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Is Filing Bankruptcy Right for Me?

This can be a very difficult situation to perform is filing bankruptcy. Especially if you are requesting help from friends or family that does not resolve the problem financially. Many people see filing bankruptcy as a bad situation that can affect your entire life.

However, many people who had file bankruptcy believed to be the best financial decision that they ever made. The purpose of the bankruptcy law is to provide you a fresh start or start with a clean slate. This is like a second chance to show for your financial well-being. Bankruptcy is not to single out people and characterize them as evil, but in fact to provide you with a second chance to have another bite of an apple in life where there was no other way out of the financial mess.

There are several reasons as to why people file bankruptcy. Many times, it can be for retirement, job loss, and/or medical debts are the most regarded reasons. The two most popular reasons can be health complications can lead to lost of employment or lost of employment can lead to health problems. However, it comes about in these two ways and the only way out of your financial mess is through bankruptcy.

Furthermore, there are additional reasons to file for bankruptcy such as:

  1. You are not current on your mortgage and are in foreclosure procedure. The option here is a Chapter 13 bankruptcy which would halt the foreclosure procedure and have you pay back the arrears from 3 to 5 years.
  2. You have a judgment against you and there is a bank account attachment or wage garnishment.

What are signs that you should file a bankruptcy as follows:

  1. You use one credit card to pay off the other credit card.
  2. You are thinking about withdrawing from your retirement to pay off debts.

There are two types of consumer bankruptcy out there which are Chapter 13 bankruptcy and Chapter 7 bankruptcy.

The way Chapter 7 is set up for debtors who cannot afford to make anymore payments to their bills. Even if you own a car and house, you can file for a Chapter 7 bankruptcy. To be eligible under a Chapter 7, your income must be less than the median income for your family in Maryland. The numbers can change frequently, so you can contact our office about it.

The second option is a Chapter 13 bankruptcy. There are two reasons to do a Chapter 13 is to stop foreclosures and to settle a payment plan to pay back the arrears. The second reason is that you earn above the means test income for Chapter 7 or that you have plenty equity from your real property or personal property. You will not lose any of your property in Chapter 13, but you would have to pay some of your debts. The payment will be a function of your income and property equity.

However, some debts are non-dischargeable such as student loan debts, child support, alimony, certain recent income taxes, most debts from government agencies, debts from personal injuries caused by drunk driving, and court fines and penalties, including EZ Pass fines. The exception for student loan debts is showing an extreme financial hardship which is very difficult to prove. You have to prove no income and property to pay off your student loans.

If the taxes are owed more than 3 years before you file and you filed your taxes for those particular years more than two years before filing, then the State and Federal Income tax debts are dischargeable.

You should call our office if you considering filing bankruptcy to see if it is your best option. The firm’s phone number is 301-219-5038 or e-mail us at contact@soubralaw.com. The phone consultation usually takes about 10 minutes. You can speak to us to discuss the pros and cons about filing bankruptcy. The Soubra Law Firm is here to help with your legal needs.

As your Frederick Bankruptcy Chapter 7 and Chapter 13 Attorney to deal with bankruptcy issues, the Law Firm is here to serve Frederick, Montgomery, Washington, and Carroll Counties as well as the remaining Maryland area. The Firm would like to be your Bankruptcy Chapter 7 and Chapter 13 Lawyer to deal with bankruptcy issues.

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