Maryland Bankruptcy and Credit Card Debt

The Basics of Credit Card Debt and Bankruptcy In an economy where housing problems dominate the headlines, high interest credit cards still remain one of the largest issues consumers face in their fight for financial health. It should come as no surprise to learn then, that credit card debt is still one of the primary reasons consumers are forced to file for bankruptcy. When a credit card account has been delinquent for more than 180 days, banks will charge off what is owed as “bad debt” and sell the account to a debt collector who will call, harass and even sue if the past due balances are high enough. Mounting pressure from debt collectors pushes many consumers through the front door of a bankruptcy office because chapter 7 protection is widely perceived as the fastest and best way to get out from under unmanageable credit card debt. While it is true that filing for bankruptcy can help discharge credit card bills, there are some basics that every consumer needs to know before … [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...]

Maryland Bankruptcy Laws Empower Citizens In Debt

If you are struggling with debt in Maryland, chances are you are feeling powerless. Collection agents are skilled at making you feel stressed and hopeless through embarrassing phone calls at work and home; threatening letters; and sometimes legal action. The collection companies want you to feel that your only choice to stop the harassment is to “pay up.” Fortunately, there is another option. We are Maryland Bankruptcy Lawyers, and we can help. The federal bankruptcy law can stop creditor harassment and put you back in control over your finances. The first way the Bankruptcy Code helps is by imposing an “automatic stay” against collection action against you. The automatic stay is an injunction issued by the United States Bankruptcy Court immediately upon filing your bankruptcy case. No hearing is necessary. This stay applies to creditors whether or not they have actual knowledge of your bankruptcy filing. The purpose of the automatic stay is to give the “debtor a breathing … [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 … [Read more...]

Holiday Season and Tax Refund Time

It is the first week of February and the phones at the Maryland Bankruptcy Center have been ringing off the hook.   I am a Maryland Bankruptcy lawyer.   I earn my living helping Maryland residents file Chapter 7 and Chapter 13 bankruptcy.   February is the busiest time of the year for bankruptcy filings.  Why?  Good question.  I have two theories, and here they are.  The first, and probably the best, is because January is the month that everyone receives their credit card bills from overspending during the h0liday season.  The large majority of bankruptcy's that I file are Chapter 7 bankruptcys.  Chapter 7 bankruptcy eliminates credit card debt, medical bills, judgement and other unsecured debts.  The large majority are credit cards.  The aveage United States resident carries approximately $12,000 of credit card debt at any given time, and most cannot afford it.    The other reason that so many people file bankruptcy in Maryland during February (and March and April too) is because … [Read more...]

Can a Second Mortgage Foreclose?

In most states, including Maryland the answer is yes a second mortgage can foreclose if in default.   The practical difficulty is that many junior mortgages are partially or wholly under water.  This makes foreclosure all but impossible.  In the case of a junior mortgage, there is always a senior mortgage with superior rights and first dibs on the money from the sale.  Moreover, there are often tax and condo fee creditors with rights that trump the junior mortgagee.  Consequently, unless there is clear equity above all outstanding liens and the expected costs of the foreclosure process, a junior mortgagee is extremely unlikely to press a foreclosure.  We often see people with second mortgages that are in severe default but with no attempts on the part of the junior mortgagee to foreclose.  One can’t take too much solace in this because the lien will stay with the property and will be a major problem if the property appreciates or if the homeowners ever want to sell or refinance the … [Read more...]

Thankfully, Bankruptcy Is Still Available

This economy stinks. According to an article I read in the Baltimore Sun, more Americans are living in poverty and without health care. The good news, Chapter 7 and Chapter 13 personal consumer bankruptcy is still available to all Marylanders. Call or e-mail us if you need a Maryland Bankruptcy attorney to help you choose the best path for you take if you are in a situation where you find yourself unable to pay your credit card bills, medical bills or if you cannot afford your mortgage and are facing foreclosure. Check out the article below: A new report from the U.S. Census Bureau shows that more Americans are living in poverty and more lack health insurance. The report, called "Income, Poverty and Health Insurance Coverage in the United States: 2009," found the median household income was $49,777, about the same as 2008. But it found that 43.6 million people were living in poverty, up from 13.2 million the year before, and the official poverty rate grew to 14.3 … [Read more...]

Chapter 7 Bankruptcy – The Process

Hi folks.  Most people who need to file Chapter 7 Bankruptcy in Maryland have heard of it, and no a little bit about it, but don't know how it works.   Well, here it is, the process, which is pretty much the same in every case. Once you decide that you want to file Chapter 7 Bankruptcy in Maryland, you should find an attorney that you are comfortable with.  Bankruptcy is not complicated and it is something that literally hundreds of Maryland Bankruptcy Lawyers are able to do for you, and all of them will achieve the same results.  However, the service that you receive, the personality of the bankruptcy attorney and the cost and payment plans are all things that you should look at.   Every lawyer should offer you a free consultation, if not, head in another direction.  Consult with lawyers until you find the right one.  Usually, you will be happy with the first attorney that you actually meet with, but if not, keep on trying, it will be well worth it. Now, the process: 1.  Meet … [Read more...]

Glossary of Bankruptcy Terms

Bankruptcy terms can be difficult to understand.  Below are brief definitions of the terms used in this site and in the Bankruptcy Code. If you have any questions, please feel free to contact us. 410-766-4044. Adequate protection:Payment to a secured creditor to protect the value of the creditor's lien during the bankruptcy proceeding from loss due to depreciation or non payment of a senior lien. Adversary proceeding: A lawsuit filed in the bankruptcy court which is related to the debtor's bankruptcy case. Examples are complaints to determine the dischargeability of a debt and complaints to determine the extent and validity of liens. Assets:Assets are every form of property that the debtor owns.  They include such intangible things as business goodwill; the right to sue someone; or stock options.  The debtor must disclose all of his assets in the bankruptcy schedules; exemptions remove the exempt assets from property of the estate. Automatic stay: The injunction issued … [Read more...]

Personal Bankruptcy

If you’ve recently found yourself buried under a pile of debt, you’ve probably spent some time researching ways to dig yourself out. Most likely, filing for personal bankruptcy did not sound like the most appealing choice. However, like visiting the dentist or and eating spinach, filing for bankruptcy can actually be quite good for your health, financially. Like most tools that aid in personal finance recovery, the more you learn about bankruptcy, the more comfortable you may feel wielding it as a debt-reducing tool. The following are some important things to know about personal bankruptcy: What Will the Neighbors Say? While many people think bankruptcy carries some stigma, the fact is that more than 1.5 million Americans filed for bankruptcy last year. And these people stretched across all social strata—from doctors and corporate executives to plumbers and house cleaners. In addition, according to  a recent Harvard University study revealed that most bankruptcy filers wound … [Read more...]