Call 301-614-0535 to Schedule a Consultation
Recent Blog Posts
How bankruptcy could lead to a better childhood for your kids
Parents struggling with financial difficulties often feel overwhelmed by the pressure to pay bills while providing for their children. When debt piles up, it can affect every aspect of family life.
Bankruptcy, while a difficult decision, may offer a fresh start that could lead to a better future for both parents and children.
Reducing financial stress
When parents face unmanageable debt, financial stress can impact their well-being and ability to care for their children. Constant worry about bills and collection calls can create a tense home environment. Bankruptcy can provide relief by eliminating or restructuring debts, allowing parents to focus on what matters most.
Ensuring basic necessities
Uncontrolled debt can force families to make difficult choices between paying bills and covering basic necessities. Bankruptcy helps parents protect essential assets and prioritize the well-being of their children. By clearing debts, families may regain the ability to provide a stable home environment, ensuring that their children have what they need to thrive.
Understanding Maryland's Chapter 13 repayment plan
Filing for Chapter 13 bankruptcy allows you to manage your debts through a structured repayment plan. This process can provide relief if you want to reorganize your finances without liquidating assets. It can be helpful to know how this repayment plan operates.
Understanding the basics of the Chapter 13 repayment plan
When you file for Chapter 13 bankruptcy, you suggest a plan to repay all or at least a portion of your debts over three to five years. The duration of your plan depends on your average monthly income relative to the median income. You'll likely qualify for a three-year plan if your income is below the median. If it's above, a five-year plan is more typical.
Determining your payment amount
Your monthly payment under a Chapter 13 plan depends on several factors, including your disposable income, total debt, and necessary living expenses. To calculate your disposable income, subtract these expenses from your monthly income. The remaining amount represents what you can reasonably afford to pay toward your debts.
Are student loans forgiven after 10 years?
Student loans can be a significant financial burden for borrowers. Many people wonder about the possibility of forgiveness after 10 years. Specific programs and conditions determine if you are eligible for student loan forgiveness.
Public service loan forgiveness
There are federal student loan forgiveness programs that can provide relief for borrowers. The Public Service Loan Forgiveness (PSLF) program is a notable option. Under this program the remaining balance on your direct loans can be forgiven after making 120 monthly payments while working full-time for a qualifying employer.
If you meet the criteria, you will receive forgiveness after 10 years of consistent payments. You must meet all the requirements and submit the necessary documentation during the process.
Income-driven repayment plans
If your initial loan balance is less than $12,000, you might qualify for forgiveness under the SAVE plan. This plan adjusts your monthly payments based on your income. This makes it easier to manage payments if you are facing financial hardship. This is an alternative path to forgiveness over a longer period, typically 20 to 25 years.
Chapter 7 bankruptcy process after previously filing in Maryland
Filing for Chapter 7 bankruptcy in Maryland can be a stressful and confusing process. Knowing what to expect and understanding the rules can help make the process smoother. Chapter 7 bankruptcy helps individuals discharge their debts and get a fresh start. However, if you've previously filed for Chapter 7 bankruptcy, you might wonder if you can do it again and what the implications are.
Can you file for Chapter 7 bankruptcy again?
Yes, you can file for Chapter 7 bankruptcy again, but you must adhere to specific time limits. If the courts discharged your previous Chapter 7 bankruptcy, you need to wait eight years from the date of filing the previous case before you can file for Chapter 7 again. If they dismissed your previous bankruptcy case, you might be able to file again sooner, but this depends on the circumstances of the dismissal.
Will the court take a closer look at your finances?
When you file for Chapter 7 bankruptcy after a previous filing, the court will likely scrutinize your finances more closely. The court wants to ensure that you are not abusing the bankruptcy system. They will review your income, expenses, and financial history more thoroughly to make sure you genuinely need bankruptcy relief. You should provide detailed financial information to support your case.
How can bankruptcy impact tax liens and levies?
Filing for bankruptcy can be a complicated decision, especially when dealing with tax liens and levies in Maryland. It can be helpful to learn about the impact bankruptcy can have on these financial obligations.
The difference between tax liens and levies
A tax lien is the government's claim on your property for unpaid taxes, ensuring payment if you sell. A tax levy is the government seizing your property or assets to satisfy the tax debt.
How bankruptcy affects tax liens
When you file for bankruptcy, an automatic stay stops most collection activities, including tax liens. Bankruptcy does not eliminate tax liens. If the lien attaches to your property, the IRS still claims it. Chapter 13 bankruptcy allows you to repay your tax debt through a structured plan, potentially removing the lien once you pay the debt.
How bankruptcy affects tax levies
Filing for bankruptcy activates an automatic stay on tax levies, stopping the IRS from seizing your assets. In a Chapter 7 bankruptcy, you might discharge certain taxes if you meet specific criteria. In a Chapter 13 bankruptcy, you can include your tax debt in the repayment plan, which stops further levies.
Legal options for reducing tax penalties on overdue taxes
Dealing with overdue taxes can be stressful. However, there are legal ways to reduce or eliminate tax penalties and interest. Understanding these options can help you manage your tax debt more effectively.
Request a penalty waiver
One option is to request a penalty waiver. If you have a good reason for missing the tax deadline, you can ask the Maryland Comptroller's Office to waive the penalties. Valid reasons may include serious illness, natural disasters, or other unavoidable circumstances. Providing proper documentation to support your request increases your chances of approval.
Apply for an installment agreement
If you cannot pay your tax debt in full, consider applying for an installment agreement. This allows you to pay your taxes over time in smaller, more manageable amounts. While interest may still accrue, an installment agreement can prevent additional penalties from being added.
Mistakes to avoid while trying to rebuild your credit
Rebuilding your credit after filing for bankruptcy in Maryland is a crucial step toward financial stability. Avoiding certain common mistakes can help you enhance your credit score more effectively.
Accumulating new debt
One of the biggest mistakes to avoid is taking on new debt too quickly. After bankruptcy, focus on managing your finances without relying on additional credit. Acquiring new debt can hinder your progress and negatively impact your newly recovering credit score.
Ignoring credit report errors
Post-bankruptcy, it's essential to ensure that all discharged debts are correctly reported. So, regularly check your credit report for inaccuracies. Failure to address errors can keep your score lower than it should be.
Failing to create a budget
Not establishing a budget is a critical oversight. A well-planned budget helps manage finances effectively, ensuring that you live within your means and avoid the financial missteps that lead to bankruptcy.
Foreclosure vs. bankruptcy: How can you protect your home?
Facing financial difficulties can be overwhelming, especially when your home is at risk. If you find yourself struggling to keep up with mortgage payments among other financial responsibilities, it is essential to know your options. Understanding how bankruptcy can defend against foreclosure can help you make the best possible solution for your situation.
What is foreclosure?
Foreclosure is a legal process where the lender takes control of your home due to your missed mortgage payments. This process can be stressful and can result in you losing your home. In Maryland, foreclosure can take several months, giving you some time to explore other options.
What is bankruptcy?
Bankruptcy is a legal process that helps you manage or eliminate your debts. There are several types of bankruptcy, but the two most common for homeowners are Chapter 7 and Chapter 13. Chapter 7 can discharge a significant part of your debts, but you might have to liquidate your house and other assets. Chapter 13, on the other hand, allows you to keep your home by restructuring your mortgage debts and payment arrangement.
How long does a bankruptcy filing stay on your credit report?
When considering bankruptcy, one concern for many people is its long-term impact on their credit report. Bankruptcy is a legal process that can provide relief for those overwhelmed by debt. However, it also has consequences, including its effect on credit.
Understanding how long a bankruptcy filing stays on your credit report is necessary for planning financial recovery.
How long it stays on a credit report
A bankruptcy filing can remain on your credit report for up to ten years. This means that the bankruptcy record will be visible to lenders and creditors who check your credit history during that time. The type of bankruptcy filed also impacts how long it stays on your report. Chapter 7 bankruptcies, which involve liquidation of assets, typically stay on your credit report for ten years from the filing date. Chapter 13 bankruptcies, which involve a repayment plan, stay on your credit report for seven years from the filing date.
How it impacts a credit score
Having a bankruptcy on your credit report impacts your credit score. Despite the negative impact of bankruptcy on your credit report, it is possible to rebuild your credit over time. It may take several years to do so. During this time, obtaining new credit or loans may be challenging. If approved, you may face higher interest rates. However, it is still possible to improve your credit score over time by practicing responsible financial habits, such as making timely payments and keeping credit card balances low. It is also wise to check your report regularly for errors.
What are reasons a court may deny a Chapter 7 discharge?
Even if expensive medical bills or the aftermath of a divorce feel financially overwhelming, you can still find a way to relieve your mounting debt through bankruptcy. You may have decided Chapter 7 is right for you, but you still worry that you have no guarantee of a debt discharge.
It is true that Chapter 7 filers do not have as much of a right to a discharge as Chapter 13 filers. This is because creditors or even your bankruptcy trustee can object to a discharge in Chapter 7. However, specific situations require a judge to deny you a discharge. By knowing what a court expects from you, you may feel more confident about proceeding with your bankruptcy.
Failure to complete bankruptcy standards
Before receiving a discharge, you must complete a course on personal financial management. You must also submit all required tax documents to the court, and provide accurate and complete documentation. Also, if you cannot adequately explain a loss or deficiency of your assets, the court may deny your discharge.
Get Control of Your Life Back and Contact Us to Schedule a Consultation
Proudly Serving Greenbelt, MD and surrounding areas including Berwyn Heights, Hollywood, Lanham, Seabrook, New Carrollton, Wildercroft, College Park, Silver Spring, Rockville, Bowie, Burtonsville, Largo, Takoma Park, Upper Marlboro, Clinton, Hyattsville, Acredale, Beltsville, Snowden Pond, Ammendale, and White Oak Manor.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
