At Belsky, Weinberg & Horowitz, LLC we are committed to helping individuals and families reach the fresh start they deserve. We have the experience, dedication, and skill to help clients identify the right debt relief solution for them, and to guide them through each step of the process to financial freedom.
Request your FREE consultation online or give us a call at (410) 234-0100 to see how we can help you!
If your bills and credit obligations have reached a point where it has become impossible to make payments to creditors and have enough money left to live, you may want to consider bankruptcy as an option for resolving your credit problems. More and more people today are filing for personal bankruptcy.
Our bankruptcy lawyers in Baltimore can help you with matters such as:
The basic concept in bankruptcy is the elimination or reorganization of debts. The person filing the bankruptcy may declare voluntary bankruptcy to forestall creditors’ collection efforts, or a creditor may force a debtor into involuntary bankruptcy. Most individuals can choose between two types of bankruptcy proceedings.
Chapter 7, the more common route, is “straight” bankruptcy. The federal bankruptcy court appoints a “trustee” to gather the debtor’s assets and distribute them or their sale proceeds to creditors. Any debt that remains after the sale (“liquidation”) of a debtor’s assets are discharged. One may file under Chapter 7 only once every eight years.
Chapter 13 provides a “wage earner’s plan”, designed for employees, the self-employed, and other recipients of regular and stable income such as Social Security benefit recipients. Instead of liquidating the debtor’s assets and granting an immediate discharge of debt, the bankruptcy court forces the debtor to file a “plan of reorganization” that establishes a budget under which the debtor must live for a period of time (usually 3 to 5 years) and pay creditors a portion of his or her income. Afterward, unpaid debts generally are discharged. One may file a Chapter 13 bankruptcy as often as the court deems appropriate.
The fact that a bankruptcy has been filed may appear on one’s credit record for 10 years, and may, but not always, hurt the debtor’s chances of getting credit in the future.
Bankruptcy can help you find relief from:
Some obligations cannot be discharged in Chapter 7 or Chapter 13 bankruptcy, such as:
A common misperception by those contemplating bankruptcy is that they will lose everything they own if they file for bankruptcy. This is not necessarily the case, however. A debtor may keep some property after Chapter 7 bankruptcy. Maryland bankruptcy exemptions provide that a debtor may keep (or “exempt”):
Learn how you can protect your property and potentially avoid foreclosure: Call our Baltimore bankruptcy lawyers at (410) 234-0100 or email us for a FREE consultation!
Much legal strategy goes into pre-bankruptcy planning to maximize the debtor’s ability to retain assets after the bankruptcy is filed. There are many legal “loopholes” that a knowledgeable attorney can take advantage of. Following are some of the strategies we suggest for our clients.
Business affairs should be separated as much as possible from personal ones to insulate the family assets from a business failure. The most common way to do this is to incorporate the business. Also, one should avoid signing personal “guarantees” for a business loan.
Bankruptcy laws treat each spouse separately, so a bankruptcy spouse may be able to shelter some assets by transferring them to the other spouse. In many states, property owned jointly by both spouses is not considered in a bankruptcy case that is filed by only one spouse. Thus when one spouse is bankruptcy, it may be appropriate to retitle the property in the names of both spouses. Of course, it is a good idea to commit any transfer well before creditor problems arise so the transfer is less likely to be scrutinized by the bankruptcy court.
Transfers to other relatives or irrevocable trusts may also be effective. However, bankruptcy laws contain “fraudulent conveyance” provisions, which prohibit transfers intended to “delay, hinder, or defraud creditors”. Generally, assets transferred within 90 days before filing the bankruptcy petition can be pulled back into the bankruptcy case by the court. Under Maryland law, the lookback can actually be as long as three years.
Convert non-exempt assets into exempt assets, preferably more than 90 days before filing for bankruptcy. For example, contribute as much as possible into retirement accounts, and use extra cash to buy life insurance, household goods, or tools of your trade.
The entire bankruptcy process, including pre-bankruptcy asset protection, is complex and riddled with expensive pitfalls that make it necessary to hire an attorney who is experienced in financial planning and bankruptcy. If handled properly, a bankruptcy may allow the debtor to leave his or her credit problems behind, thus creating a fresh start for future financial well-being. We encourage you to read the remainder of the articles included in this website, browse our frequently asked questions and glossary, and contact Belsky, Weinberg & Horowitz, LLC to learn more about your debt relief options.
Call (410) 234-0100 or request your FREE consultation online today!