Bankruptcy in Massachusetts: Chapter 7 vs. Chapter 13 Explained
- Cathy A. Marino
- 4 days ago
- 3 min read
If you’re struggling with debt and searching for a Massachusetts bankruptcy lawyer, you’re not alone and you’re definitely not failing. Bankruptcy exists to give people a legal path to reset, rebuild, and move forward.
One of the most common points of confusion is the difference between Chapter 7 and Chapter 13 bankruptcy. While both offer relief from overwhelming debt, they work in very different ways. Understanding which option fits your situation can make a major difference in your financial future.
Let’s break it down in plain English.
Chapter 7 Bankruptcy: The Basics
Chapter 7 bankruptcy is often referred to as “liquidation bankruptcy.” It’s designed for individuals who cannot realistically repay their debts.
In a Chapter 7 case:
Most unsecured debts (such as credit cards, medical bills, and personal loans) are discharged, meaning they are legally wiped out.
A bankruptcy trustee may sell non-exempt assets to repay creditors.
Many people in Massachusetts keep all or most of their property due to generous state exemptions.
The process is relatively fast, typically lasting 3–4 months.
Chapter 7 is often the right choice for people with limited income, little disposable cash, and primarily unsecured debt.
Chapter 13 Bankruptcy: The Basics
Chapter 13 bankruptcy is a repayment plan, not a liquidation.
In a Chapter 13 case:
You enter into a court-approved repayment plan lasting 3 to 5 years.
You make monthly payments based on what you can afford.
You may be able to catch up on mortgage arrears, car loans, or tax debt.
You keep all of your property while repaying some or all of your debts over time.
Chapter 13 is commonly used by people who:
Have regular income
Want to prevent foreclosure or repossession
Don’t qualify for Chapter 7
Need time and structure to catch up financially
Eligibility: Chapter 7 vs. Chapter 13
Eligibility is one of the biggest differences between these two chapters. Chapter 7 eligibility is determined by the means test, which compares your income to the Massachusetts median income and evaluates your expenses.
Chapter 13 eligibility requires:
A steady source of income
Debt limits within federal guidelines
The ability to make monthly plan payments
An experienced bankruptcy attorney can evaluate your income, expenses, assets, and goals to determine which option you qualify for—and which actually benefits you.
Pros and Cons of Each Option
Chapter 7 – Pros
Fast debt relief
No repayment plan
Lower overall cost
Clean financial reset
Chapter 7 – Cons
Possible asset liquidation (depending on exemptions)
Does not help with mortgage arrears
Income limits apply
Chapter 13 – Pros
Keep your home and car
Catch up on missed payments
Protect co-signers
Structured repayment
Chapter 13 – Cons
3–5 year commitment
Requires consistent income
More complex process
Which Bankruptcy Option Is Right for You?
There’s no one-size-fits-all answer. The right choice depends on:
Your income
The type and amount of debt you have
Whether you want to protect specific assets
Your long-term financial goals
That’s why speaking with a Massachusetts bankruptcy lawyer before you file bankruptcy in MA is so important. The right guidance can save you time, money, stress and help you avoid costly mistakes.
Schedule a Bankruptcy Consultation
If you’re feeling overwhelmed by debt and unsure whether Chapter 7 or Chapter 13 bankruptcy is right for you, a consultation can give you clarity and peace of mind.
A knowledgeable bankruptcy attorney can review your situation, explain your options, and help you choose the path that gives you the strongest possible fresh start.
📞 Call the Law Office of Cathy A. Marino at (617) 846-4041 today to schedule your bankruptcy consultation. Relief is closer than you think.
⚖️ Disclaimer: This article provides general information only and is not legal advice. For advice about your specific situation, please consult an attorney.