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.

Whatever the reason for filing might be, it's also smart to understand that there are two different kinds that can be filed for in Massachusetts and every other state; Chapter 7 (sometimes called "clean slate" or "liquidation" bankruptcy) and Chapter 13 (sometimes called "Wage Earner Bankruptcy"). The kind of bankruptcy option that should be selected depends on what's trying to be done on the part of the filer in accordance with bankruptcy laws.

Generally speaking, the most common form of bankruptcy filed for is Chapter 7, and it's most often thought of as a fresh start for the filer. There's now a means testing process, a preliminary hearing and then an affirmative or negative judgment on whether or not Chapter 7 may proceed. If it's allowed to, an asset sell-off will occur (except for exempted property) and a payment made to creditors. Chapter 13 is a filing and then a repayment to creditors on a set 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.