As a Maryland bankruptcy attorney I have found that many of my clients have misconceptions about which types of debts can be discharged in bankruptcy. I feel every consumer should be educated about which types of debts can be discharged before deciding to file for bankruptcy. Secured vs. Unsecured Debts I have found that a large portion of people do not know the difference between a secured debt and unsecured debt. Secured debts are those that have assets put up as collateral against the loan. Defaulting on secured debt leaves the asset legally available for seizure and liquidation by the creditor in efforts to satisfy the debt owed. The most common types of secured debts are mortgages and car loans. Some personal debts are secured debts if a person has agreed to use an asset as collateral for the loan agreement. Unsecured debts are those that do not have any assets secured as collateral. If a person defaults on an unsecured debt, the creditor has no legal claim over the asset … [Read more...]
Would I file bankruptcy if I were you?
The answer to that question is very difficult. I am often asked by clients, “Do you suggest I file?” “Would you file if you were me?” My basic rule of thumb is this if you feel that you can bail yourself out of debt within a six month time period then there is no reason to file a Chapter 7 bankruptcy. If on the other hand, at the end of six months if you as the client are still drowning in debt, if you have barely made a dent in the amount that you owe creditors, if the interest is piling up upon itself, if you are still being harassed by creditors to the point where you don’t feel you’re going to be able to function properly, and your mental, physical, and spiritual health is hurting; then I would certainly recommend a Chapter 7 bankruptcy to receive a fresh start. As far as Chapter 13, if you as the client have available money beyond your expenses each month, then I would recommend you do a Chapter 13, and repay either all or a portion of your debt over time. Chapter … [Read more...]
Can I Keep A Credit Card After Bankruptcy?
I saw this blog article on a Texas bankruptcy website and thought it was excellent, so I am passing it on to you. If you have any questions and are thinking about contacting a Maryland Bankruptcy Lawyer or Maryland Bankruptcy Attorney, call or e-mail us today and we will get back to you immediately. CAN I KEEP A CREDIT CARD AFTER BANKRUPTCY? Many bankruptcy debtors need a credit card for work. Whether it is necessary for business purchases or travel, it is common for a debtor to ask, “Can I keep one of my credit cards?” The answer to this question depends on a few circumstances. First, is there a balance on the card? If your card balance is zero on the day that you file your bankruptcy, then the credit card company is not a “creditor” for bankruptcy purposes, and you do not have to list the card as a debt in your bankruptcy schedules. Consequently, the credit card company will not receive notice of your bankruptcy case. Before you pay down your credit card debt, be … [Read more...]
Medical Bills and Credit Reports
A member of Congress has proposed a bill that would erase medical bills from credit reports. I think that is a great idea, for many reasons. See the article below, it is very interesting: New Bill Proposed Would Remove Medical Collections From Credit Reports In June 2011, a bill titled the Medical Debt Responsibility Act was introduced to Congress by a bipartisan group. This bill would require the three national credit reporting agencies, Equifax, Experian and TransUnion, to remove medical collection records of $2,500 or less from credit reports within 45 days of being paid or settled. Reasons In Support of The Bill 1. Medical bills are sent to collections too quickly by medical professionals 2. Collections can have a major impact on interest rates 3. To improve credit scores so that Americans can buy homes and stimulate the economy 4. Medical bills are not considered a planned event and are usually a necessity or an emergency 5. Some medical bills are disagreements … [Read more...]
Credit Cards After Bankruptcy?
The article below was posted on the Bankruptcy News website on May 31, 2011: Are Second Chance Credit Cards A Good Option For Rebuilding Credit? If you have just recently filed for bankruptcy, you may wonder if your credit will ever be the same again, or what you can do to rebuild your credit to its former glory. The solution to your predicament in either case is to apply for what is known as a second chance credit card, or unsecured credit card. These cards allow you to get a credit card without any money down and will help you build up your credit score as long as you pay the balance off in full and on time each month. These advantages to your credit rating and finances are not generally available with prepaid debit cards, banking debit cards, or secured credit cards, meaning cards where collateral is required to secure the line of credit. However, these second chance credit cards do have disadvantages. A couple of these disadvantages include an annual fee. Where regular credit cards … [Read more...]
Explanation of the Bankruptcy Process
A few months ago I prepared a document for each and every one of my client's to read which attempts to describe the Chapter 7 and Chapter 13 Bankruptcy process in Maryland from A to Z. I think I did a good job. But, I am always trying to look for something better so that my client's can have the best possible experience when filing Chapter 7 or Chapter 13 Bankruptcy in Maryland. I came across an article on a website called MarylandBankruptcy.com. Here it is, and I think it gives a very clear explanation of the bankruptcy process in Maryland: 2005 Bankruptcy Act Credit Counseling The 2005 Bankruptcy Act requires all individual debtors who file bankruptcy on or after October 17, 2005, to undergo credit counseling within six months before filing for bankruptcy relief and to complete a financial management instructional course after filing bankruptcy. 2005 Bankruptcy Act Means Test Under the 2005 Bankruptcy Act you income and expenses will be analyzed to determine if you … [Read more...]
Maryland Bankruptcy and Filing Taxes
This article was taken from an article by Jay Fleishman, a bankruptcy attorney in New York who writes interesting bankruptcy articles almost on a daily basis: BANKRUPTCY AND FILING TAXES Many people who need to file bankruptcy have other financial issues swirling around them as well, and taxes seem to loom the largest. Some have outstanding tax debts, whereas others simply haven’t filed tax returns in years. Depending on your mindset, this may or may not be a problem for you. Income Disclosures In Your Bankruptcy Papers As part of the Statement of Financial Affairs you’re going to need to account for your income over the past two years. That means you’re going to need to get your hands on that information, and tax returns are typically the fastest place to look. A lack of a completed return will surely make the task more difficult, but that’s easily fixable. Income Tax Returns In Chapter 13 Bankruptcy The problem in terms of filing bankruptcy, however, comes if you’re … [Read more...]
The Chapter 7 and Chapter 13 Bankruptcy Process
I want to give you all an idea of the bankruptcy process. I'll try to keep this simple and cover only the "normal" case and not cases involving objections from creditors and other complications. Once you've chosen an attorney, provided all the documentation requested and paid the required fees, it's time to file your case. If you are in a Chapter 7 case, then the procedure is the case gets filed with the Clerk's office in your jurisdiction. Upon the filing, an automatic stay goes into effect. This stay immediately stops your creditors from doing any collection proceedings, including court-ordered garnishments, license suspensions, phone calls, billings, etc... About 4-6 weeks after your case is filed, you will have to attend a "meeting of creditors" or "Section 341" meeting. This is a hearing that debtors are required to attend. Typically, if you've hired a full-service bankruptcy law firm such as ours, an attorney will be at your hearing with you. An interim trustee appointed by the US … [Read more...]
Bankruptcy Statistics
News Flash! November 8, 2010 —Bankruptcy cases filed in federal courts for fiscal year 2010, the 12-month period ending September 30, totaled 1,596,355, up 13.8 percent over total FY 2009 bankruptcy filings of 1,402,816, according to statistics released today by the Administrative Office of the U.S. Courts. While non-business bankruptcy filings continued to rise in FY 2010, business filings dropped slightly for the first time since 2006. The bankruptcies reported today are for October 1, 2009 through September 30, 2010. Business and Non-Business Filings Non-business filings totaled 1,538,033, up 14.4 percent from the 1,344,095 non-business bankruptcy filings in September 2009. This is the highest number of non-business filings for a fiscal year since FY 2005, immediately prior to the implementation of the Bankruptcy Abuse Prevention and Consumer Protection Act in October 2006. Business filings totaled 58,322, down 0.7 percent from the 58,721 business filings in the 12-month period … [Read more...]
Ten Bad Habits
I was searching the web today and I came across a very interesting and informative article which relates to bankruptcy. It was called Ten Bad Habits That Lead to Bankruptcy. Many consumers in Maryland with high credit card debt could have taken steps to prevent it. At the Maryland Bankruptcy Center we will not only file your personal Chapter 7 bankruptcy for you but we will also give you tips on how to stay out of financial trouble in the future. Call or e-mail us anytime for a free consultation. The ten bad habits are: 1) Misusing Balance Transfers - All of us have found offers for new credit cards that provide a "teaser" rate. "Transfer balances and pay no interest for a year" is a common sales pitch. While it can be a good idea to manage debt by taking advantage of these types of offers, you still have to be disciplined and concentrate on paying down the debt. The common mistake is that the person continues to use the card and creates new debt. 2) Not Checking Credit … [Read more...]
