorney Can Help

Bankruptcy exemptions can get complicated, so it is best to consult with a bankruptcy professional who will work with you to review your assets and determine what is exempt by law based on either federal or state guidelines. The bankruptcy professional will also be able to guide you in choosing whether to use federal or state guidelines if you live in a state which allows you to choose between the two.

Hines Law Bankruptcy Firm has been providing debt relief options to the residents of Massachusetts for more than 20 years. We have the experience and commitment to help you navigate the bankruptcy process. If you have overwhelming debt and would like to gain back control of your finances, the bankruptcy attorneys at our firm are here to help. Call for a Free Consultation.
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1 Federal Bankruptcy Exemptions, by Carron Armstrong, 5/12/2021
Link: https://www.thebalance.com/federal-bankruptcy-exemptions-316163#

2 Federal Bankruptcy Exemptions by Cara O’Neill,
Link: https://www.thebankruptcysite.org/exemptions/federal.html

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Automobile Repossession and How Personal Bankruptcy Can Help

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Americans shouldered about $1.36 trillion in automobile loan debt in 2020, with an estimated average balance of $19,646, ranking automobile debt as the third largest debt category.1 Home mortgages and student loans are ranked as first and second, respectively. While some lenders have been lenient during the pandemic, borrowers still suffering from financial issues caused by layoffs, medical debt and other financial burdens may find it difficult to pay their automobile loan obligations. Knowing the general facts about automobile repossession can help alleviate an already stressful situation.

If you are facing repossession, there are debt relief options such as personal bankruptcy that can help.

Automobile loans are secured debt loans. That means that the lender, whether it’s a bank, credit union, car dealer or other type of lender, can take back the automobile if you don’t pay your loan on time and then sell the automobile, using the proceeds from the sale to pay back the debt.2 The first step to take when you realize you can’t pay your monthly automobile loan payment is to contact your lender to discuss options available to you.

This might include them waiving the monthly payment and adding it to the end of your loan period. They may also agree to a reduced payment amount or refinancing of your loan at a lower interest rate. If you agree to modifications to your original loan, get the new terms in writing. You also have the option to sell your automobile to pay off the loan prior to not making the monthly loan payment. If you lease a vehicle, however, read your lease document carefully as you may be charged fees for early lease termination.

Technically, a lender has the right to repossess your automobile the day after a missed payment. This rarely occurs, but the time-frame when an automobile is repossessed can vary greatly. Usually, it is several months after you are sent the first past due notice. In some states, a lender is not legally obligated to take you to court, or to even notify you when they intend to repossess your automobile.3 However, the lender or their agent must not “breach the peace” when taking your vehicle.

This means that the repossessor must remove the vehicle without disturbance. The repossessor can’t threaten you, be rude or trick you into providing access to your automobile. The repossessor also can’t enter a structure where you keep your car, even if it is unlocked. Once a vehicle is repossessed, you have 15 days to get it back from the lender, but unfortunately, one of the only ways to do so is to pay the entire loan, plus any costs assessed for repossessing the vehicle. You can also buy your car back when the lender goes to sell it, as most states require that you be notified when and where the automobile will be sold.

Before it gets to this point, know that you have options and speaking with a bankruptcy attorney can help.

Trying to hide your automobile is not a good idea as in some states this would constitute fraud — a criminal act — if you did so to keep your car from being repossessed. The longer it takes the repossessor to locate your vehicle the more they will charge the lender and that cost will be legally passed on to you. The repossessor may also contact your friends, neighbors and relatives to determine if they know where the vehicle is being kept, which is generally embarrassing to the debtor.

Rather than worrying about looking out your window to find your car gone one day, the alternative is to do a voluntarily repossession. In a voluntary repossession you make an arrangement with the lender to give the automobile back to the lender. The car will be sold and you will still be responsible for any balance due the lender if the car is sold for less than you owe on your loan.

An advantage of voluntary repossession is that you will not owe vehicle removal and impound fees that are assessed when an automobile is repossessed. You are also able to control when the vehicle is surrendered so it won’t be an unpleasant surprise when you leave work or your home to find that you no longer have a vehicle. You are also able to get all your possessions out of the vehicle, whereas often possessions (like tools and compact discs) go missing when a vehicle is repossessed.

There is no difference between a voluntary repossession and a regular repossession in terms of your credit. When you miss a payment or payments it shows up on your credit report and repossession will be noted on your credit history for up to seven years.4

Bankruptcy Can Help

If you owe on more than your automobile loan, filing for bankruptcy can be an option. Once you file, a lender can’t sell your automobile without a court order.5 The advice provided is general in nature and may change based on state-specific laws and regulations governing automobile repossessions and bankruptcy. It is best to consult with an attorney who can guide you through the repossession and/or bankruptcy process, making sure that you know your options and that your rights are not being violated.

Don’t let your overwhelming debt ruin your life. A personal bankruptcy attorney can help you keep your car and home as well as eliminate debt so that you can gain control of your finances and move forward. Hines Law is a leading Massachusetts personal bankruptcy law firm that specializes in Chapter 7 and Chapter 13 filings and has been helping clients throughout the greater Boston area for more than 20 years.

Contact us now for your FREE Consultation!

1 American Debt: Auto Loan Balances Hit $1.36 Trillion in 2020 by Amy Fontinelle, 2/11/2021
Link: https://www.investopedia.com/personal-finance/american-debt-auto-loan-debt/

2 Secured Debt by James Chen, 6/13/2020
Link: https://www.investopedia.com/terms/s/secureddebt.asp

3 Car Repossession Laws in Michigan by Beverly Bird
Link: https://www.sapling.com/6804717/car-repossession-laws-michigan

4 What Happens to My Credit Report if I am Late Making Payments on My Auto Loan or My Car is Repossessed? 8/18/2015
Link: https://www.consumerfinance.gov/ask-cfpb/what-happens-to-my-credit-report-if-i-am-late-making-payments-on-my-auto-loan-or-my-car-is-repossessed-en-853/

5 Car Repossession Laws: An Overview by Baran Bulkat
Link: https://www.nolo.com/legal-encyclopedia/car-repossession-laws-overview.html

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How do I Know If I Should File for Personal Bankruptcy?

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Declaring bankruptcy may be one of the most challenging decisions you have to make, mainly because it has long-lasting effects on your credit. There are many options to look at before deciding to file bankruptcy, such as debt consolidation, and sometimes debtors are willing to negotiate a settlement if you talk to them. If you cannot do those two things, it is time to speak to a qualified professional about filing for personal bankruptcy.

How do I know if I should file for personal bankruptcy?

It is time to consider filing for personal bankruptcy once you are no longer able to pay bills and you are having difficulty meeting your basic living needs.

People often ask how they will know when it is time to consider filing for personal bankruptcy. Whether married or not, you should take time to go over your financials to find out how much you owe. Once you find out a dollar amount, a bankruptcy professional can talk to you about your options.

There are five main reasons why people may choose to file for personal bankruptcy.

1. Medical expenses are one of the main reasons people look into filing for personal bankruptcy. People who do not have any insurance or are underinsured can quickly run into money issues.

2. Overuse of credit cards, student loans, car or home purchases, and poor financial management are other reasons people choose to file for personal bankruptcy. It is easy to overspend and not even realize.

If you went to college, student loans could easily be overwhelming. Credit card offers start coming in, and it is easy to say yes to them. Low-interest rates look good when you are looking to purchase a car or home. Often people will get tempted by offers of low to no down payment when driving by car lots. If you find yourself in this situation, it may be time to look into filing for bankruptcy.

3. Job loss is a common reason people file for personal bankruptcy. If you no longer have a steady income, it is impossible to keep up with monthly payments, and it can cause debt to accumulate. Often people will use their credit cards to keep up with debt, and this compounds the debt.

4. Separation or divorce is another reason people file for personal bankruptcy. Going through a separation or divorce is an area where debt can add up quickly. Paying for attorneys and loss of half of your income can be devastating to finances. In addition, splitting assets, or if you have to pay alimony or child support, may become difficult.

5. Unexpected emergencies can put a strain on finances. Often unexpected emergencies can happen; maybe your car broke down, your home suffered damage that your insurance did not cover, or there was an unexpected accident.

Types of Bankruptcy

Typically, there are two different types of personal bankruptcy that people chose to file. One type is Chapter 7 bankruptcy and the other type in chapter 13. There are similarities and differences between each of these, and a professional who specializes in these two types can better help you decide the best one for you.

Chapter 7 bankruptcy is when you liquidate your assets to pay off as much debt as you can. Both individuals and businesses can file for chapter 7 bankruptcy. Receiving a discharge when filing for chapter 7 personal bankruptcy takes between three to five months.

Chapter 13 bankruptcy is when your debts are not immediately erased, but instead, you make an agreement to continue paying on the debt for another three to five years, and any unpaid debts after this time are discharged. There are a few main reasons to choose chapter 13 bankruptcy when filing for personal bankruptcy.

One of the most common ones is having a mortgage on your home and not wanting to lose it. Only individuals and sole proprietors can file for chapter 13 bankruptcy. Discharge of chapter 13 bankruptcy does not happen until the repayment plan is complete.

There are many benefits in filing for personal bankruptcy and can help you take control of your finances as well as secure your future. Although there are some adverse effects on your credit, it is possible to get your life back and secure your future with careful planning, diligence and sound advice from an experienced bankruptcy attorney.

The road to financial recovery

Filing personal bankruptcy will help to relieve a lot of stress from your life, making it easier to start over. It is essential to find out exactly how chapter 7 and chapter 13 bankruptcy works. To do this, you need to talk to a professional who is better able to guide you.

Hines Law has been providing bankruptcy solutions to the residents of Massachusetts for over 20 years. Our Bankruptcy Firm is full-service and has the compassion, knowledge, and expertise to help you gain control of your finances with peace of mind. Call for a Free Case Evaluation today.

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Busting 4 Common Bankruptcy Myths

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There are a lot of untruths, or myths, surrounding filing for personal bankruptcy. Sometimes these myths are perpetuated based on rules, regulations and laws that have changed over the years. Most of the time, however, the myths are due to the complexity of bankruptcy and people getting confused about the differences between Chapter 7 and Chapter 13 bankruptcy filings, which are the two most common types of bankruptcy.

While it is best to consult with a bankruptcy attorney who can answer your specific questions about the bankruptcy process, analyze your situation and provide expert advice on the best way to manage and discharge your debt, below are answers to some common bankruptcy myths.

Myth #1: I will lose most or all of my property when I file for bankruptcy.

In a Chapter 13 bankruptcy filing you keep all your assets, and your income is used to pay your debts over a period of time, usually three to five years. In a Chapter 7 bankruptcy your assets will be seized by a court appointed trustee and sold to pay your debts. Certain property is exempt, or protected, from having to be sold to pay debts under federal bankruptcy law or under the laws of your state.1 In general, you will be able to keep part of the equity in your home or automobile, personal items, clothing, tools needed for your employment, Social Security, and any other public benefits.2

The assets that will be used to pay your debts include money in your bank account or investment accounts, any property you own which is not your primary residence, recreational vehicles, boats, a second car or truck, collectibles or other valuable items. The property that you can keep, that is exempt, differs from state to state. Some states allow a person filing for bankruptcy to choose whether they wish to use the state’s exemptions or the federal exemptions. This is an area where a bankruptcy attorney can provide guidance in helping you choose which exemption is best depending on the property you own and how much of it, dollar wise, would be exempt.

Myth #2: I won’t be able to get credit after bankruptcy.

Bankruptcy does make it difficult to get credit, as a bankruptcy will be on your credit report for seven years if you file for Chapter 13 bankruptcy protection or ten years if you file for Chapter 7 bankruptcy protection.3 According to Experian, by paying your bills on time and carrying little, if any, debt your credit scores can rise significantly within a year of having your bankruptcy discharged.4

A secured credit card can help rebuild your credit. How a secured card works is that you pay the credit card company upfront an amount that is equal to your credit limit on the card. Your secured card works like any other credit card. There are many other ways to rebuild your credit. These include getting a secured loan or credit-builder loan, getting someone to co-sign a credit card or loan with you, and becoming an authorized user on someone else’s credit card.5

Myth #3: My bankruptcy will be public knowledge.

Because they are administered through the court system, once your bankruptcy is discharged (finalized), the court record becomes part of the public record. The public record is any document that a person can access through a court or other government entity without having to first get authorization.

Sensitive information on the bankruptcy forms, such as social security numbers, birthdates and names of minor children will be blanked out on the information available as part of the public record. In the past, newspapers used to routinely publish information on bankruptcies, but that is rarely the case today, even in smaller communities.

Myth #4: I will be debt free after bankruptcy.

You may not be entirely debt free after bankruptcy. Debts which are “secured” by collateral, such as most home mortgages, allow the lender to place a lien on the property. In a Chapter 7 bankruptcy filing, your mortgage may be discharged or eliminated, but, with the lien on the property if the mortgage remains unpaid the lender can still recover the collateral by foreclosing on the property once the automatic stay is lifted.7 Alimony, child support, student loan and tax debts generally are also not part of bankruptcy proceedings, and thus have to be paid.

Hines Law is a top-rated bankruptcy firm that provides debt solutions to the residents of Massachusetts with more than a decade of satisfied clients. Specializing in Chapter 7 and Chapter 13 filings, we are committed to serving individuals with the care and compassion they deserve during bankruptcy protection. If its time for you to take control of your debt and get your life back on track, call us for a Free Consultation.

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1 Chapter 7 Bankruptcy Basics
Link: https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics

2,3 What You Need to Know About Bankruptcy
Link: https://www.investopedia.com/articles/pf/07/bankruptcy.asp

4 Can I Get a Credit Card After Bankruptcy?
Link: https://www.experian.com/blogs/ask-experian/can-i-get-a-credit-card-after-bankruptcy/

5 How to Rebuild Credit After Bankruptcy
Link: https://www.nerdwallet.com/article/finance/rebuild-credit-after-bankruptcy

6 What does it mean that a bankruptcy is public record?
Link: https://upsolve.org/learn/are-bankruptcies-public-records/

7 What Bankruptcy Can and Cannot Do
Link: https://www.nolo.com/legal-encyclopedia/chapter-7-13-bankruptcy-limits-benefits-30025.html

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