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Seven Personal Bankruptcy Tips BEFORE Bankruptcy in Boston

We recommend that folks in Massachusetts meet with us BEFORE making decisions regarding assets whenever personal bankruptcy is a possibility; even if it is only a remote possibility. This is because with decades of experience in personal bankruptcy we see a theme with respect to mistakes our clients have made.
First, be very careful before transferring real estate. Selling your house is one thing. Transferring ownership to your spouse or child may be a good idea for many reasons. However, it also may be considered a fraudulent conveyance in a number of instances. The federal bankruptcy Trustee that reviews your Personal Bankruptcy Petition and Schedules always asks about real estate transfers. The Registry of Deeds records are public and your testimony is under oath. It is one of the easiest frauds to catch. And, it’s almost always unnecessary: your can exempt your home under both federal and state laws in personal bankruptcy.
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Boston Bankruptcy Clients Question Debt Agencies

Many of our personal bankruptcy clients have tried to consolidate their debt by hiring debt management companies. This generally does not work for a variety of reasons, one major reason being that those companies are often owned by the credit card companies! Whose interests are they going to serve? Not yours!
The usual strategy of those companies is to get you to sign an agreement. Then they collect money from you monthly. They send a letter to all your creditors. They try to negotiate with the creditors to obtain two things: first, they negotiate the fee that they will receive from the money you pay, and second, they ask for you to be able to make reduced payments. There is no guarantee that this will work for most creditors, and it rarely works for all creditors. Even if it does work for some creditors, it doesn’t do anything you could not have done yourself; at anytime, you can try to negotiate a reduced payment by speaking with the creditor yourself. By hiring another company to consolidate your debt, now you are also paying a percentage to them! The companies sometimes collect money from you monthly without even paying the creditors (we hear this one all the time from clients); then, when you “default” they will try to negotiate the debt. This works sometimes, but not other times. Your credit suffers, and you have no control over which strategy they are undertaking and how they are doing it.
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Massachusetts Student Loan Defaults Up – Not Dischargeable in Bankruptcy

According to statistics out this week from the US Department of Education, the rate of student loan defaults is trending up. This is likely a result of the “economic downturn” in Massachusetts, according to the Secretary of Education. This is a website to vent about the problems with student loans in Massachusetts.
Many of our Boston clients are students or former students. They often have student loans in addition to outstanding credit card debt, car loans, and monthly bills to pay. Unfortunately, student loans are not dischargeable in bankruptcy. This includes both public and “private” student loans.

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Massachusetts Homestead Bankruptcy Law – a simple approach for clients

Many of our clients in Massachusetts have lost their homes. Many others have no equity in their homes. Some of our clients, however, have significant equity in their homes. Nevertheless, there debt is daunting and they consider filing for personal bankruptcy.
One of the bankruptcy exemptions in the law is the family home. There are two laws we follow to exempt clients homes from creditors in bankruptcy.
First, there is the federal bankruptcy law: 11 United States Code, Section 522(d)(1). That law currently exempts $20,200 in equity in the home. The Massachusetts Trustees will look for proof of the value of your home and the outstanding mortgage(s).
If the equity is less than $22,000, we can use the federal exemptions: you can keep your home and we can use the more generous federal exemptions so you can usually keep your other assets.
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Divorce Results in Bankruptcy for Many in Massachusetts

While child support and most alimony orders are not dischargeable in bankruptcy, many times it results in our clients not being able to pay their other obligations. Thus, they come to us for a personal bankruptcy. This is especially true when someone loses a job and can’t afford a lawyer to go back to court to modify an existing order.
Clients who fail to pay support sometimes end up in jail. More often, however, they end up in Bankruptcy Court.
The State House will finally hear from those struggling to balance their obligations when the Joint Committee of the Judiciary will take testimony on September 17, 2009. The Massachusetts Alimony Reform association will have their members present to testify about their experiences with this system.
The Joint Committee will be reviewing House Bill Number 1785. This proposed law would change alimony laws in Massachusetts.

Massachusetts Bankruptcy Filings Up in 2009

We have filed a record number of bankruptcies for our clients in 2009. Many ask questions before, during and after our representation. When the bankruptcy laws changed in October 2005, we filed what was at that time our record high number of bankruptcies, however, unfortunately, we are seeing even more this year.
Thus, to better serve our clients, we are initiating this blog: Boston Bankruptcy Lawyer Blog or
One look at the Federal Reserve Bank of Boston’s statistics bears this out: in the first two quarters of 2008, there were 8,137 bankruptcies filed in Massachusetts – in the first two quarters of 2009, the number is 10,185. This is a significant increase.
We feel it may be related to foreclosures, which, according to the Federal Reserve Bank of Boston’s statistics, 2008 was the high-water mark for foreclosures in Massachusetts: .57% of all houses (the former peak was 1992 with .52%). Their figures for 2009 are not out; however, the trend is against our clients. Our goal is to provide our clients with the most effective advice regarding filing a personal Chapter 7.