Sanchez Garrison & Associates, LLP has been providing much-needed bankruptcy support and understanding to clients all over the city of Baltimore. No matter what financial trouble you may be facing, it would be our pleasure to help you understand your bankruptcy options and represent you if you decide you need our assistance. Our personal bankruptcy attorneys are equipped to explain the different types of bankruptcies and their benefits. If you need an experienced bankruptcy lawyer or just a little advice, call Sanchez Garrison & Associates, LLP.
Thousands of people file for bankruptcy in Baltimore every year and is a viable option for more people and families than one might expect. The two most common types of bankruptcies filed are Chapter 7 Bankruptcy and Chapter 13 Bankruptcy.
Chapter 7 bankruptcies allow you to eliminate all unsecured debt, meaning it is not attached to a specific asset. Most people who file for Chapter 7 bankruptcy can eliminate credit card debt, utility bills, personal loans, and medical expenses. It can mean a fresh start for you and give you the financial freedom to get your life back. To learn if Chapter 7 is the right choice for you, get in touch with a qualified bankruptcy lawyer here.
Bankruptcy is often thought of as something to be embarrassed about or that makes you a failure. This is absolutely untrue and can be harmful in the way that these beliefs may stop people who very much need help and can greatly benefit from the help that a bankruptcy lawyer can provide. Both individuals and business can file for chapter 7 bankruptcy if it is the correct option. Some of the requirements for filing personal bankruptcy are as follows:
Your monthly income is below the median income in your resident state
Once you recruit the help of a bankruptcy lawyer, what then? Chapter 7 bankruptcy is known as the “liquidations bankruptcy.” What this means is that if you successfully file, then all of your unsecured/non-exempt debts are completely wiped out. What this boils down to in Layman’s terms is that your bankruptcy lawyer will help you avoid foreclosures and car repossession, while helping you keep other things necessary for day-to-day life. However, you are required to sell all of your non-exempt property/items and use the proceeds to pay back as much as you can to your debtors and creditors.
This is why chapter 7 bankruptcy is known as liquidation bankruptcy. It allows you to keep the essentials you need for day-to-day life, and sell all other non-exempt possessions to pay back the creditors and debtors. Your debts like credit card balances, medical expenses, and other debts can all be eliminated. Chapter 7, with the help of your bankruptcy lawyer, can offer you a fresh financial start for life. If you are in Baltimore and are considering declaring bankruptcy, contact one of our local Maryland bankruptcy lawyers at Sanchez Garrison & Associates, LLP here.
To reiterate, you will get to keep only the essentials you need for daily life. Anything deemed non-essential you will be required to sell (liquidate) and give the entire amount to your debtors and creditors. So bankruptcy is by no means a “get out of jail free” card;there are very real consequences. Other notable things about chapter 7 bankruptcy are even if you do successfully file and get most of your debts erased, there are a few debts that will almost always remain. The debts that often still apply are expenses like taxes, alimony, child support, and student loans.
Additionally, filing bankruptcy will make your credit score drop by a substantial amount, usually somewhere along the lines of 100 to 200 points. Your credit report will show that you went bankrupt for the next 10 years, which will make it harder to take out loans and raise the interest rates you receive. And with chapter 7 bankruptcy, there is no protection at all for you co-signers. Double check if you are going to file for chapter 7 that you are not going to unknowingly harm any co-signers you’ve had in the past.
Many who are not eligible for Chapter 7 bankruptcy may still have Chapter 13 as an option. Chapter 13 allows you to create a payment plan for the next few years that allows you to pay off your debt at a pace that works for you. During this time, creditors cannot take action to collect any debt against you.
Reach out to schedule your no-obligation case evaluation. We help those in need of assistance work toward a better solution.
We recommend calling a bankruptcy lawyer like Sanchez Garrison & Associates, LLP in Baltimore if you are considering filing bankruptcy. Professionals often give free assessments or initial advice that can get you more definitive answers to your exact situations. That being said, here are some common requirements to file for chapter 13 bankruptcy:
Some people, even though they qualify for chapter 7 bankruptcy, still choose to file for chapter 13. The reason for this is because, under chapter 13 bankruptcy, there are more protections and perks. Chapter 13 is considered “reorganizational bankruptcy” because of the way it is structured. With this type of bankruptcy, instead of having a majority of your debt washed away with heavy consequences, you agree to pay back your debts in reasonable payments over three to five years. Chapter 13 bankruptcy is helpful for people who have a steady income but are constantly being harassed by creditors and debtors trying to collect. Chapter 13 gives people a chance to breathe, regroup, and work with a bankruptcy lawyer or court to create a payment plan that works for both the collectors and the person in debt. With this kind of debt, once the filing is complete, you work closely with a court-appointed trustee who will collect and distribute your payments to various creditors. During the repayment process, no financial collecting action can be taken against you or any co-signers you have.
Similar to chapter 7 bankruptcy, if you successfully file for chapter 13 bankruptcy, it will remain on your credit report for up to seven years. This can make it very difficult to apply for any sort of loan or credit since, more times than not, you are not allowed to apply for any new credit at all. Even if you do manage to secure a loan, the interest rate will likely be high for the duration of the seven years that it remains on your credit report. Also with chapter 13, you can expect a drop in your credit score as well. Though there are many factors going into exactly how much, like your current score, you can likely expect a drop anywhere from 25 to 125 points. As mentioned above, you will also need to pay back your agreed-upon debts over the three to five year period. Should you fail to make your payments, you will likely have to go back into court for further review of the situation and you may potentially be forced to sell off some of your assets to pay the debts.
Chapter 13 bankruptcy arguably has less severe consequences than chapter 7. However, it clearly has very real and serious consequences of its own. Don’t take this decision lightly, and consult a bankruptcy lawyer like Sanchez Garrison & Associates, LLP in Baltimore for expert and experienced help.
Sanchez Garrison & Associates, LLP always recommends hiring a bankruptcy lawyer to help walk you through the process. There are free legal services that can help you find a bankruptcy attorney if you can not afford one, and in some cases, you can represent yourself. If you choose to represent yourself, there are non-attorney resources available to help with the paperwork, though they have very heavy restrictions on what they can and can not help you with. Almost always, the best course of action is to hire a good bankruptcy lawyer.
After you’ve decided on your representation, there are a number of bankruptcy forms you will need to fill out that list all of your debt, property, expenses, and income for the court to review. You can download the forms here. Make sure you fill out the forms as accurately and inclusively as possible, otherwise you may be responsible for any debt you have not listed.
Once you have completed the forms, you need to start officially filing for bankruptcy by submitting your completed forms. If you have hired a bankruptcy lawyer, they will likely do this part for you.
After you have filed, the process varies depending on which form of bankruptcy you have filed for. The courts or your bankruptcy attorney will provide you guidance as to how to proceed after filing.