When debt becomes unmanageable, it can affect nearly every aspect of your life. Collection calls, mounting credit card balances, medical bills, and the threat of lawsuits or wage garnishments can make it difficult to move forward. Chapter 7 bankruptcy provides individuals and families in Massachusetts with a legal process to eliminate many types of debt and regain financial stability.
We help Massachusetts residents understand their bankruptcy options, protect their assets, and navigate the Chapter 7 process. Whether you are struggling with credit card debt, facing collection lawsuits, or simply unable to keep up with your monthly payments, our attorneys can help determine whether Chapter 7 bankruptcy is right for you.
Chapter 7 bankruptcy, often called “liquidation bankruptcy,” allows qualifying individuals to discharge many unsecured debts through the federal bankruptcy court. A discharge eliminates your personal legal obligation to repay certain debts, allowing you to move forward without the burden of those outstanding balances.
Unlike Chapter 13 bankruptcy, which generally involves a repayment plan lasting three to five years, Chapter 7 typically does not require monthly payments to creditors. Most straightforward Chapter 7 cases take approximately three to six months to complete.
Chapter 7 bankruptcy can eliminate many common types of debt, including:
Some obligations, including most child support and alimony obligations, certain tax debts, and many student loans, generally cannot be discharged through Chapter 7 bankruptcy. Our attorneys can review your financial circumstances and explain which debts may qualify for discharge.
Eligibility for Chapter 7 bankruptcy depends on several factors, including your income, household size, financial circumstances, and prior bankruptcy filings.
One important consideration is the bankruptcy “means test,” which compares your household income against the applicable Massachusetts median income. Individuals whose income falls below the applicable median generally satisfy the income portion of the means test. Those with higher incomes may still qualify after accounting for certain allowable expenses and financial obligations.
Even if you earn a steady income or own valuable property, Chapter 7 bankruptcy may remain an option. We can evaluate your eligibility and help determine the most appropriate approach to addressing your debts.
The Chapter 7 means test helps determine whether you qualify for Chapter 7 bankruptcy based on your income and certain allowable expenses. The test evaluates whether you have sufficient disposable income to repay a portion of your outstanding debts.
The first step involves calculating your average monthly income over the six full calendar months preceding your bankruptcy filing. This amount is annualized and compared to the median household income in Massachusetts. If your income falls below the applicable median, you generally satisfy the income requirements of the means test.
For bankruptcy cases filed on or after July 15, 2026, the Massachusetts median household income limits are:
For households with more than four people, an additional $11,100 is added for each household member.
If your household income exceeds these limits, you may still qualify for Chapter 7 bankruptcy. The second portion of the means test considers certain allowable expenses, including housing, transportation, taxes, child support, child care, health care, and other necessary living expenses. These deductions help determine whether you have sufficient disposable income to repay creditors.
If the means test indicates that you have sufficient income to repay a portion of your debts, Chapter 13 bankruptcy may be another option. Chapter 13 generally involves a repayment plan lasting three to five years and may allow you to catch up on past due mortgage payments, vehicle loans, or certain tax obligations while retaining your property.
Individuals whose debts are primarily business-related may be exempt from the Chapter 7 means test. Under the Bankruptcy Code, consumer debt is defined as debt incurred primarily for personal, family, or household purposes. See 11 U.S.C. § 101(8).
If most of your debts arose from operating a business or other non-consumer activities, the means test generally does not apply. However, determining whether a particular obligation qualifies as consumer or business debt may require additional review, particularly when personal credit cards or loans were used to cover business expenses.
We can review your income, expenses, and outstanding debts to determine whether you qualify for Chapter 7 bankruptcy. Even if your income exceeds the Massachusetts median, you may still be eligible for relief under Chapter 7.
One of the most common concerns about filing for bankruptcy is whether you will lose your home, vehicle, or personal belongings.
Massachusetts law provides exemptions that may protect certain property from liquidation during bankruptcy. Depending on your circumstances, these protections may cover equity in your home, a vehicle, retirement accounts, household furnishings, and other personal property.
Massachusetts residents may be eligible to use either the Massachusetts exemption system or the federal bankruptcy exemptions. Choosing the appropriate exemptions can make a substantial difference in protecting your assets.
Many individuals who file Chapter 7 bankruptcy are able to retain their property. However, the availability of exemptions depends on the value of your assets, outstanding liens, and your individual financial situation. If you have significant property that cannot be protected through available exemptions, the bankruptcy trustee may sell that property to repay creditors.
We carefully review your assets and available exemptions before filing to help you understand what property may be protected and identify any potential risks.
The Chapter 7 bankruptcy process generally involves several steps.
1. Review Your Financial Situation
We begin by reviewing your income, expenses, assets, and outstanding debts. This allows us to determine whether you qualify for Chapter 7 bankruptcy and identify potential issues before filing. We also review your available exemptions to determine what property you may be able to protect.
2. Prepare and File Your Bankruptcy Petition
We prepare the necessary bankruptcy petition, schedules, and financial disclosures. Once your case is filed, the automatic stay generally takes effect, preventing most creditors from continuing collection activities.
3. Attend the Meeting of Creditors
After filing, you must attend a meeting of creditors, also known as a Section 341 meeting. During this meeting, a bankruptcy trustee will ask questions about your financial circumstances and the information provided in your bankruptcy filings. Creditors may also attend and ask questions, although they frequently do not appear in routine consumer cases.
We help you prepare for this meeting and guide you through the process.
4. Receive Your Bankruptcy Discharge
In a typical Chapter 7 case, the bankruptcy court issues a discharge approximately three to four months after filing, provided all requirements have been satisfied and no objections or complications delay the process. The discharge generally eliminates your personal responsibility for qualifying debts.
Filing for Chapter 7 bankruptcy generally triggers an automatic stay under federal bankruptcy law. This protection takes effect immediately upon filing in most cases and requires creditors to stop many collection activities.
The automatic stay can prevent creditors from:
The automatic stay is subject to exceptions and limitations, particularly when an individual has filed previous bankruptcy cases. It also does not permanently eliminate mortgage liens or other secured interests in property. Secured creditors may also request permission from the bankruptcy court to continue certain collection actions.
We can explain how bankruptcy protection applies to your circumstances and help address collection actions that may already be underway.
Chapter 7 bankruptcy can be an effective option for individuals who have accumulated substantial unsecured debt and lack the financial resources to repay it.
However, every financial situation is different. Factors such as home equity, income, recent property transfers, outstanding tax liabilities, and the types of debts you owe can affect whether Chapter 7 is the appropriate solution.
In some circumstances, Chapter 13 bankruptcy or another debt resolution strategy may offer greater protection or flexibility. For example, Chapter 13 may allow homeowners who have fallen behind on mortgage payments to catch up over time while maintaining their regular mortgage payments. It may also provide an alternative for individuals who have valuable assets that would otherwise be at risk in a Chapter 7 bankruptcy.
We work with clients to evaluate their options and develop a practical approach based on their financial circumstances and long-term goals.
