 With the struggling economy, many people are finding themselves deep in credit card debt. Therefore, consumers are forced to turn to debt consolidation in order to get control of their finances. However, before a person decides to consolidate their credit card debt, they need to be aware of the credit... |
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Living with debt is by no means easy. There’s the constant concern of living paycheck to paycheck and the never ending issue of covering monthly bills and living expenses. While most of us pride ourselves on being self-sufficient, it’s hard to ignore that we all sometimes live well beyond our means.... |
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| Massachusetts |
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Relative to the rest of the country, the number of filings in Massachusetts was low prior to 2005, the year when the bankruptcy laws were drastically revamped to discourage consumers from filing. Well, the total filings has dropped further, which is great in one sense, but with financial problems worsening, particularly with foreclosures, where are people who are overwhelmed with their debt situation turning? Many are turning to new debt relief services like credit card negotiation programs, as well as more traditional forms of debt management like consumer credit counseling. What’s So Different About Bankruptcy The biggest change is that consumers in Massachusetts who are filing bankruptcy can no longer choose which chapter is more suitable for them. With bankruptcy, there are two types: Chapter 7 and Chapter 13. Under a Chapter 7, the debtor is forced to sell their non-exempt property (what’s exempt is determined on a state level---for your state’s follow this link: Massachusetts Bankruptcy Laws & Exemptions) and use the proceeds from the sale to pay off their consumer debt. From the creditors’ standpoint, the only issue with this is that most states exempt the vast majority of property from liquidation, and therefore, they don’t get paid anything. This being the case, they “allegedly” lobbied to have Congress amend the laws so that more Americans would be put in Chapter 13 plans, which involves paying off some or all the debt over the course of three to five years. Who is being forced to file Chapter 13? Assuming they fail to pass the means test, debtors who earn more than the Massachusetts median income in most cases. The means test is basically a set of questions and answers that is used to determine whether paying back even a portion of the debt is possible based on a debtors’ income and expenses. Listed below is the Mass median income information for 2006: 2-person families: 61,293 3-person families: 75,801 4-person families: 89,347 5-person families: 94,709 6-person families: 92,386 7-or-more-person families: 87,707 MA Bankruptcy Data 2004: 18,129 2005: 26,308 2006: 8,147 Massachusetts is a state that historically has a low personal bankruptcy filing rate, at least relative to the rest of the country. Like every other state, however, the decrease in filings from 2005 to 2006 was striking, declining by more than 69 percent. Of course this decrease comes against the backdrop of bankruptcy reform that went into effect in late 2005. Due to stricter laws and qualification guidelines, more consumers have begun turning to consolidation companies for debt assistance. To get a free quote from one of these companies, submit a form today! Or if you would like to browse for more information about Massachusetts consumer protection laws, check out these pages: Massachusetts Consumer Credit Counseling Services Massachusetts Bankruptcy Laws Massachusetts Debt Collection |
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