Because of the current uncertainty, a lot of people have lost their jobs through no fault of their own and may be considering bankruptcy to get out from under debt. This is a list of the questions most commonly asked when considering bankruptcy.
What can I keep if I file for bankruptcy?
Although bankruptcy is mostly controlled by federal law; state law does come into play. Every state has what are called “exemptions.” Exempt property is the stuff you get to keep. Exempt property includes clothing, household furnishings, social security payments, etc. up to a certain dollar amount. For example, the homestead exemption protects homeowners who file bankruptcy and have equity in a property up to a certain amount. If you have equity in a car up to a certain amount, you can use the “wildcard” exemption to keep the car. A Baltimore bankruptcy attorney can provide further details on exemptions.
What about my car? I need it to get around.
In most instances you can keep the car. If you owe money on a secured debt, you have a choice of allowing the creditor to repossess the property, continuing to make the payments as normal or paying the creditor a lump sum so that you own the property outright. As explained above, you can choose to exempt the equity in the car, which allows you to keep the vehicle. Most people don’t have any equity in their car but they need it for getting to and from work or for looking for work and are still making payments, so another strategy that can be used is that the debtor decides to continue to make payments as usual by filling out a bankruptcy form that allows them to affirm the debt on the car whether it’s a Chapter 7 liquidation of debts or a Chapter 13 reorganization of debts. An Ocean City bankruptcy lawyer can go over your options and help you to decide the best strategy.
I’m falling behind on my mortgage payments. Can filing for bankruptcy help me?
Although foreclosures are difficult to stop once they are started, a bankruptcy filing might help. If you are facing foreclosure, a Baltimore or Ocean City bankruptcy attorney can use the Chapter 13 bankruptcy process to stop a foreclosure sale. In a Chapter 13 bankruptcy, the foreclosure, repossession, garnishment, seizure or legal action is “stayed,” which means it is placed on hold. The stay provided by the bankruptcy can save your home, stop interest from accumulating and provide emotional relief from creditor calls or the threaten of legal action.
If I declare bankruptcy, who deals with my creditors?
Once the paperwork is filed in court, creditors are not allowed to call you and must deal with your Baltimore or Ocean City bankruptcy attorney.
Are there alternatives to filing bankruptcy?
Yes. You can ask your creditors to accept lower payments or grant an extended payment schedule. However, some creditors are not known for working with debtors and have a reputation for practically forcing people into the bankruptcy process.
The Law Office of Thomas J. Maronick is open during the pandemic and will continue to meet your Ocean City and surrounding areas, Baltimore City and Baltimore county legal needs. A Baltimore bankruptcy attorney can help you to determine the best way to get out of debt and out from under creditor calls. An Ocean City bankruptcy attorney can devise a strategy for you that allows you to use the bankruptcy laws to your advantage. The consultation is free. We can meet with you remotely if you have access to Zoom. You can contact Thomas Maronick on his cellphone at 202.288.0167, the law office at 410.934.3007 or through the website for a free consultation.