Chapter 7 Bankruptcy: Frequently Asked Questions

People who are contemplating bankruptcy are often anxious about their future. Here we have gathered some of the most frequently asked questions (FAQ) we hear about Chapter 7 bankruptcy. If you are experiencing financial difficulties and would like to speak with an attorney about debt relief, please contact us for a free consultation. We can be reached through our website, or else by phone: 978-494-6669.

We serve clients in northeastern Massachusetts and southern New Hampshire. Our office is in Andover, Massachusetts.

If I file Chapter 7 bankruptcy, will I lose my house?

This is a primary concern of many people who file bankruptcy. Ensuring that you can remain in your home if at all possible is one of the main goals of our bankruptcy lawyers.

When going through the Chapter 7 bankruptcy process, certain assets are considered exempt, while others must be sold to pay down your debts. The rules for asset exemption differ in Massachusetts and New Hampshire, so it will depend on where you file. In general, a certain portion of your home's value is considered exempt from the bankruptcy process and anything above that is not.

Keep in mind that even if your house is not sold during the bankruptcy process, it could still be subject to foreclosure if you are behind on payments. Defending against foreclosure is another service that our firm offers.

How long does the Chapter 7 bankruptcy process take?

The majority of Chapter 7 bankruptcy filings are complete within three or four months. This is one of the main benefits of Chapter 7 over Chapter 13 — it is finished relatively quickly, and you can carry on with the rest of your life.

How do I know if I should file Chapter 7 or Chapter 13?

Several factors come into play in this determination. In general, a thorough financial analysis by an attorney will show which option is most beneficial, assuming you are eligible for both. Our firm offers free bankruptcy consultations and can help you choose.

What kinds of debt can I eliminate through Chapter 7?

Many kinds of debt are eligible for discharge through Chapter 7, including:

  • Credit card debt
  • Medical bills
  • Certain kinds of income tax debt
  • Personal loans that are unsecured by collateral

However, other kinds of debt persist even after you have filed for bankruptcy. These include:

  • Student loans
  • Child support payments
  • Court-ordered settlements

I am being harassed by creditors. Will declaring bankruptcy make it stop?

Yes. As soon as you declare Chapter 7 bankruptcy, a so-called "automatic stay" prevents creditors from contacting you about your prior debts. In fact, if creditors continue their efforts to collect, you can file a claim against them and receive damages. Our attorneys can assist you in this process if necessary.

Will other people find out about my bankruptcy? Will it be public?

Many people are understandably concerned about privacy during bankruptcy proceedings. While these records are technically public, someone would have to know to search for them —they are not publicized. If you are discreet about sharing information about your bankruptcy, we find that many clients are able to keep these matters private, if they wish.

Will filing for bankruptcy permanently affect my credit?

No. While filing for bankruptcy will show up your credit report for a period of time — 10 years in the case of Chapter 7 — many clients have been able to get new credit cards within a few months and home mortgages within a few years.

Depending on your situation, filing for bankruptcy is likely the best first step toward rebuilding your credit. We can evaluate your financial situation and recommend a course of action that will be beneficial.

If you are an individual with primarily household or consumer debts, pursuant to the provisions of 11 U.S.C. §528(a)(4) of the Bankruptcy Code, as amended, you should be advised that this office may be considered to be a "debt relief agency" in that this office provides assistance to individuals to file bankruptcy to seek relief pursuant to the provisions of the Bankruptcy Code.