When one files for chapter 7 bankruptcy Massachusetts, they provide a list of their assets and liabilities in order of magnitude and then a judge decides whether they can afford to pay their debt or if they should be forgiven. If they make enough money to pay off or have property that can be sold, then they are expected to pay what they owe.

This procedure is only for those persons who make low income and are not able to meet their obligations. It is important to file early as the application process can take about six months to be formally approved. Creditors can pursue what is owed to them until when it goes into effect.

Liquidation is involved in this ruling whereby one’s property is gathered and sold in auction bids in order for creditors to get their money. Once the judge approves the application, then it stays on the credit report for ten years. During that time, most statute of limitations will have passed and so creditors will just forget about the debt.

Other debts such as student loans, child support or tax liens are not discharged. Creditors in this case have a right to foreclose on one’s home or property in order to get their money. Congress passed this ruling because they wanted to ensure that only people who face extreme hardship can qualify for it.

One’s income is a big determinant on whether one will have the case approved or denied. People who make a lot of money may be asked to file Chapter 13 which gives more time to those who need it. A judge carefully looks at the disposable income that one has and analyzes their monthly expenses to see if they are able to make any payments. If not, they can discharge the debt and command the creditors to never make any calls to the applicant.

Before opting for chapter 7 bankruptcy Massachusetts, one must use all other means to ensure that they pay off their debts to the creditors. One of the pros of applying for this process is that the person has the opportunity to start anew because lenders believe that they have learnt during the 10 year period.

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