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Restructuring and insolvency law in Massachusetts involves the legal processes that individuals and businesses undertake when they face financial distress or insolvency. This area of law addresses options for dealing with overwhelming debts, including reorganizing debts, liquidating assets, or reaching alternative arrangements with creditors. Massachusetts follows federal bankruptcy law, which provides standardized procedures under the United States Bankruptcy Code, but the state also has its own laws and exemptions that come into play. Whether you are a business looking to restructure operations or an individual overwhelmed by debt, understanding these legal frameworks is essential to making informed decisions.
Legal assistance is often necessary when navigating restructuring and insolvency due to the complexity of the law and the significant consequences of these proceedings. Here are some common situations where you may need a lawyer:
An experienced lawyer can help you evaluate your financial situation, explain your options, manage filings and negotiations, and protect your legal rights throughout the process.
Massachusetts restructuring and insolvency matters primarily operate under the federal Bankruptcy Code, but state law plays an important role, especially in the determination of which assets are exempt from creditors. Here are key aspects of local and federal law relevant to restructuring and insolvency in Massachusetts:
The most common types are Chapter 7 (liquidation for individuals and businesses), Chapter 11 (reorganization mostly for businesses but also some individuals), and Chapter 13 (debt repayment plans for individuals with regular income).
The appropriateness of bankruptcy depends on your debts, assets, income, and goals. A lawyer can evaluate your situation and explain alternative debt relief options and the effects of bankruptcy.
You can protect certain assets through either federal or Massachusetts state exemptions. This may include some home equity, vehicle equity, retirement accounts, and personal belongings. Exemptions have specific limits and conditions.
Yes, filing for bankruptcy triggers an automatic stay that generally stops all collection efforts, including phone calls, wage garnishments, lawsuits, and foreclosures while the bankruptcy is pending.
Yes, businesses may be able to restructure debts through negotiations, informal arrangements, or assignments for the benefit of creditors without formal bankruptcy filings. However, these alternatives require cooperation from creditors.
Chapter 7 involves liquidating non-exempt assets to pay creditors, after which remaining eligible debts are discharged. Chapter 13 involves entering a repayment plan, usually lasting three to five years, after which remaining eligible debts may be discharged.
A Chapter 7 bankruptcy generally stays on your credit report for up to 10 years, while a Chapter 13 bankruptcy remains for up to 7 years after completion of the repayment plan.
No, some debts, such as child support, most tax debts, student loans, most fines, and some personal injury liabilities, are not dischargeable in bankruptcy.
Yes, but there are time limits between filings for discharge. The required period depends on the type of bankruptcy previously filed and the chapter you plan to file under next.
Look for a lawyer with experience in bankruptcy and insolvency cases, knowledge of both federal and Massachusetts state law, clear communication, and a track record of effective client representation.
If you are seeking more information or assistance, these resources may be helpful:
If you need legal assistance with restructuring or insolvency matters in Massachusetts, you should:
Seeking timely legal advice can help protect your interests, reduce stress, and pave the way toward a more stable financial future.
