Bankruptcy is a government ordered program to help people get a second chance financially.  It allows people to stop foreclosure, stop repossessions, stop wage garnishments and repay some, all or none of their credit card debt.

What can bankruptcy do for you?

-          Foreclosure- Bankruptcy can stop foreclosure up until the home is sold at auction.  That means up to the minute before the foreclosure sale!  Bankruptcy can give you the time to get back on your feet and then make your mortgage payments again.

-          Repossessions- Bankruptcy can stop repossession or your car and sometimes can get the car back after it was repossessed!  Bankruptcy can also allow you to rewrite the loan for better terms for you.

-          Wage garnishments- Bankruptcy stops ALL attempts to collect debts. No more lawsuits, no more garnishments, no more testimony in court.

-          Second Mortgages- Bankruptcy may eliminate, yes eliminate, second mortgages.

Type of bankruptcies.

Generally people file a Chapter 7 Bankruptcy or Chapter 13.  Businesses or people who do not qualify for Chapter 13 may have to file a Chapter 11 Bankruptcy.  For this discussion, we will limit to Chapters 7 and 13.  Please feel free to contact us for questions about Chapter 11.

Chapter 7 is a liquidation.  That means you exempt or “keep” certain assets and anything you have above that goes to pay creditors.  In reality most people do not have anything above the exemptions and in most Chapter 7 bankruptcies the creditors get nothing.  Of course, secured creditors, like mortgages and car loans, get paid the value of the property they secure.

Chapter 13 is a payment plan.  That means you will pay creditors a percentage of the debt over a 3 to 5 year period.  Chapter 13 also allows you to catch up on your mortgage or car loan.  It allows you to alter the terms of your car loan and possibly eliminate a second mortgage.  Most people that own homes will file a Chapter 13.

Do you go to Court?  Yes.  Kind of.  You go to a meeting of creditors which is usually just with a Trustee appointed by the Court.  In a Chapter 7 that is all you do.  In a Chapter 13 you will have to go to court for a confirmation hearing on the plan developed by us.  Again usually there is no courtroom testimony.

Bankruptcy may not be right for you.  We offer free consultation to determine if bankruptcy is right for you and if so, which Chapter makes sense for you.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.

Free initial consultation!
Resources courtesy of:

O'Herlihy Law
100 Ridgely Avenue
Annapolis, MD 21401
(443) 270-3198
FAX (410) 280-3931