The Law Office of Donald L. BellThe Law Office of Donald L. Bell2024-03-12T19:58:01Zhttps://www.donaldbellaw.com/feed/atom/WordPress/wp-content/uploads/sites/1203336/2022/11/cropped-DLB-site-icon-32x32.jpgOn Behalf of The Law Office of Donald L. Bellhttps://www.donaldbellaw.com/?p=492132024-03-12T19:58:01Z2024-03-12T19:58:01ZRetain control of the business
One of the primary benefits of Chapter 13 for business owners is the ability to retain control of your business operations. Other bankruptcy options may require selling off business assets to repay debts. Chapter 13 relies on a manageable repayment plan to repay debts. This enables you to continue running your business.
Prevent repossession
When you file, the court puts an automatic stay in place. This stops all creditor actions, including the repossession of business assets. The stay provides valuable breathing room to reorganize your finances and protect your business assets.
Prioritize debts
The repayment plan allows you to prioritize certain debts, such as past-due payments on business loans. This can help reduce the total amount you need to repay or give you more time to pay. The flexibility can be significant when you need to stabilize your finances, giving you much-needed breathing room.
Chapter 13 bankruptcy offers business owners a structured path to manage debt. It is a helping hand that can take you from the brink of losing everything to getting back on your feet to create a bright future for your company.]]>On Behalf of The Law Office of Donald L. Bellhttps://www.donaldbellaw.com/?p=492122024-02-22T19:31:23Z2024-02-23T19:31:16ZAdult children
Seniors may find themselves financially supporting their adult children, whether through financial assistance with bills, loans or housing expenses. While this support often comes from a place of love and a desire to help, it can strain the senior's financial resources. This is especially true if the children face ongoing financial challenges.
Health care expenses
Seniors often face significant health care expenses, including medical bills, prescription costs and long-term care expenses. Even with Medicare coverage, out-of-pocket costs can accumulate rapidly, particularly for those with chronic illnesses or medical conditions. In Maryland, where health care costs can be high, these expenses can quickly deplete a senior's savings and retirement accounts.
Limited income
Seniors often rely on fixed incomes from sources such as Social Security, pensions and retirement savings. With the rising cost of living, including housing, utilities and groceries, these fixed incomes may no longer be sufficient to cover expenses. In the Greenbelt area, where the cost of living can be higher than the national and state averages, seniors on fixed incomes may find it particularly challenging to make ends meet.
Assets
For many seniors, their home, retirement accounts and car represent the bulk of their assets and financial security. Filing for bankruptcy may become a necessity to protect these assets from creditors, especially if the senior wishes to pass them on to their heirs. Losing these assets could significantly impact a senior's quality of life and financial stability in their later years.
Seniors in Maryland may face various financial challenges that could necessitate filing for bankruptcy. They must carefully navigate their financial circumstances to ensure a secure and stable future.]]>On Behalf of The Law Office of Donald L. Bellhttps://www.donaldbellaw.com/?p=492082024-02-22T16:43:16Z2024-02-22T02:11:07ZBankruptcy estate
A bankruptcy estate refers to all the property, assets and interests that a debtor possesses at the time of filing for bankruptcy. This includes tangible assets like real estate, vehicles and personal belongings, as well as financial assets like bank accounts, investments and potential legal claims. A court-appointed trustee manages and administers the bankruptcy estate.
In Chapter 7 bankruptcy, a bankruptcy estate comprises the debtor's non-exempt assets, including property and financial holdings. A trustee liquidates these assets to repay creditors.
A Chapter 13 bankruptcy estate includes the debtor's property and earnings. However, the debtor retains possession and control of these assets while adhering to a court-approved repayment plan. Any disposable income generated during the repayment period becomes part of the bankruptcy estate.
Advantages of Chapter 7
In Chapter 7 bankruptcy, income tax refunds earned before the bankruptcy filing date are typically part of the bankruptcy estate. The bankruptcy trustee may use these refunds to repay creditors. However, Chapter 7 filers only lose their refund once.
If a debtor qualifies to receive a tax refund after filing for bankruptcy, they may be able to claim exemptions to keep a portion of it.
After a Chapter 7 filing, income earned belongs to the debtor and is not part of the bankruptcy estate. The debtor can use this income freely, but any debts discharged in the bankruptcy remain unaffected.
Advantages of Chapter 13
Whether you must surrender your tax refund in Chapter 13 depends on your specific circumstances. Creditors should receive any extra or "disposable income," so expect to turn over your tax refund to the court-appointed trustee annually for creditor payments.
Certain factors may allow you to retain your refund, such as if your repayment plan incorporates refund retention, you qualify for an exemption or you are paying a significant portion of your debts.
In many cases, Chapter 13 filers do not receive tax refunds until they fully pay their bankruptcy obligations. Still, Chapter 13 is sometimes the better option because you get to keep other assets, such as your home.
Consult an attorney
Bankruptcy is a complicated process, with tax refunds being only one confusing issue. Work with a competent lawyer to decide whether Chapter 7 or 13 is best to protect your interests.]]>On Behalf of The Law Office of Donald L. Bellhttps://www.donaldbellaw.com/?p=492072024-02-10T15:32:17Z2024-02-10T15:32:17ZNegative impact on credit score
Failure to pay credit card debt promptly can have a detrimental effect on your credit score. Creditors report late payments to credit bureaus, and as a result, your credit score may decrease. A lower credit score can hinder your ability to secure loans and obtain favorable interest rates. It may even affect employment opportunities that require a good credit history.
Collection efforts
If your credit card debt remains unpaid, creditors may initiate collection efforts. This could involve contacting you directly, either by phone or mail, to request payment. Persistent non-payment may lead creditors to employ debt collection agencies to recover the outstanding amounts.
Legal action
In more severe cases, creditors may choose to take legal action to recover the unpaid debt. This could result in a lawsuit filed against you. If the court rules in favor of the creditor, it may allow creditors to pursue additional measures to collect the debt. This may include wage garnishment or asset seizure.
Credit card debt is far from uncommon. When managed properly, it can improve your credit and help you manage expenses or even earn rewards. Failing to pay credit card debt in Maryland triggers a series of escalating consequences, from accumulating late fees and damaging your credit score to potential legal actions and asset seizure. It is essential to address credit card debt issues proactively. Chapter 13 bankruptcy allows individuals to repay their debt over time on a restructured debt plan while free of creditor hassle. It can be a valuable tool for reducing or getting rid of credit card debt.]]>On Behalf of The Law Office of Donald L. Bellhttps://www.donaldbellaw.com/?p=492062024-01-26T04:14:21Z2024-01-27T04:14:14ZChapter 7 vs. Chapter 13
In Chapter 7, courts may sell non-exempt assets to repay creditors, potentially affecting your property. However, Maryland's generous exemptions, such as those for homestead and motor vehicles, often allow individuals to retain essential assets.
Chapter 13, on the other hand, involves creating a repayment plan, enabling you to keep your property while gradually settling debts.
If you are able to make regular monthly payments to settle your debts, choosing Chapter 13 can eliminate the worry about losing assets and is probably the better option.
Homestead exemption
In Maryland, the homestead exemption allows you to shield up to a certain amount of equity in your primary residence from the bankruptcy process. The equity limit adjusts periodically, so it is essential to stay informed about the current figures.
Motor vehicle exemption
This exemption permits you to protect a specific amount of equity in your car. You can calculate your equity by subtracting any outstanding loans or liens on the vehicle from its current market value.
Wildcard property exemptions
Personal property, including household goods, clothing and appliances, is also subject to exemptions. Maryland provides a wildcard exemption, allowing you to protect a certain dollar amount of any property you choose, such as additional equity in your home, car or any other valuable possessions.
Tools of the trade exemption
Maryland recognizes a tools of the trade exemption for those whose livelihood relies on specific tools or equipment. This allows you to protect tools, books, instruments or other implements of your trade or profession up to a certain value.
Wage exemption
Maryland law also includes a wage exemption, protecting a portion of your earnings from seizure during bankruptcy. This exemption aims to ensure that individuals can maintain a reasonable standard of living even when undergoing the bankruptcy process.
State vs. federal exemptions
Unlike some states that allow a choice between state and federal exemptions, Maryland mandates adherence to its specific set of exemptions. However, individuals filing for bankruptcy in Maryland can claim federal nonbankruptcy exemptions; defined by federal law, these include specific categories such as Social Security benefits, veterans' benefits and certain pension funds.
Exemption protection
While bankruptcy can be a complex process, being aware of the protections offered by these exemptions can provide a measure of relief and help you make informed decisions about your financial future.]]>On Behalf of The Law Office of Donald L. Bellhttps://www.donaldbellaw.com/?p=492032024-01-13T18:55:27Z2024-01-13T18:55:27Z1. Upfront fees and guarantees
Be cautious of any entity that charges upfront fees for foreclosure assistance. Legitimate assistance programs typically do not require payment until after they have helped you. Be wary, too, of promises that sound too good to be true. Scammers often guarantee they can stop the foreclosure process or ensure loan modification without assessing your specific financial situation. Legitimate assistance providers cannot guarantee specific outcomes, as each case is unique.
2. Pressure tactics and urgency
Scammers often employ high-pressure tactics. The idea is to create a sense of urgency to coerce you into making hasty decisions. Be wary of anyone rushing you to sign documents or transfer ownership of your property. Legitimate assistance processes take time and involve careful consideration of your financial circumstances. If you feel uncomfortable, take a step back and seek advice from reputable sources before proceeding.
3. Unsolicited offers and unusual communication
Foreclosure rescue scams often begin with unsolicited offers of assistance. These may come through mail, phone calls or door-to-door visits. Legitimate organizations do not reach out to homeowners without their initiation. Be cautious, too, of communication that appears unprofessional or lacks official documentation. Scammers may use generic email addresses, refuse to provide written information or use threatening language to instill fear.
Yahoo Finance reports that there were about 100,000 foreclosure filings in the United States in the first quarter of 2023. Seeking assistance from reputable housing counseling agencies and staying informed about your rights may help you avoid losing your home to foreclosure – and avoid being the subject of a foreclosure assistance scam.]]>On Behalf of The Law Office of Donald L. Bellhttps://www.donaldbellaw.com/?p=492012024-01-12T16:12:20Z2024-01-12T16:12:20ZEvaluate your financial situation
Determining the right time to file for bankruptcy is a personal decision. Your unique financial circumstances can make all the difference when making this choice. If your debts have become overwhelming, and you find yourself struggling to make ends meet, now might be the time to consider seeking relief by filing for bankruptcy.
Costs and benefits
You might think it is counterintuitive to pay for help when you are already in financial distress. However, the costs associated with filing for bankruptcy often pale in comparison to the potential benefits. Many individuals use their tax refunds to cover the filing fees and associated costs, making it a more manageable process. By weighing the expenses against the potential benefits of achieving financial freedom, you may find that the investment is worthwhile in the long run.
Protect your assets
One common concern individuals have when contemplating bankruptcy is the fear of losing their home. However, the process helps you regain control of your financial future while also providing protection for certain assets. Make sure to research and understand the specific implications of bankruptcy on your property.
The United States Courts reported that annual bankruptcy filings totaled 418,724 in the year ending June 2023. Bankruptcy is a valid debt relief option that many people utilize to great effect, so there is no need to hesitate if you believe bankruptcy is right for you.]]>On Behalf of The Law Office of Donald L. Bellhttps://www.donaldbellaw.com/?p=492002024-01-09T01:49:08Z2024-01-11T01:48:01ZChapter 13 bankruptcy and home retention
For homeowners who worry about losing their homes, Chapter 13 bankruptcy may provide a viable option. This legal process allows individuals to restructure their debts, including mortgage arrears, into a manageable repayment plan. By filing for Chapter 13 bankruptcy, homeowners may be able to keep their homes while addressing other outstanding debts.
You can also explore government programs, including the Maryland Mortgage Program, that may offer relief options for eligible homeowners.
Rising interest rates and inflation
As interest rates climb, the cost of borrowing money increases, affecting variable-rate mortgages and potentially stretching homeowners' finances. Inflation further compounds the financial strain. If you are struggling, address your debt situation promptly to prevent the risk of foreclosure.
Credit card debt
The average household in the United States carries about $7,951 of credit card debt. High interest rates and other factors can cause this debt to quickly spiral out of control.
Medical expenses
Medical bills contribute significantly to financial distress. To mitigate this risk, two avenues are to negotiate with health care providers and inquire about financial assistance programs.
In the face of rising interest rates, inflation and mounting debt, the threat of losing your home in Maryland is a serious concern. By taking proactive steps and considering Chapter 13 bankruptcy when necessary, homeowners can increase their chances of protecting their homes and achieving financial stability.]]>On Behalf of The Law Office of Donald L. Bellhttps://www.donaldbellaw.com/?p=491992024-01-09T01:44:46Z2024-01-09T01:44:46ZJob loss often triggers bankruptcy
Many people who file bankruptcy have diligently managed their finances, adhered to a budget and responsibly handled their debts in the past. It was only an unexpected job loss that caused them to have issues.
In this situation, the stable ground they once had begins to crumble, and financial security becomes an elusive dream. In these situations, bankruptcy becomes a lifeline rather than a choice driven by recklessness.
Other external factors can cause financial strain
The burden of overwhelming medical expenses from a severe health crisis can also lead to financial trouble. Medical bills can drain savings, and bankruptcy can allow individuals to prioritize health without the added stress of insurmountable debt.
Natural disasters represent another uncontrollable force that can wreak havoc on financial stability. Whether it is a hurricane, earthquake or wildfire, the aftermath can result in the loss of homes, possessions and livelihoods. Even with insurance coverage, the process of rebuilding is often a lengthy and costly endeavor. Individuals may find themselves overwhelmed, and bankruptcy is a practical solution to alleviate the burdens.
It is important to recognize that bankruptcy is a tool to provide relief and a fresh start. Instead of viewing it as a personal failure, society should embrace a more compassionate perspective. Individuals facing bankruptcy are often taking the necessary steps to regain control of their lives and move forward.]]>On Behalf of The Law Office of Donald L. Bellhttps://www.donaldbellaw.com/?p=491962023-12-30T18:29:45Z2023-12-30T18:29:13ZA lump sum settlement
When you negotiate to pay off your card balance in a lump sum, the card issuer will likely accept an amount that is significantly lower than your balance owed. For example, your issuer may agree to accept 50% of the total amount due if you have been delinquent for many months.
This will resolve your debt burden immediately. Still, be aware that your card company will probably close your account when you settle, and credit bureaus will learn of the settlement.
A repayment plan
You can also negotiate a repayment plan or workout agreement to make your monthly payments more affordable. Your card issuer may reduce or waive interest and fees or let you pay a smaller monthly amount over an extended time period. While this allows you to avoid defaulting, your card company might also freeze your card during the repayment plan.
Effects on your credit
The main risk of negotiating credit card debt is harm to your credit score. Settling a debt for less than the full amount will show up on your credit report. Defaulting on your monthly payments also causes significant credit damage.
Even if you successfully complete a repayment plan, the negative marks will remain for seven years. It takes time to rebuild credit, so negotiating credit card debt relief now might limit your access to new credit products down the road.
Negotiating with creditors directly is just one option. Debt relief can also come after filing for bankruptcy, which may offer a more complete solution to your debt problems and minimize your exposure to scam artists. The right approach can resolve your outstanding card amounts and help restore your financial situation.]]>