People and businesses get overwhelmed with debt for a number of reasons. For some, it may be because they found themselves in circumstances beyond their control. For others, it might have been plans made that were within their control, but things did not go as planned. And for many, it may be a little of both. For many, the sub-prime melt-down has pushed people into a financial condition they never predicted.

Whatever the reason, it leaves many feeling helpless and alone. There is also the confusion of simply not knowing where to turn and what to do. It is important to know that there are options, there are choices, and there is hope. Despite the sweeping changes to the US Bankruptcy Code in 2005, relief is still available.

Dealing with the debt has been stressful enough. Our job is to get our clients moving forward again by helping them through the bankruptcy process. To learn more about the bankruptcy services we can provide, please click on the links below.

Personal Bankruptcy | Business Bankruptcy | Adversary Proceedings

Personal Bankruptcy

Changes in expenses, rises in energy costs, and increasing monthly mortgage payments, a sudden job loss or family health crisis can hurt one's bottom line. Sometimes just one can lead consumers to unmanageable debt. And with the bill collectors and their lawyers in hot pursuit it can make a tough situation even tougher.

We bring our deep knowledge of bankruptcy law as well as extensive experience in the U.S. Bankruptcy Courts to help our clients to make informed decisions. Successfully guiding our clients through the bankruptcy process is our goal.

Generally, there are two bankruptcy Chapters consumers use the most: Chapter 7 and Chapter 13, although some consumers can still use Chapter 11.

Before reading about these chapters, it is important to know about the protections afforded by any bankruptcy chapter: the automatic stay. When a bankruptcy petition is filed, Section 362 of the US Bankruptcy Code imposes a stay on all collection activities. Foreclosures must stop in their tracks; automobiles cannot be repossessed; and collection activities must cease. While the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made some significant changes to Section 362, the protections are still there for most debtors.

Chapter 7

A Chapter 7 bankruptcy, often called a "straight bankruptcy," is a liquidation. In this situation, the debtor files a petition with the court, listing his or her debts, expenses, assets and income. Any property that is not exempt from bankruptcy is liquidated (i.e., sold off) to pay off the debts. If the debtor has no assets, the debts are simply wiped clean through a discharge.

What happens when I file?

Once you receive your credit counseling certificate, your petition is filed with the bankruptcy court and assigned to a trustee on the Chapter 7 trustee panel. Usually, the trustee is a local lawyer. The trustee represents the creditors and is responsible for ensuring your petition is correct and accurate and that you are entitled to a discharge. The trustee also is responsible for collecting any non-exempt property, selling it and disbursing the proceeds to the creditors.

Within about 30 days, you meet with the Chapter 7 Trustee (along with your attorney) at what is called a "Meeting of Creditors" or a Section 341 meeting. Your attorney will be able to explain what you can expect at that meeting.

How can I keep my property?

Property that is exempt from Chapter 7 bankruptcy may not be liquidated or sold to pay creditors. When we say "exempt" we mean that it cannot be sold to pay creditors. Federal and state laws protect some types of property for their full value. (For example, under state law, you can exempt an individual retirement account.) Other types of property, however, are protected only up to a certain amount.

Only a qualified and experienced bankruptcy attorney can determine what property may be exempted—and do so while trying to protect as much of your property as legally permissible. For more details on what specific property is or may be exempt in your case, please contact us.

Why would I want to file a Chapter 13 if I can file a Chapter 7?

Your attorney must evaluate many factors before making an informed and sound recommendation about which bankruptcy chapter is right for you. Income, debt/asset ratio and availability of exemptions are among the factors an attorney considers. The US Bankruptcy Code, and the ever-evolving case law will dictate what chapter will be best for you. To learn about your options and see which bankruptcy chapter best fits your needs and financial circumstances, please contact us.

I am heading into foreclosure! Can I save my house?

This is not an easy question to answer without knowing a lot more and it is to depend on your unique circumstances. If you are many months behind in payments, you should probably consider Chapter 13. If you know you cannot afford your future mortgage payments, you might benefit from Chapter 7.

What about my credit? Won't it be ruined forever?

Not necessarily. A bankruptcy is a derogatory mark on your credit report. However, so are credit counseling, charge-offs, missed payments, foreclosures and repossessions. If you're contemplating bankruptcy, you probably have one or more of these items already on your credit report.

The bankruptcy will stay on your credit report for 10 years. However, there are legitimate methods of reestablishing your credit, such as reaffirming a secured debt or obtaining a secured credit card. Using those accounts responsibly and paying the debts on time will eventually help you reestablish your credit.

Please be mindful that your ability to get credit depends both on factors within your control—and factors beyond your control, such as the economy, a credit crunch and job stability.

What information should I bring with me to my consultation?

To get the most out of your first consultation with us, you should have the following information:
• 6 months of pay stubs and income information,
• an estimate of your debt, both secured and unsecured (or just bring your bills
• an estimate of your monthly expenses, and
• information concerning all assets: real estate, automobiles, etc.

What other information will I eventually need?

You will need copies of your tax records to obtain necessary information for your petition. This would include returns or if you do not have returns, transcripts from the IRS and the Massachusetts Department of Revenue. You will require an appraisal of your real estate or any other assets you have as well as copies of bank statements, including canceled checks

Why do I need a lawyer? Isn't just paperwork?

There are document preparation services that will prepare the documents necessary for a bankruptcy filing for a lesser cost than what you would pay an attorney. However, they are forbidden by law to give you legal advice. There are other duties debtors have, including disclosing important real estate documentation, income information, as examples. Additionally, the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, imposed additional requirements on debtors that if not met can result in the case being dismissed.

If you are thinking about personal bankruptcy, please contact us.

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Chapter 11

While businesses seek Chapter 11 bankruptcy protection, Chapter 11 is also available for individuals as well as small businesses. Whether Chapter 11 is right for you or your business situation depends on the unique circumstances of your situation.

Generally, most people struggling with debt will benefit more from a Chapter 7 or a Chapter 13. However, a debtor who wants to benefit from Chapter 13 can only have a certain amount of debt. If the debt threshold exceeds that amount, they are unable to use the protections offered by Chapter 13.

Chapter 11 can offer a person with high debt or a struggling business a a bit of breathing room to regroup and reorganize. No Chapter 11 is typical since every person and every business has their own unique reasons for being involved in the process.. To learn what Chapter 11 can do in your specific situation, contact us

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Chapter 13

A bankruptcy filed under Chapter 13 is designed for people with regular income who want to or can pay their debts but are presently unable to do so. A Chapter 13 bankruptcy enables the debtor, under court supervision and protection, to propose and carry out a plan for repaying creditors over an extended period of time.

Who is eligible?

Corporations or partnerships are not eligible. However, people who are employed, sole proprietors and the self-employed are eligible. There are debt limits. Check with a bankruptcy lawyer to see if you can qualify.

What about interest payments and late charges? How does a Chapter 13 affect those?

A creditor must file a proof of claim with the bankruptcy court. This document states what you owe the creditor on the date you filed for protection. The amounts on the proofs of claim are incorporated into the repayment plan, and the plan payments are based upon these amounts. If a creditor does not file a proof of claim by the date the court establishes, it does not get paid and the debt is discharged at the end of a successfully completed plan. For most creditors, interest and late charges cannot be added to the amount stated on the proof of claim.

How long is the plan?

Plans can range from 36 to 60 months, depending on your particular situation. The length of your plan depends on the amount of money you make. This is also referred to as "the applicable commitment period." Your attorney can explain what this means once your income has been evaluated.

I am heading into foreclosure! Can I save my house?

Chapter 13 can be used to stop a foreclosure and let you pay back what you owe to the mortgage company over time. It can also give you protection if you want to put your home on the market. Whether it can work for you will depend on the facts of your unique situation.

I've got too much debt! I can't pay all of my debt in 36 or even 60 months! What can I do?

In a Chapter 13, you pay back your unsecured creditors (such as credit cards, utilities) at a percentage. Therefore, if you have $65,000 in credit card debt, you may be able to pay back only 10% or 20% over the life of your plan. When you are finished with your plan payments, any most of the remaining unsecured debt is discharged or erased.

Secured debt, such as mortgages and car payments, has different repayment rules and those rules are going to depend on the amount of secured debt you have.

What's the catch?

There is no catch. Once you make the payments under the plan, the remaining obligations are discharged and you have your fresh start. The discharge has the effect of releasing you from your debts covered in the plan.

Are all debts dischargeable?

No. Certain debts are not dischargeable, such as certain taxes, alimony, child support, student loans, are some of the examples of debts that are not discharged. For more information on how these rules apply in your situation, please contact us

If I cannot pay my mortgage, how can I afford an attorney?

That really is a good question, and fortunately, we have a good answer. One of the benefits of Chapter 13 is that a debtor may be able to pay some, and in some cases most, of the fees and costs associated with filing Chapter 13 as part of the Chapter 13 plan that is discussed above. Ask us for more information on how this works.

It sounds too easy!

There's no way you can learn about all the benefits as well as your rights and obligations under Chapter 13 in a website. Every person has unique circumstances than an attorney must evaluate. To find out whether it is the best option for you, please contact us.

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Business Bankruptcy

For many reasons, business may face serious cash flow issues at one point or another. Sometimes, businesses make regrettable decisions. Other times, customers may have made some bad decisions that strain the bottom line of the business. Pressures from vendors and creditors can make the mounting pressures even worse.

Many businesses, especially those 10 years and younger, started with personal guarantees on certain debts. As a result, the financial concerns of struggling business owners can extend beyond their own business. Indeed, it is not uncommon for personal assets and finances to be at risk.

For businesses in financial distress, bankruptcy may be the best option. Some businesses seek bankruptcy protection under Chapter 11 while they reorganize – giving themselves a little breathing room. Others may use Chapter 7 to wind down operations, get assets efficiently liquidated, and allow the owners to move on.

No matter what the situation or what chapter might work best, business bankruptcies can be complex, especially if they involve issues of unpaid wages, benefits, deposits on services or merchandise, or fiduciary tax contributions and payments. In these situations, you need competent counsel who will give you straight answers, guide you through the process and give you the tools and information you need to move forward.

To learn more about what we can do for your business, please contact us.

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Adversary Proceedings

An Adversary Proceeding is a law suit filed in the bankruptcy court. Creditors, Debtors and Trustees may initiate these actions. These proceedings are separate from a bankruptcy filing where a debtor seeks a discharge or an opportunity to reorganize. An Adversary Proceeding is very similar to civil suits filed in other courts.

There are a number of reasons why an Adversary Proceeding may be brought. These include, but are not limited to situations where

-A creditor seeks a judgment of non-dischargeability of a debt;
-A debtor seeks for violations of the automatic stay; or
-A trustee seeks the turn over of estate property.

Adversary Proceedings (APs) do not occur in every bankruptcy filing. According to the US Bankruptcy Court (District of Massachusetts) PACER website, a total of 2,171 bankruptcy cases were filed in the last quarter of 2007 but only 86 Adversary Proceedings were filed. Statistically, most debtors will not see any AP’s filed in their bankruptcy matters. However, if an AP is filed, or needs to be filed, it is important to have experienced and skilled counsel protecting your interests.

I already have a bankruptcy attorney I trust. Do I need another attorney to help me with an Adversary Proceeding?

Have a candid and frank discussion with your bankruptcy attorney. If they do not have the expertise to litigate an Adversary Proceeding consider meeting with an attorney who has litigation experience. Attorney McLeod has almost 17 years of litigation experience in state and federal courts in Massachusetts, Connecticut and New York as well as other jurisdictions. Bankruptcy attorneys have turned to us for that litigation experience. We represent the client in the Adversary Proceeding while their bankruptcy lawyer continues to represent them in the bankruptcy matter.

I need to bring an Adversary Proceeding against a party. What do I do?

First and foremost, talk to a lawyer that understands the law and the process. The lawyer will prepare a complaint and file it with the US Bankruptcy Court (along with the appropriate filing fee). Once the Defendant responds to the complaint, and assuming that there are no motions challenging the complaint, a pretrial order enters and a discovery phase will begin. During this phase, both sides try and learn more about the facts supporting the claims and defenses. In doing so, they are allowed to use the tools provided for in the Federal Rules of Bankruptcy Procedure, which in large part, incorporates the Federal Rules of Civil Procedure. This process all leads to either motions seeking judgment, which are called Motions for Summary Judgment, or a trial where evidence is presented, witnesses testify and a decision is rendered.

How long will the process take?

There is no clear answer to this. Every case is different and every case presents its own unique issues.

What are the chances the Adversary Proceeding will settle?

Statistically, the chances are good. Settlement of cases will depend on the nature of the case, and the dynamics of all of the parties involved. As with most civil matters, only a small percentage ever reach trial. Some settle after the complaint is filed, some settle on the eve of trial, and some settle some time in between. Every case is different.

In short, if an Adversary Proceeding has been filed or needs to be filed please contact us.

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Required legal notice: We are a Debt Relief Agency as is defined in 18 USC Section 101 of the US Bankruptcy Code. We assist people who file for bankruptcy protection.