There is Hope

Facing uncertain financial times is very stressful. Regardless of the reasons for your financial difficulty, and no matter how hard you try to prevent it, you may feel as though there is no way out. It is important for you to know that there is hope and you do have options. Contacting an experienced bankruptcy attorney is a wise move. I have the experience and knowledge to get you started on your financial recovery.

How a Bankruptcy Attorney Can Help You

Claiming bankruptcy may be one option of getting the financial relief you need. Bankruptcy is a legal avenue used for eliminating or consolidating your debt and getting a fresh start financially. There are two types of bankruptcy you can choose from: Chapter 7 and Chapter 13. The option that is right for you will ultimately depend on what you are trying to accomplish. Your current financial situation will also dictate your best option.

Claiming bankruptcy in Maryland can stop creditor harassment, increase judgment satisfaction, protect against foreclosures, wipe out credit card debt, discharge debt due to divorce, eliminate medical bill debt, consolidate alimony and or spousal-support arrears, consolidate child support arrears, allow you to rebuild your credit, preventing wage attachment, and provide IRS tax debt relief.

Renters Facing Eviction

Moving Out photo by John Benson

There are many reasons an individual might file for Bankruptcy. One excellent reason is to avoid being evicted. In this case, a debtor may be served with a complaint for rent from his/her landlord. If the debtor responds by immediately filing for Bankruptcy, he/she can effectively pause the eviction order from his/her creditors with an automatic stay.

Under section 362 of the United States Bankruptcy Code, the stay begins at the moment the bankruptcy petition is filed. This makes it illegal for a landlord who has filed a complaint to proceed with the eviction (unless the Court makes an exception). This stay will only stall the eviction by a month or two, but that extra time can be critical for a debtor and his/her family.

On the other hand, if a landlord obtains a judgment of possession before a debtor files for Bankruptcy, the automatic stay is not nearly as effective. But even in that situation, Title 11 U.S.C. 362(l)(1)(B) still ensures that a debtor can delay an eviction for up to 30 days by paying the court whatever rent is due for that 30-day period. If the debtor is also able to cure the entire rent arrears during that 30-day period, the eviction can be stopped entirely.

If, however, the debtor cannot cure his/her arrears in that time frame, the automatic stay expires, and the landlord can proceed with the eviction. So, it is clearly in a debtor's best interest to file for Bankruptcy before his/her landlord has time to obtain that judgment of possession. This will help ensure an automatic stay on the eviction and give the debtor time to respond prudently.

Homeowners Considering Bankruptcy

House and coins

If you are homeowner contemplating filing a Chapter 7 Bankruptcy in Maryland, you should be aware that the Homestead Exemption is not very generous. Maryland allows an exemption on the first $23,675 of your equity. Any amount of equity over that is considered to be an asset. For example, if you had a house with $100,000 of equity, the first $23,675 of this equity would be secure from your creditors. That leaves $76,325 of equity that can be seized to pay off your debt. In this scenario, a Bankruptcy Trustee would have the right to seize your house and attempt to sell it.

If, however, you own the house with your spouse as Tenants by the Entirety and your spouse is neither filing Bankruptcy nor sharing any unsecured debt with you, then your house will be totally exempt regardless of your equity.

If you do share unsecured debt with your spouse, the Bankruptcy Trustee can demand that you pay it to the Bankruptcy Estate. Failure to do so could mean that you will lose your house. Therefore, it is very important to get an accurate valuation of your house to determine if you have any equity in it. This will help you make an informed decision about whether or not you should file a Chapter 7 Bankruptcy.

The Truth, The Whole Truth,
& Nothing but the Truth

House and coins

The old adage, "honesty is the best policy" really applies to Bankruptcy. This is especially true during what's known as the 341 Meeting of Creditors, a required court appearance during which you must present all financial documents relevant to your Bankruptcy claim, such as tax returns, paystubs, etc. At the 341 Meeting, these documents must be given to the Bankruptcy Trustee who will then verify the accuracy of the documents. In fact, the debtor is expected to answer all questions during this proceeding while Under Oath.

If it is later determined that you hid any assets or information, you could have your Bankruptcy dismissed, or worse. For example, if a homeowner sold his/her house within one year of filing for Bankruptcy, he/she is expected to disclose that sale, as well as any profit from it, on the Bankruptcy Petition. At this stage, mistakes and omissions can be easily corrected. At a 341 Meeting, however, misinforming the Bankruptcy Trustee can be catastrophic.

Let's say, for example, that a debtor named Fred made $20,000.00 from the sale of his house. At the 341 Meeting, Fred mentions that he sold the house, but he claims he made no money from the sale. The Trustee will then investigate Fred's claim to make sure it's accurate.

Now, let's say the Trustee finds out the truth—that Fred did, in fact, make $20,000.00 from the sale of his home. The Trustee will then require an explanation of what happened to that $20,000. If Fred has an explanation, but no receipts or anything else to prove his explanation is true, the Trustee will automatically move to deny Fred the Bankruptcy, citing that he concealed property with the intent to defraud the Court.

Remember, at the 341 Meeting, you are under oath. If the court grants the Trustee's motion to deny the Bankruptcy, Fred will never be able to discharge his debts, and he will never be able to file for Bankruptcy in the future, either. When it comes to filing for Bankruptcy, make sure you are doing your very best to be accurate at all times. There is no fooling the Bankruptcy Trustee, and as we've seen, the repercussions of fraud are dire.

Getting a fresh start financially

If you are interested in enjoying the benefits of starting over financially, call 301-589-4597 or email me at today to discuss your options. I offer free consultations to those enduring severe financial strain in Maryland and Washington D.C., including areas around Baltimore, Bethesda, Silver Spring, Gaithersburg, Rockville, Wheaton, Upper Marlboro, Bowie, College Park, Laurel, Frederick, Hagerstown, Hyattsville, Salisbury, Towson and Glen Burnie.