marc Schifanelli, Esq.
Contact US (240) 882-2402
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.
You know it: credit card companies are more than happy to provide plastic to anybody with half-decent or even no credit (including lawful immigrants new in the country). Often, the more cards you are issued, the more willing other companies are to have you get one of their cards. The catch is that most cards come with very high interest rates. Monthly interest fees increase with new charges. With many consumers these days using credit cards just to pay for bare living expenses, it's not too hard to imagine why many people get in above their heads with debt. Coupled with the other expenses of living: those medical bills that weren't covered, commuting costs, caring for kids, etc., at some point excessive debt becomes unmanageable. Fortunately, bankruptcy protection is available to persons saddled with excessive debt that they are unable to pay off. That is, to give them a "fresh start." Our Annapolis bankruptcy lawyers can provide you with the advice you need to determine what bankruptcy relief you may have.
"Chapter 7" bankruptcy is available to individual debtors. Under Chapter 7, a debtor has no liability for the debts that are discharged. This helps fulfill one of the primary purposes of bankruptcy: to give an honest debtor a "fresh start."
Keep in mind that not all debts are dischargeable. Also, a discharge in Chapter 7 does not extinguish a lien on "secured property," like the mortgage on your home or the lien on your automobile. Secured creditors may retain some rights to seize this type of property that "secures" an underlying debt even after a Chapter 7 discharge is granted.
However, if you wish to keep certain secured property (like your car or home), may be able to "reaffirm" the debt owed on it. A reaffirmation is an agreement between your and the creditor that your will remain liable and will pay all or a portion of the money owed, even though the debt would otherwise be discharged in the bankruptcy. In return, the creditor promises that it will not repossess or take back the automobile or other property so long as you continue to pay the amount owed on it.
On the other hand, if you do file for Chapter 7 relief, a federal "Trustee" will be appointed to essentially audit your "estate" - i.e. the total value of the property that you own or in which you have an interest. The Trustee's power includes the ability to sell any of your property (real estate, electronics, autos, firearms, jewelry, etc.) that is non-exempt. With the proceeds he pays your creditors to the extent possible.
You will be able to keep your "exempt" property. What kind of property is exempt, and maximum value of the property that you can claim as exempt, is determined by Federal and State laws. If exempted, the Trustee will not have authority to liquidate it and you will be able to keep it.
Whether you are contemplating Chapter 7 or Chapter 13 Bankruptcy relief, you should first speak with an experienced Annapolis bankruptcy attorney that can approach your situation comprehensively.
Individuals who still have regular income may not be able to take advantage of Chapter 7 bankruptcy relief if they are earning more than the allowed income. However, they may still be struggling with excessive debt.
Bankruptcy relief under Chapter 13, also known as a "wage earner's plan," enables individuals with regular income to develop a plan to repay all or part of their debts. Under this chapter, you propose a repayment plan to make installments to your creditors over three to five years.
An advantage of Chapter 13 bankruptcy is that it provides individual debtors with an opportunity to save their homes from foreclosure by allowing them to "catch up" past due payments through a payment plan, and personal or other property will not be sold off and liquidated by the U.S. Trustee as in Chapter 7 proceedings. So you don't need to part with the property that you decided to keep.
Instead, not unlike a consolidation loan, the individual makes installment payments but to the Trustee who in turn distributes the money to creditors. You don't have any direct contact with the creditors after approval of the three or five year plan.