The Law Offices of Daniel J. Dufresne

Bankruptcy
Personal Bankruptcy
Consumer bankruptcy, also known as Chapter 7 or 13, is an option for individuals and married couples who are overwhelmed by their debts and in need of a fresh start. The firm charges a flat fee for this legal service, which includes the cost of filing a voluntary petition and appearance at a 341 hearing (and at the Confirmation hearing in the case of Chapter 13).

Please note that this basic fee
does not include the cost of litigation against creditors or other parties in what are known as adversary proceedings in U.S. Bankruptcy Court. If you decide to engage the firm, you should notify your attorney immediately of any pending or likely litigation being brought against you.

Chapter 7

A Chapter 7 case begins when the debtor files a petition with the bankruptcy court serving the area where the individual lives.  In addition to the petition, the debtor must also file with the court:

  • schedules of assets and liabilities;
  • a schedule of current income and expenditures;
  • a statement of financial affairs; and
  • a schedule of executory contracts and unexpired leases.

Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year, as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began). Individual debtors with primarily consumer debts have additional document filing requirements. They must file:

  • a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling;
  • evidence of payment from employers, if any, received 60 days before filing;
  • a statement of monthly net income and any anticipated increase in income or expenses after filing; and
  • a record of any interest the debtor has in federal or state qualified education or tuition accounts. 
A husband and wife may file a joint petition or individual petitions. Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors. In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must provide the following information:
  1. A list of all creditors and the amount and nature of their claims;
  2. The source, amount, and frequency of the debtor's income;
  3. A list of all of the debtor's property; and
  4. A detailed list of the debtor's monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.

Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse are required so that the court, the trustee and creditors can evaluate the household's financial position.

Will I lose all of my property in Chapter 7?

No. Among the schedules that an individual debtor will file is a schedule of "exempt" property. The Bankruptcy Code allows an individual debtor to protect some property from the claims of creditors. In Massachusetts, the individual debtor has the option of choosing between a federal package of exemptions or the exemptions available under Massachusetts law. The debtor should consult an attorney to determine which package of exemptions best suits the debtor's needs.

Will filing Chapter 7 stop my creditors from hounding me?

For the most part. Filing a petition under chapter 7 "automatically stays" (stops) most collection actions against the debtor or the debtor's property. But filing the petition does not stay certain types of actions, and the stay may be effective only for a short time in some situations.  As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

My attorney filed my petition. What happens next?

Between 20 and 40 days after the petition is filed, the case trustee will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held no more than 60 days after the order for relief. During this meeting, the trustee puts the debtor under oath, and both the trustee and creditors may ask questions. In many straightforward Chapter 7 cases, the meeting with the trustee takes only a few minutes and creditors may not even bother to appear. The debtor must attend the meeting, however, and answer questions regarding the debtor's financial affairs and property. If a husband and wife have filed a joint petition, they both must attend the creditors' meeting and answer questions. Within 10 days of the creditors' meeting, the U.S. trustee will report to the court whether the case should be presumed to be an abuse.

The debtor should cooperate with the trustee and provide any financial records or documents that the trustee requests. The trustee is required to ask the debtor certain questions at the meeting of creditors. Some trustees provide written information on these topics at or before the meeting to ensure that the debtor is aware of this information. Bankruptcy judges are prohibited from attending the meeting of creditors.

Chapter 13

A Chapter 13 case begins by filing a petition with the bankruptcy court serving the area where the debtor has a domicile or residence. Unless the court orders otherwise, the debtor must also file with the court:

  • schedules of assets and liabilities;
  • a schedule of current income and expenditures;
  • a schedule of executory contracts and unexpired leases; and
  • a statement of financial affairs;
  • a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling;
  • evidence of payment from employers, if any, received 60 days before filing;
  • a statement of monthly net income and any anticipated increase in income or expenses after filing; and
  • a record of any interest the debtor has in federal or state qualified education or tuition accounts.
  • a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began).
A husband and wife may file a joint petition or individual petitions. The courts must charge a $235 case filing fee and a $46 miscellaneous administrative fee.  If a joint petition is filed, only one filing fee and one administrative fee are charged. Failure to pay these fees may result in dismissal of the case.

In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must compile the following information:

  1. A list of all creditors and the amounts and nature of their claims;
  2. The source, amount, and frequency of the debtor's income;
  3. A list of all of the debtor's property; and
  4. A detailed list of the debtor's monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.

Married individuals must gather this information for their spouse regardless of whether they are filing a joint petition, separate individual petitions, or even if only one spouse is filing. In a situation where only one spouse files, the income and expenses of the non-filing spouse is required so that the court, the trustee and creditors can evaluate the household's financial position.

When an individual files a chapter 13 petition, an impartial trustee is appointed to administer the case. In some districts, the U.S. trustee or bankruptcy administrator appoints a standing trustee to serve in all chapter 13 cases. The chapter 13 trustee both evaluates the case and serves as a disbursing agent, collecting payments from the debtor and making distributions to creditors.

Filing the petition under chapter 13 "automatically stays" (stops) most collection actions against the debtor or the debtor's property. Filing the petition does not, however, stay certain types of actions, and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors generally may not initiate or continue lawsuits, wage garnishments, or even make telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.

Chapter 13 also contains a special automatic stay provision that protects co-debtors. Unless the bankruptcy court authorizes otherwise, a creditor may not seek to collect a "consumer debt" from any individual who is liable along with the debtor. Consumer debts are those incurred by an individual primarily for a personal, family, or household purpose.

Individuals may use a chapter 13 proceeding to save their home from foreclosure. The automatic stay stops the foreclosure proceeding as soon as the individual files the chapter 13 petition. The individual may then bring the past-due payments current over a reasonable period of time. Nevertheless, the debtor may still lose the home if the mortgage company completes the foreclosure sale under state law before the debtor files the petition. The debtor may also lose the home if he or she fails to make the regular mortgage payments that come due after the chapter 13 filing.

Between 20 and 50 days after the debtor files the chapter 13 petition, the chapter 13 trustee will hold a meeting of creditors. If the U.S. trustee or bankruptcy administrator schedules the meeting at a place that does not have regular U.S. trustee or bankruptcy administrator staffing, the meeting may be held up to 60 days after the debtor files. During this meeting, the trustee places the debtor under oath, and both the trustee and creditors may ask questions. The debtor must attend the meeting and answer questions regarding his or her financial affairs and the proposed terms of the plan. If a husband and wife file a joint petition, they both must attend the creditors' meeting and answer questions. Bankruptcy judges are prohibited from attending the creditors' meeting. The parties typically resolve problems with the plan either during or shortly after the creditors' meeting. Generally, the debtor can avoid problems by making sure that the petition and plan are complete and accurate, and by consulting with the trustee prior to the meeting. Once the plan is agreed upon, which sometimes requires re-drafting the plan one or more times, the next step is to present the plan to the court for approval.

After the meeting of creditors, the debtor, the chapter 13 trustee, and those creditors who wish to attend will come to court for a hearing on the debtor's chapter 13 repayment plan. Once the court approves the plan, the debtor must commit to it for between three to five years. After the payment plan is successfully completed, certain debts will be completely discharged while other debts (often mortgages and car payments) will continue.



This firm is a Debt Relief Agency as defined in § 101 of the US Bankruptcy Code. The firm assists persons filing for bankruptcy protection.

Disclaimer: Nothing on this site shall be construed as providing any assistance to any “assisted person” as defined by the U.S. Bankruptcy Code, or to any debtor or individual who is contemplating filing bankruptcy or as any notice or disclosure required by § 527 of the Bankruptcy Code.