Times are generally tough for one group of people or another and it really doesn’t matter what the overall economic situation is in the country. Chances are, there are people out there — in Massachusetts and everywhere else — who are considering bankruptcy as an option to deal with their financial troubles. Well, in the Bay State, what to know about bankruptcy in Massachusetts can be important no matter the economy.

Keep in mind that the U. S. Congress made a number of changes (25 of them, to be exact) to the federal bankruptcy laws that govern bankruptcy throughout the nation. These changes were made in 2005, meaning that certain older practices may not now be valid. Additionally, each state has ensured that certain exemptions to the federal law have been placed on the books that also govern what most hope is a very last resort financial action taken by people.

Bay State residents can expect several different exemptions that revolve around the exclusion of certain property, for the most part. It’s hard to put down exactly when might be the right time to file for bankruptcy, just as there are no definites when it comes to what can be included and what can be excluded from a filing. As was said, there are many different reasons for why people file, with home foreclosure and job loss be two of the biggest ones.

Regardless of the reason for filing, it’s wise to learn what kinds of bankruptcy can be filed for in Massachusetts and the rest of the states. Generally, there are two different kinds: Chapter 7 (sometimes known as liquidation) and Chapter 13 (which is a reorganization and is more familiarly known as “Wage Earner Bankruptcy”). Chapter 7 is the most common and is looked at as a clean slate.

Chapter 7 is the most popular (if that’s the word to use) form of bankruptcy that most people file for when they’re looking for a fresh start or a clean slate. Today, this form of bankruptcy will require a means test and a hearing to determine if the petitioner meets the criteria for Chapter 7. Once it’s approved, all but exempt assets will be sold off and then creditors paid off. Chapter 13 is a reorganization and then a set payment schedule.

Bankruptcy in Massachusetts has its beginning in a preliminary filing that’s accompanied by a statement of financial affairs and then a subsequent hearing to decide on if Chapter 7 will be approved. All Chapter 7 filings involve payment of a $299 fee and this form of bankruptcy is generally the most common form or action taken. It’s usually best to hire an attorney experienced in bankruptcy rather than to attempt to do this on one’s own.

Understanding the issue of filing for bankruptcy in Massachusetts can be scary. It’s important that you have confidence in your decisions and an experienced bankruptcy law firm MA can help guide you down the right path.