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(The following is for educational purposes only, and it should not be construed as legal advice. PayingPaul.Com makes no guarantees about the accuracy of any information included here. For legal advice, please consult an attorney or lawyer in your state).
The New Bankruptcy in Massachusetts
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
The New Bankruptcy in Massachusetts
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