Schifanelli Law, LLP
Contact US (410) 263-0028
Contact Schifanelli Law, LLP at 410-263-0028 for an initial consultation with a Lawyer in Annapolis.
2450 Riva Road, Suite 201, Annapolis, Maryland 21401.
Serving the Maryland and Washington D.C. Communities.
Being saddled with excessive debt is definitely rough: constantly thinking about how you are going to pay multiple creditors, like credit card companies and banks for personal or secured loans, while at the same time paying for the bills and services to keep you and your family fed and in your house, including keeping up with the utilities. It's even worse if you have a court judgment against you and the judgment creditor is siphoning off your wages. As the interest and late payment fees add up, it's natural to feel overwhelmed - at the least. And it's nothing to feel ashamed about either - credit card companies and other lenders in the recent past have been more than willing to extend credit to anyone with a heartbeat, and often with extra high interest rates to help cover their risk. With recent national economic stressors, getting in over one's head is not uncommon.
Fortunately, federal and state laws provide for bankruptcy protection for honest consumers who have overextended themselves financially and need a 'fresh start.' A discharge in Chapter 7 Bankruptcy proceedings may result in the elimination of most, if not all, of a person's debt that they had at the time of filing the petition. This includes "unsecured debts" (such as credit cards, personal loans, and many civil court judgments). It also may include "secured" debts - financing that you received that was secured by the underlying property as "collateral." For example, your car or truck loan, the mortgage on your home, or even computer or audio equipment.
But Chapter 7 bankruptcy relief may also come with a price: property that you own outright - if not exempt - may be subject to sale by a bankruptcy Trustee, with the proceeds going to help compensate your unsecured creditors for their losses. (See our page on exemptions here). Also, the lender with a security interest may repossess the underlying property. That is, your car loan lender may lawfully take your car, truck, or other secured property for which they extended financing; or your mortgage company or bank may foreclose on your home or other real property upon which it is the lien holder.
At times, a consumer filing for Chapter 7 bankruptcy protection in Maryland may want to keep certain debt and not have it discharged in bankruptcy. This often involves one's home and/or their automobile. There may be certain and strong emotional ties to a home, and like many working Americans you may rely on that automobile to get you to and from work (granted, you might have a strong emotional attachment to it also); the collateral may be worth much more than what you owe on it.
Keeping certain property through the bankruptcy proceeding starts with "reaffirming" the debt with the lender/creditor. By reaffirming, you acknowledge that you will still owe any amount due per the terms of the original loan or note, and the agreement between you and the lender remains intact. However, this also means that your debt survives bankruptcy - it's not discharged by the bankruptcy court. So, you will still be responsible for paying off the loan even if something happens to the property. In other words, you won't be "debt free" after the bankruptcy discharge, and will still have this debt on your plate. On the other hand, reaffirmation in bankruptcy proceedings is an opportunity to possible negotiate down the terms of the original loan agreement.