What is a Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is designed to provide a honest individual debtor a “fresh start” by ‘discharging’ or eliminating the debtor’s obligation to pay their debt. The person filing the bankruptcy petition is referred to as the “debtor”.  At the conclusion of the Chapter 7 proceeding the debtor has no liability for discharged debts. This means that the debtor’s no longer has to pay their credit card bills, personal loans, medical bills, bank loans, finance company loans, and credit union loans. It can also eliminate unsecured debts left over from a divorce, a failed business, personal guarantees, and trade creditors. Chapter 7 Bankruptcy even allows you to eliminate certain income taxes over 3 years old other debts which were created before the bankruptcy was filed. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged, like child support or alimony. Moreover, a bankruptcy discharge does not extinguish a lien on property.

Who qualifies to file a Chapter 7 Bankruptcy?

• Means Test: You must pass a means test that compares your income to the median income for your state. If your income is below the median, you typically qualify².  The bankruptcy means test examines financial records, including income, expenses, and secured and unsecured debt to determine if your disposable income is below the median income (50% lower, 50% higher) for your state. The means test income level varies by state.
• Disposable Income: If your income exceeds the median, you may still qualify if your disposable income (income after essential living expenses) is low enough.
• Credit Counseling: You must complete credit counseling from an approved agency within 180 days before filing for bankruptcy.
• No Previous Bankruptcy: You cannot have had a Chapter 7 bankruptcy dismissed in the past 180 days due to certain rule violations.
• Non-Exempt Assets: You may need to sell nonexempt assets to pay off creditors, but this is rare.

No more stress!

Chapter 7 Bankruptcy eliminates certain types of unsecured debts, but more importantly, it helps you get rid of the stress and worry that comes with having to deal with crippling amounts of debt – and the collection calls that never stop.

In our experience, most people do not file bankruptcy to eliminate debt – they file bankruptcy to eliminate the stress.

Maintain your home and your car

You can retain the majority of your assets even if you file for bankruptcy protection. Their home is protected, their personal property is protected, and even their retirement plans are protected. 

If there is a mortgage on your home, the creditor holding the mortgage still needs to be paid. You still need to make your car payments if you wish to keep your car. 

Creditor calls, lawsuits and foreclosures stop when you file bankruptcy

As soon as you file your bankruptcy petition, the  “automatic stay” takes effect.  This means that any lawsuit against you to collect money, foreclose your home, or evict you from your residence, STOPS.   This bankruptcy PROTECTION is IMMEDIATE. The Court immediately sends a notice  to all creditors, demanding that they leave you alone.

If a creditor does NOT comply, the Court will punish the creditor severely. The creditor must stop all collection calls – at home and at work – stop writing collection letters, stop all lawsuits, and stop all garnishments.

What is a Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is a form of debt relief that allows individuals with regular income to pay off all or part of their debts over a period of time not to exceed five years. In its simplest form, it is a personal debt reorganization. For example, for those debtors facing a foreclosure because they have not made a mortgage payment for a number of months, the Chapter 13 plan of reorganization would enable the debtor to pay the arrearage (the amount of the past due payments) over a period of 5 years, continuing to make their regular mortgage payments, and save the home from foreclosure.  Debtors pay a percentage of their unsecured debts (credit cards, personal loans, etc) based upon their disposable income.

Who qualifies to file a Chapter 13 Bankruptcy?

Any individual with regular income is eligible as long as their  unsecured debts are less than $526,700 and secured debts are less than $1,580,125 as of the date of filing for bankruptcy.

Chapter 13 benefits!

• Protection from Foreclosure/Repossession: It can stop foreclosure on a home or repossession of other secured property. 
• Debt Consolidation: It allows debtors to consolidate their debts into one monthly payment. 
• Manageable Payments: The plan can help make payments more manageable for the debtor. 
• Debt Relief: It provides a path to debt relief and potentially a fresh start. 

Creditor calls, lawsuits and foreclosures stop when you file bankruptcy

As soon as you file your bankruptcy petition, the  “automatic stay” takes effect.  This means that any lawsuit against you to collect money, foreclose your home, or evict you from your residence, STOPS.   This bankruptcy PROTECTION is IMMEDIATE. The Court immediately sends a notice  to all creditors, demanding that they leave you alone.

If a creditor does NOT comply, the Court will punish the creditor severely. The creditor must stop all collection calls – at home and at work – stop writing collection letters, stop all lawsuits, and stop all garnishments

Why Choose Cohen Cleary, P.C.?

• Experienced Attorneys: We’ve successfully helped individuals, families, and businesses navigate financial hardship through legal solutions.
• Personalized Guidance: We develop strategies tailored to your unique situation and goals.
• Compassionate Support: You are not just a case number—you’re a valued client.
• Full-Service Representation: From initial consultation to court proceedings, we’re with you every step of the way.

Is Bankruptcy Right for You?

Bankruptcy is not the end—it’s a new beginning. If you’re feeling trapped by debt or facing creditor lawsuits, we can help you make an informed decision.

We offer confidential consultations to evaluate your situation and explain your rights and options under federal and Massachusetts/Rhode Island bankruptcy law.

Contact Us Today

Let us help you take the first step toward financial freedom.

• Call: (508) 880-6677
• Email: info@cohencleary.com
• Serving Massachusetts and Rhode Island. 

Cohen Cleary, P.C. – Legal Guidance. Real Solutions.