AFFORDABLE CHAPTER 13 BANKRUPTCY FEE

*OUR OFFICE WORKS WITH CLIENTS FROM ANYWHERE IN MASSACHUSETTS*

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There are two types of bankruptcy that individuals usually file. The one discussed here is Chapter 13; the other is Chapter 7.

What is Chapter 13?

Chapter 13 is a court-approved partial repayment of debts. The partial repayment happens through a plan, which lasts three to five years–depending on your applicable commitment period which, in turn, depends on your income.  Big picture: At the end of the plan payment period, the remaining balances on most debts are discharged (credit cards, medical bills, unsecured personal loans, unsecured junior mortgages, etc.)

The Chapter 13 Plan

In Chapter 13, your lawyer proposes a plan for the Court to approve.  The plan is a written document, usually of about five pages.  If the plan complies with the bankruptcy laws, your creditors cannot refuse to accept it.  This is the primary power of Chapter 13 bankruptcy.

If you file Chapter 13, you make monthly payments as set forth in the plan.  This money is sent to the Chapter 13 Trustee, a quasi-governmental official, who holds the money pending court approval of your plan.  Once your plan is confirmed by the court, the trustee begins to make payments to your creditors in the manner provided in your plan.

The calculation of attorneys’ fees in Chapter 13 bankruptcy cases is quite different than in Chapter 7 cases. Massachusetts Bankruptcy Local Rules permit a standard Chapter 13 fee of $3,500 for pre-confirmation and $500 for post-confirmation services.  In Massachusetts this $4,000 legal fee retainer is called a “no look” fee because an attorney can charge it without needing to file a special itemized explanation of the attorneys fees with the Bankruptcy Court and without securing a Judge’s approval.

For Chapter 13 cases the Crossley Law Offices charges clients an upfront $4,000 legal fee retainer.  For the level of experienced bankruptcy lawyers you get on your side, our fee is a fair and reasonable retainer fee to charge people who are struggling through increasingly difficult economic times.

Don’t make a costly mistake. For a FREE bankruptcy consultation fill out the Free Evaluation form above, or call (508) 655-6085 today.

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In Chapter 7 bankruptcy cases you cannot stop foreclosures by curing mortgage arrears like you can in Chapter 13 cases.  You can also not cram down car loans, strip off wholly unsecured second and third mortgages, and pay off non dischargeable tax debts.  Chapter 13 offers more flexibility and options, which is one of its chief advantages over Chapter 7.  However, most of the time Chapter 7 bankruptcy is the perfect remedy to the financial problems that you just can’t fix any other way.

For a FREE consultation regarding which type of bankruptcy is best for you (Chapter 7 bankruptcy or Chapter 13 bankruptcy) fill out the Free Evaluation form below or call (508) 655-6085 today.

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Most debts are discharged in Chapter 7 bankruptcy.  Credit cards, unsecured personal loans, medical debt, car repossession deficiencies are examples of the types of debts that are generally dischargeable.

What Debts are not Discharged in Chapter 7 bankruptcy?

Not all debts are discharged in Chapter 7 bankruptcy.  Student loans, recent taxes (within the last 3 years), and most divorce-related debts are a few examples.

Credit:

Chapter 7 bankruptcy stays on your credit report for ten years from the date of filing.  Most people think that a bankruptcy destroys your credit for the whole ten years, but that is not correct.  Clients who work with our office are very surprised to learn that filing a bankruptcy will actually increase their current credit score (sometimes as much as 80 to 120 points).  This is because most clients already have a lower credit score based on their significant history of late and/or missed payments. However, the small percentage of clients who come to us with exceptionally high credit scores need to be aware that, in their situation, filing a bankruptcy will place a moderate negative mark on their credit for the ten-year period.  As time passes the weight given to the bankruptcy by the credit bureaus gets lighter, the score improves, and after ten years it’s gone completely.

Assets in Chapter 7 bankruptcy:

Chapter 7 bankruptcy is a liquidation.  What this means is that, in theory at least, you give up all of your non-exempt property for a discharge of your debts. In reality, most people have very little property, so they do not have to give up any of it in Chapter 7.  Even if you do have a lot of property (cars, jewelry, electronics, furniture) Massachusetts is on of the states that has a very good list of exemptions and our office is extremely successful at making sure that all of our clients’ property is exempt and therefore safe from being taken by the Chapter 7 Trustee.

If you do have assets that are not exempt and want to keep them, you cannot do so in a Chapter 7 and will need to file a Chapter 13.  You can learn what will happen to your assets in a Chapter 7 bankruptcy by calling us and answering all of our questions honestly.

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There are different ways that the bankruptcy system decides if you qualify for Chapter 7 bankruptcy.  The main one is the ‘means test’, and only certain people have to take it.  If you make more than the median income for your State (by family size) you must take the ‘means test’, but if you make less than the median income then you automatically qualify for Chapter 7 bankruptcy and don’t even need to take the ‘means test’. Currently, these are the median income figures by family size in Massachusetts.

In Massachusetts, here’s the median income by family size (for cases filed after Nov. 1, 2017):

• Family of one: $61,353
• Family of two: $78,508
• Family of three: $96,698
• Family of four: $121,280
• Add $8,400 for each additional family member.

If you make more than the median income listed above then you must take the ‘means test’, and you often will not qualify for Chapter 7 bankruptcy, but this is not cut and dry.  It depends on the amount of your secured debt payments, county of residence, whether you are married, have medical issues and a variety of other factors.  These items are factored into the test and, in part, determine if you “pass” the bankruptcy means test and therefore qualify for Chapter 7 bankruptcy.

Even if you “pass” the means test or do not have to take it all, there remains what is known as the totality of the circumstances tests under Section 707(b)(3) of the Bankruptcy Code.  This test asks the basic question (i.e. ability to pay) from a less technical perspective and can, at times, require that even people below the median income file Chapter 13 instead of Chapter 7 bankruptcy.

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Chapter 7 is the most common type of individual bankruptcy. Unlike in Chapter 13, you do not pay part of your debts back in monthly installments. If you qualify for Chapter 7 and comply with the procedures and disclosure requirements, most of your debts will be discharged.

At the Crossley Law Offices we charge an affordable, fair and reasonable flat fee to prepare and file your Chapter 7 bankruptcy for you.  While many other Massachusetts lawyers are charging between $1,900 and $2,200 (not including Court filing fees and other costs) for a consumer Chapter 7 bankruptcy filing, we charge only $1,500. Why is our fee so much lower than other law firms? Because it’s a fair and reasonable fee to charge people who are struggling through increasingly difficult economic times.

Including the mandatory Bankruptcy Court filing fee and other expenses (see above) the total cost to you is only about $1,900. Most other attorneys are charging between $1,900 and $2,200 for the very same service.

If you want to know more about the bankruptcy ‘means test’ or have a FREE bankruptcy consultation, just fill out the Free Evaluation form below, or call (508) 655-6085 today.

Qualifying for Chapter 7:

Only people who cannot afford their debts are eligible for Chapter 7.  So, you must qualify.  The general rule is that if you can afford to pay part of your debts, you must do so in Chapter 13 bankruptcy, which has many advantages of its own.

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* FLAT RATE $1,500 CH. 7 LAWYER’S FEE * –  Almost certainly the most affordable fee in Massachusetts for the level of experienced bankruptcy law firm that you have working on your case.  We provide superior legal services at affordable rates.  Plus you have our firm’s MATCH & BEAT policy on your side.  If there’s another firm offering you their bankruptcy services, with an experienced bankruptcy attorney, our firm will either MATCH their price or BEAT their price.  We guarantee that when you call us, you will speak with an attorney right away.

* EXPERIENCE * – More than 17 years of handling Chapter 7 and 13 consumer bankruptcies, and Chapter 7 and 11 business bankruptcies for thousands of Massachusetts consumers and businesses.  You receive personal, direct service working with an experienced Massachusetts licensed bankruptcy attorney.

* FLEXIBLE SCHEDULE * – This is the real world and we understand that you have to work, so we offer evening and Saturday appointments to fit your schedule.

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