As a Maryland bankruptcy lawyer, I have many clients that know very little about the bankruptcy process when they come in for a consultation. It is important that anyone considering filing for bankruptcy to have a basic understanding of the process before they make the decision to file. Everyone has a right to know what their options are and how these options can affect their future, especially when dealing with a bankruptcy. Types Of Bankruptcy There are two types of bankruptcy and each carry different qualification standards. Filing for Chapter 7 bankruptcy produces a debt elimination at very little out of pocket cost to the debtor. However, a debtor must have a reportable income less than the median income level of their state of residence in order to qualify. This rule prevents abuse of the system by weeding out anyone who may be able to afford to repay their debts rather than have them eliminated. Filing for Chapter 13 bankruptcy allows a debtor to develop a repayment plan … [Read more...]
Tax Refund and Chapter 7 Bankruptcy
As 2011 draws to an end, many people will be thinking about filing Chapter 7 bankruptcy in Maryland in 2012. One very common question, almost always asked at the beginning of the year, is: IF I FILE CHAPTER 7 BANKRUPTCY IN MARYLAND, WILL I STLIL BE ABLE TO KEEP MY TAX REFUND? The answer is.............yes, in just about every case, you will be able to keep your tax refund. When you file Chapter 7 bankruptcy in Maryland, you are permitted to keep roughly $12,000 worth of "liquid" assets. That does not include your house. That includes, for most people personal belongings such as household goods and furnishings, automobiles that are fully paid off, money in savings and checking accounts, and certain other assets. One asset that people often forget is there tax refund. A tax refund, or an expected tax refund, is nothing more than money in a savings account held by the government that will be given to you after you file your taxes and show that you have overpaid your taxes, … [Read more...]
Utility Bills and Bankruptcy
Two Rules for Utilities and Bankruptcy When people are current with their utility bills, utilities rarely become an issue in bankruptcy. That is because Section 11 U.S.C. § 366(a), prohibits utility companies from discriminating against people based solely on bankruptcy filing. However, often being current is not the case and people seek to discharge their back utilities debts through bankruptcy. You can do that, but keep in mind there are two issues to consider. First, pursuant to 11 U.S.C. § 366(c)(4), a utility company has a right of set-off against your deposit. Meaning, the utility company can keep your deposit and apply it to your pre-petition debt. Second, pursuant to 11 U.S.C. § 366(b), the utility company may shut off your service on the 21st day following the filing of your bankruptcy petition if you are discharging a debt to the utility company and have not paid a post-petition deposit. In other words, if you file a bankruptcy and plan on discharging a debt … [Read more...]
Have a Debt Free 2012!
Happy Thanksgiving to all. If you are visiting our website during this time of the year, and you are thinking about filing for bankruptcy, you have taken the first step in the right direction to make you 2012 your best year ever. Too many Marylanders have so much credit card debt and other other debt that they literally cannot go entire day without thinking about their financial woes. Many, many years ago, our founding fathers realized that life, liberty and the pursuit of happiness INCLUDES the ability to seek debt relief and a fresh start in difficult times. That is why the right to file bankruptcy was inluded in the first draft of our United States Constitution. It is your right, and if you don't use it, you are giving up one of the greatest benefits of living in this country. Chapter 7 bankruptcy in Maryland allows you to eliminate credit card debt, medical bills, judgments, garnishments, repossessions and all other unsecured debts except student loans and most debts to … [Read more...]
Ten Things To Do BEFORE FILING BANKRUPTCY
Bankruptcy is very often a time-sensitive process and pre-bankruptcy planning can be critical in protecting assets. Chapter 7, in particular, the trustee’s responsibility is to “look back” at the actions the debtor has taken to insure that there hasn’t been a fraudulent conveyance of assets, a non-allowed preference payment to creditors or other actions that might leave assets exposed. It’s critical, if you are considering bankruptcy, to consider taking the following steps to insure a successful filing: 1. Consult with an attorney. The bankruptcy laws have become so complex that consumers should not attempt to file by themselves. It’s a very risky process to try to do on your own. Since 2005, there is a complicated “Means Test” required, government-approved credit counseling, as well as other changes which made the filing of Bankruptcy much more complicated. Even if you eventually file pro-se (representing yourself) consult an attorney and ask questions about whether … [Read more...]
Chapter 7 Maryland Bankruptcy or Chapter 13 Maryland Bankruptcy?
Bankruptcy may provide some relief to a borrower under financial stress and overwhelmed with debt. Typically, there are two types of bankruptcy available to a debtor, Chapter 7 bankruptcy and Chapter 13 bankruptcy. The requirements and benefits offered by the two types of bankruptcy differ greatly. A Maryland bankruptcy attorneycan explain the differences between the two chapters in detail and help ensure a successful bankruptcy filing. It is highly recommended that a debtor consult a bankruptcy lawyer for help determining which bankruptcy chapter is best suited for their situation. An incorrect or incomplete bankruptcy petition can create long-lasting consequences for the debtor. Chapter 13 is considered a restructuring bankruptcy because the debtor continues to make payments to their creditors according to a court approved payment plan. The payment plan outlines how the income the borrower receives will be used to pay off the debts owed. Once the payment plan is confirmed by the court … [Read more...]
Third Most Chapter 7’s In Maryland Filed!
Usually I write about or I find important or interesting issues on Bankruptcy and post them on this blog for anyone who happens to drop by the website to see. Today, however, my post is a little different. Today it's about my bankruptcy firm, and yes, I am going to do a little bragging. I have been practicing bankruptcy law in Maryland for almost 20 years. In 2005, however, when the laws changed, I stopped doing it for a while. My thought was that everyone and their mother (sometimes literally) had just filed Chapter 7 bankruptcy in Maryland during that prior year and the amount of people in Maryland to help with bankruptcy's would be very few in the next few years. So I changed my practice and concentrated more on Family Law. But in 2009, shortly after the recession hit full swing, I realized that, with so many people out of work and out on disability and without health insurance, the need for Chapter 7 and Chapter 13 bankruptcy's in Maryland would soon rise again. So, … [Read more...]
Filing Bankruptcy to Prevent Foreclosure
If you’re facing foreclosure, and you can’t seem to strike a deal with your lender, filing bankruptcy may be able to help. If you fall behind on your mortgage payments, your lender may take steps to foreclose on the property – meaning it may take back your home and sell the property at a public auction. The foreclosure process doesn’t happen overnight. In Colorado, a foreclosure typically starts after you fall behind on your payments for at least two months, and often three or four. This window of opportunity (commonly the reason behind a “strategic default”) will provide some time for you try alternate methods, such as loan forbearance, a short sale, or a deed in lieu of foreclosure. If you’ve already tried these options, filing bankruptcy may provide another option to avoid or stall foreclosure. Here are some examples of how filing for bankruptcy can help you – The Automatic Stay Delays Foreclosure When you file either a Chapter 13 or Chapter 7 bankruptcy, the … [Read more...]
How Long Does a Chapter 7 Maryland Bankruptcy Case Take?
Typically, chapter 7 bankruptcy cases last between three and four months from the date the case is filed. The preparation for a chapter 7 bankruptcy case can be anywhere between one day and many months depending on a number of factors, including attorneys fees, document readiness etc. This post will deal with the chapter 7 bankruptcy timeline after filing a case. For questions about what it takes to prepare a chapter 7 bankruptcy case, consult a bankruptcy attorney. Rough Chapter 7 Bankruptcy Case Timeline: Day 1: Case Filed Chapter 7 bankruptcy cases are filed electronically by a bankruptcy attorney, however, before this occurs, you will need to visit with your attorney to sign your petition and schedules after a thorough review. Soon after filing, your case will be assigned to a trustee and you will learn the date of your meeting of creditors (also called the “341 meeting”). Day 30-40: Meeting of Creditors Approximately thirty to forty days after the case has been filed, … [Read more...]
Why Filing Bankruptcy is Better Than Debt Credit Counseling
I saw this article today and had to pass it along. It is very true and I couldn't have said it better myself. Is Credit Counseling a Step in the Right Direction? Credit counseling most often involves consolidating outstanding debts as much as possible and then developing a negotiated repayment plan for a reduced payment over time to all of your creditors. Credit counseling is often a first step taken by those who have significant debt due to varying unforeseen circumstances. Each Creditor Will Have Different Requirements Each creditor has a different idea of what should be in the repayment plan and therefore will have different requirements. The catch is that a repayment plan must be approved by all the creditors, which takes time. What you may not know is that credit counselor staff is often working for the major credit card companies, in their best interests not yours. This is because the credit consolidation agencies get a cut of all the funds they recover that are owned to the … [Read more...]
