It is axiomatic that any and all information requested by the United States Bankruptcy Court on the Chapter 7 Petition be complete, accurate and up to date.  Folks filing for bankruptcy protection are given a discharge based on that truthful information.  Therefore, if material information is not disclosed, the debtor can be subjected to significant penalties. Read more

Once you decide to file for bankruptcy, you can stop paying your creditors.  However, this general rule only applies to debts that you can legitimately discharge in bankruptcy.  Thus, you can stop paying your credit card bills, but not the mortgage on the home you intend to live in, the car you intend to keep, and student loans.

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The Massachusetts bankruptcy law now allows personal residences held in a trust to be protected under the Massachusetts Homestead statute.  It is important to note that the law gives $125,000 in protection to all residents, with or without filing a Homestead in the Registry of Deeds.  The law gives $500,000 in protection to properly filed Homesteads.  This 2011 law, as it affects trusts, is now being reviewed and challenged in various ways. Read more

According to US Courts, there were 9,576 personal Chapter 7 Bankruptcy filings in 2013 in Massachusetts.  Those people got a “fresh start” under the law.  Unfortunately, they might have received something else alongside.  While it was often noted that there were a number of folks who filed for personal bankruptcy that had mental health issues, including depression, now there is evidence of physical health issues as well.  Read more

Is Social Security considered as an asset in bankruptcy? No. Your Social Security income is not considered an asset. Social Security is not factored into your Means Test either. Even if you have built up a huge “asset” of prospective Social Security payments, the Bankruptcy Court is not interested in your expected future Social Security payments. Read more

One of the most common questions we get asked by our Boston bankruptcy clients is:  what will happen to my credit if I file for bankruptcy?  Our website has the answer to how the credit reporting agencies score your credit.   But what can folks do? Read more

The State of Mississippi filed suit last month against Experian last month and that case was moved to federal court today.  The lawsuit alleges that Experian Information Solutions knew of errs on consumers’ credit reports yet failed to correct those errs.  The lawsuit alleges that various errs have affected millions of Americans.  Those affected have been folks who are seeking employment, credit, bank accounts and tenancies. Experian has allegedly incorrectly named consumers as potential terrorists on their credit reports. Read more

Are IRS retirement accounts protected in bankruptcy? In a landmark ruling the Supreme Court said that IRAs that are inherited are absolutely “not retirement funds” and are therefore not exempt in personal bankruptcy.  The Supreme Court reasoned this because:

1.  The debtor likely never invested any monies in the account;

2.  No matter what the age, holders of inherited IRAs must begin withdrawals immediately (unlike regular IRAs when the withdrawals can be delayed until age 70 and ½;

3.  The holder of an inherited IRA can withdraw all of the monies, and pay the tax but no penalties, while the holder of a regular IRA would pay a penalty if withdrawing all of the monies prematurely.  Read more

When is the right time to seek advice from a bankruptcy attorney?  The answer is before you start making decisions that are beyond your usual comfort zone.  Before you take monies out your 401k to pay your credit card bills.  Before you borrow money from friends or family to pay a mortgage on a home that’s under water.  Before you inherit moneys from family. Read more

Of course, however, why do this?  A paid bankruptcy preparer has a very limited scope.  A lawyer, on the other hand, will know if you need to file, will present you with various options, and knows where he or she doesn’t know the law so will protect you by researching what to do.  A lawyer will charge a fair amount and is regulated by the state board of bar overseers.  A lawyer will sign an affidavit on the Bankruptcy Petition and Schedules as to what he or she charged, and will inform you of any problems to anticipate. Read more