Filing Chapter 13 Bankruptcy for business owner
August 11, 2010 By Greater Boston Law
Frederic was an auto mechanic with his own business in Alabama before moving to Massachusetts. He had a home mortgage with a balance of $360,000, about the amount his house was worth at the time. He also had a second mortgage with a balance of $60,000.00. He earned $90,000.00 per year at his new job. When he left Alabama he defaulted on the business lease for his auto repair garage. It was a ten year lease and a judgment was issued by the Alabama courts against him in the amount of $370,000.00 for the balance of rent due on the lease. This debt plus credit card debt of $70,000.00 exceeded the unsecured debt limit for filing Chapter 13.
We filed him under Chapter 13 anyway and argued to the Bankruptcy Court judge that the judgment from Alabama was not liquidated, meaning the balance due would need to be reduced if the building owner found a new tenant in the next ten years, which was very likely. Therefore, the judgment should not count as unsecured debt. The Court agreed and allowed Frederic's Chapter 13 to go forward. For a payment of $420.00 per month for five years to a Chapter 13 Trustee, Frederic was able to eliminate all of his credit card debt and strip off his second mortgage. In addition, he had to continue making his first mortgage payments and car payments as well as household expenses, which he was able to do comfortably.
Filing Chapter 7 Bankruptcy for Stoughton, MA Family
August 1, 2010 By Greater Boston Law
James and Sarah of Stoughton, MA had 2 young children, owned a home, earned together about 85,000.00 per year. They came to us drowning in credit card debt totaling over $45,000.00 plus another $3,000.00 in medical bills. After payment of their living expenses such as mortgage, taxes, insurances, utilities, food, clothing and expenses related to raising their children, not to mention monthly payments on two vehicles, they had nothing left for the credit card debt or medical bills. There were numerous phone calls and two lawsuits filed against them by collection agents. One creditor obtained a judgment in Quincy District Court and had it recorded at the registry of deeds, attaching their interest in their home for payment of the debt.
We filed them under Chapter 7, for which they qualified based on their yearly income and household size. Less than four months after filing, the credit card debt and medical bills were discharged by the bankruptcy court. They are now able to pay their mortgage, car payments and household expenses comfortably and are working toward re-establishing their credit by using cards responsibly.
