Recent Blog Posts

Best Credit Problem Repair Web Sites

The Aylward Law Firm — Wed, 25 Apr 2012 21:39:00 GMT

If you want to understand credit reporting and credit scoring or learn how to repair your credit, clean up your credit report, rebuild credit, or protect your good credit in the future, start with these consumer-friendly websites.

Nolo's Credit Repair for Bad Credit Section
http://www.nolo.com/legal-encyclopedia/bad-credit-repair/
True to Nolo style, this section provides clear, concise information on credit, repairing credit, and staying out of credit trouble. Articles cover topics such as how to protect your credit, understanding credit reports and credit scoring, and how to rebuild your credit after running into financial trouble. You can also find step-by-step instructions on how to clean up your credit report yourself.

AnnualCreditReport.com
https://www.annualcreditreport.com/
Visit this site to order your free annual credit report from all three credit bureaus. Also has FAQs about reporting credit fraud, placing a fraud alert on your account, disputing information on your credit report, and ordering reports more than once a year.

myFICO
www.myfico.org
For a small fee, you can obtain your FICO score, understand the factors affecting it, and learn how to improve and protect your score. MyFICO's financial help center has lots of information on auto loans, credit cards, student loans, mortgages, and avoiding credit and identity fraud.

National Foundation for Credit Counseling (NFCC)
http://www.nfcc.org/
The NFCC website provides information about credit counseling and has a national directory of local member agencies -- nonprofit credit counseling agencies staffed by NFCC-trained, certified counselors. Counselors can provide pre-bankruptcy counseling as well as counseling regarding debt, credit, and foreclosure issues.

Association of Independent Consumer Credit Counseling Agencies (AICCCA)
http://www.aiccca.org
Click "Find an Agency" for a list of member credit counseling agencies in your state.

Federal Trade Commission (FTC)
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm
The FTC's online credit repair fact sheet alerts consumers to credit repair scams and provides information on how to repair your credit yourself.

Nolo's Debt & Collection Agencies Section
http://www.nolo.com/legal-encyclopedia/collection-agencies/
If your credit problems are the result of overall debt trouble, turn to this website for information on what to do if you can't pay your bills, how to handle debt collectors, and your options for digging yourself out of a financial hole.

Maryland and Virginia, Two Different Approaches to Foreclosure

The Aylward Law Firm — Mon, 05 Mar 2012 22:47:00 GMT

Maryland vs. Virginia: Two different approaches to foreclosure

By Annys Shin, Published: March 3

Before the housing meltdown, Maryland’s foreclosure process was so quick that it was nicknamed “the rocket docket.”

Foreclosures had to be filed in local courts and approved by judges, but the court’s involvement was so minimal and the deadlines so swift that a lender could schedule a foreclosure sale 15 days after the borrower defaulted.

In 2007, as thousands of Marylanders began losing their homes at an alarming pace, Gov. Martin O’Malley (D) vowed to end what he called the “fast track to foreclosure.”

Starting in 2008, state lawmakers passed a series of measures designed to give homeowners — some the victims of predatory lending, others hurt by the recession — more time to find a way to stay in their homes. The changes included forcing lenders to wait longer to file foreclosures, giving homeowners more access to housing counseling, and requiring lenders to participate in mediation.

Each change forced banks, loan servicers and the courts to adjust the way they do business, adding long delays to the foreclosure process. And last year, major lenders voluntarily halted foreclosures nationwide over concerns about “robosigning,” in which employees at firms hired to process foreclosure documents routinely signed them without reading them.

The result: Maryland has gone from having one of the country’s fastest foreclosure systems to having one of the slowest.

Foreclosure activity in the Free State fell by 16 percent in the three months after the 2008 changes took effect and by 58 percent in the three months after a mediation law took effect in 2010, according to a state report. But sales activity and prices fell as well.

The starkest example of these trends is in Prince George’s County, which has led the state in foreclosures since the beginning of the housing bust.

Homes in Prince George’s have lost 52 percent of their value from their peak in 2006, and houses now spend an average of 102 days on the market, according to Metropolitan Regional Information Systems, which tracks real estate data. And as of January, 52 percent of county homeowners owed more than their houses were worth, according to data compiled by RealtyTrac for The Washington Post.

Some economists and housing experts contend that Maryland’s efforts to protect distressed homeowners are stifling a recovery in the very communities they are trying to help.

They point to Virginia, where lenders can foreclose without going through the courts, and where the housing market has rebounded more quickly. In 2011, median home sale prices in Virginia rose 0.8 percent, real estate research firm CoreLogic reported, while in Maryland they fell by 3.8 percent.

“The real issue is the length of time of the process. If you just keep pushing back foreclosures that would happen anyway, it just delays the inevitable,” said Thomas A. Lawler, whose firm, Lawler Economic & Housing Consulting, provides market data, analysis and forecasts. “I am not saying therefore everyone should have a fast process that is not fair, but a fair process should not leave a house in foreclosure for multiple years.”

The delays contribute to what’s known as the “shadow inventory” — houses that are heading toward foreclosure but have not reached the market. Maryland has a far larger shadow inventory than Virginia, a fact that is likely to have a negative effect on Maryland home prices for months, experts say. A special task force recommended in January that Maryland speed up the foreclosure process for vacant homes.

But Virginia’s faster foreclosure process has trade-offs, too, counselors and homeowner advocacy groups say. They say it has been brutal for families in Prince William County, another epicenter of the housing meltdown.

At the height of the crisis, Matty Lupo, a leader of Virginians Organized for Interfaith Community Engagement, an advocacy group for homeowners, remembers families living out of cars and in shelters, being separated, or driven from the county. Even now, she said, Prince William homeowners are still being hurt by harrowing cases of bank incompetence or indifference.

“It’s very sad,” Lupo said. “And it’s still going on.”

BIG FORECLOSURE SETTLEMENT NOT DONE YET?

The Aylward Law Firm — Mon, 05 Mar 2012 21:36:00 GMT

As reported in the Huffington Post:

It's been 21 days since the government announced with great fanfare a $25 billion national foreclosure settlement with five big banks -- long enough for three generations of houseflies to live, love and die.

But the deal, which resolves claims that the banks forged or "robo-signed" signatures to speed foreclosures and committed a host of other loan servicing errors, isn't final until the government files it in federal court. Until then, the public is left to guess whether the settlement is as tough on the banks as the government claims and whether the promised enforcement mechanisms to ensure banks are playing by the rules have real teeth.

The final settlement document should spell out in exact language the rules of the deal. As of now, the government has released only a summary.

On Tuesday, Shaun Donovan, the secretary of housing and urban development, assured the Senate housing committee that finalizing the documentation was mostly a matter of "dotting i's and crossing t's." No need to worry that the parties were still dickering behind the scenes, he said.

Donovan also said at the hearing that the papers should be filed in the federal district court in Washington, D.C., this week. But sources familiar with the drafting of the documentation say the filing date has likely been postponed again. Next week is now the target. These sources chalk up the delays to simple logistics: Dozens of state and federal agencies, plus the five banks (JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and Ally Financial), must sign off.

Why wasn't all this done in advance of the Feb. 9 announcement? The Securities and Exchange Commission, for example, often files a court complaint against and announces a settlement with a company accused of financial misconduct on the same day.

The Department of Housing and Urban Development declined to comment through a spokesman, but a gathering flood of leaks about the status of the deal probably forced the government to announce too soon. As such, some delay is to be expected.

Still, each day that passes drives speculation about whether the deal is as set in stone as the government has led the public to believe. A recent regulatory filing by Bank of America with the SEC has added fuel to this argument."There can be no assurance as to when or whether binding settlement agreements will be reached, that they will be on terms consistent with the Servicing Resolution Agreements, or as to when or whether the necessary approvals will be obtained and the settlements will be finalized," reads language in the bank's annual 10-k filing.

Government officials who are collecting signatures and ironing out the details say emphatically that there are no substantive issues still to resolve. "This is not an accurate description of where we are," a senior government official told The Huffington Post after reading the Bank of America language.

Wells Fargo, in its annual 10-k filing, did not include this kind of hedging language.

Still, the continuing delay and the Bank of America language are worth at least one raised eyebrow.

Secured Credit Cards--Improve Your Credit After Bankruptcy

The Aylward Law Firm — Wed, 22 Feb 2012 21:14:00 GMT

As reported in Fox Business:

Millions of Americans have suffered financially as a result of the recent credit crunch, and many of them have been left with damaged credit reports. One way of starting to repair such damage is by obtaining a secured credit card. With these, you deposit a sum up front, usually a minimum of $200-$500, which normally becomes your credit limit. You then demonstrate financial responsibility by making regular on-time payments.

You may earn interest on your security deposit, though that's unlikely to be over 1 percent per year. But in all but one case, you'll pay much more interest than that on your outstanding balance.

Providing you use your new secured card responsibly, and you choose one that reports your activity to all three big credit bureaus (Experian, Equifax and Transunion), you may well qualify for a mainstream credit card with some perksin a year or two.

Best secured credit cards

Consumer Action recently published the results of its latest survey of secured credit cards, and its report was both authoritative and informative. It found one such product (the Applied Bank Platinum Visa) that charged 0 percent APR on outstanding balances. However, the attractively low APR is offset by its monthly fees, which came in at the equivalent of a hefty $119 per year.

Among the best deals Consumer Action found were HSBC's Orchard Bank Classic MasterCard and the Orchard Bank Visa Classic. These both have great credit card rates of 7.99 percent APR on their secured versions, and reasonable annual fees of $29-$59. HSBC also provides a 25-day, interest-free grace period on purchases you clear each month. Most, but not all, issuers provide grace periods on secured cards.

The report also noted the Capital One Secured MasterCard, a "partially secured" card in which qualified borrowers can put down $49 and get a $200 line of credit.

Just be careful to avoid those really predatory credit card companies. In a Nov. 29 press release, Linda Sherry, Consumer Action's director of national priorities, observed:

We believe that secured cards can help disciplined consumers rebuild their credit, but some cards out there are best avoided. Consumers who are working to rebuild a damaged record do not need to dive back into debt, particularly when secured cards are available with reasonable rates that pay cardholders interest on security deposits.

Borrower beware

Recently, IndexCreditCards.com carried a feature article, "Secured credit cards and the Rottweiler tendency," that warned readers to avoid one especially predatory issuer of secured credit cards. At the time, First Premier Bank of Sioux Falls, S.D., charged an incredible 49.9 percent APR on outstanding credit card debt along with:

A $75 annual fee (reduced to $45 during your second year)
A $6.50 a month maintenance fee (waived during your first year)
A $25 fee for every $100 increase in your credit limit, once you qualify

The article concluded: "If you're in trouble, by all means use a secured credit card to give yourself some breathing space, and rebuild your credit score. But if only First Premier is prepared to take you on, our advice is to forget it."

Credit cards aren't for everyone

And it's true that not everyone is likely to qualify, even for a secured product. Some credit card companies won't accept your application if you're still going through bankruptcy or you have recent delinquencies. However, if your bankruptcy has been discharged and you've kept up to date with your bills over the previous few months, you stand a better chance of seeing your secured credit card application approved.

The original article can be found at IndexCreditCards.com:
Best and worst secured credit cards for 2012

Use credit cards with caution, especially after you file bankruptcy. You may not be eligible to file a second bankruptcy case for eight (8) years. If you want additional information regarding credit repair, contact your Maryland Bankruptcy Attorney, your Baltimore Bankruptcy Attorney or yourMontgomery County Bankruptcy Attorney.

Student Loans: The Next National Debt Bomb

The Aylward Law Firm — Wed, 15 Feb 2012 18:22:00 GMT

As reported in USA Today, February 7, 2012, "Student debt is looming as a national problem that could have repercussions reminiscent of the mortgage crisis, says a report by the National Association of Consumer Bankruptcy Attorneys." The total student loan debt is now in excess of the national credit card debt, at about $1 trillion, above credit card debt estimated to be about $798 billion. The student loan debt is about 14 times more than 15 years ago.

Bankruptcy attorneys in a nationwide survey by NACBA, National Association of Consumer Bankruptcy Attorneys, said that they are seeing more people faced with overwhelming student loans. The NACBA report calls for changes in the student loan debt. As it stands now, there is no statute of limitations on collection of student loan debt. Student loan creditors can garnish your wages, take tax refunds, and take Social Security benefits without any court judgment. Student loans are generally non-dischargeable, and have been so since 2005. Prior to 1976 all student loan debt could be elimiated in Bankruptcy. After 1976 Congress required student loans to be in repayment for 5 years to be discharged. In 1990 the 5 year requirement extended to 7 years. 1n 1998 the 7 year requirement was elimiated. The 2005 amendments include private student loand in the nondichargeability category.

The only exception is for undue hardship. The debtor must bring a seperate lawsuit in bankruptcy court, proving that his or her loans should be discharged for undue hardship. Most people cannot meet the extremely high standard of proof and most cannot bear the cost of this lawsuit, because the student loan creditors aggressively defend these suits.

The NACBA report calls for a change in bankruptcy laws to allow a relief valve for student loan debt. In the survey, 81% of respondents said potential clients with student loan debt have increased "significantly" or "somewhat" in the past four years. And 95% of respondents reported that few student loan debtors have any chance of discharging what they owe through a bankruptcy proceeding because they have to prove "undue hardship" — a standard that is difficult to meet.

The bankruptcy attorneys association's report urges a change in bankruptcy laws, rolling back to the earlier law allowing discharge of student loans, after 5 years of repayment, so those burdened with student debt would be on the same footing as others facing bankruptcy. In addition, the group urges amendment to the bankruptcy laws allowing undue hardship to be shown at any time during repayment.

As reported by USA Today, U.S. Rep. Steve Cohen, D-Tenn stated, "It's not fair and needs to be corrected," a sponsor of legislation that would make changes suggested in the report. Cohen outlined the revisions in a conference call with reporters Tuesday, along with officials from the bankruptcy lawyers association. Douglas Lustig, a trustee for federal bankruptcy court in western New York, agreed that something should be done.

"The problem is that you have former students who filed for bankruptcy and are not able to get a fresh start," said Lustig, who also represents clients in bankruptcy court, as reported by USA Today. Those with student loan debt should be able to discharge all or part of the money owed in a bankruptcy proceeding and the law should be changed so the debt can be paid over a longer period of time, Lustig said.

The excalating cost of college tuition and room-and-board, plus the high interest rates of private loans are all adding to the increasing problem. In addition, many students must obtain masters degrees to be successful in the job market.

William Brewer Jr., president of the National Association of Consumer Bankruptcy Attorneys, offered a warning. Take it from those of us on the frontline of economic distress in America," he said. "This could very well be the next debt bomb for the U.S. economy."

I fortunate to be part of a delegation that visited our Maryland lawmakers last week. Our discussion of this issue was well received, but needs to be further highlighed by concerned groups and the media to push the issue forward on Capital Hill. Look for future blogs for updates.

If you are facing overwhelming debt, including student loan debt, contact your Baltimore Bankruptcy Attorney, or your Montgomery County Bankruptcy Attorney to review your options.

Trustee Meetings in Maryland, Where Will I Have To Go?

The Aylward Law Firm — Sun, 25 Dec 2011 02:30:00 GMT

Where is the Bankruptcy Court in Maryland and will I have to go?

You will have to attend a "Meeting of Creditors" as least once.

After the court receives a Chapter 7 or 13 bankruptcy filing, it schedules a meeting of your creditors. The day after your case is filed, the court schedules your meeting of creditors. In most cases it is about 4-5 weeks from the date of filing. This meeting cannot be rescheduled.

In the vast majority of cases no creditors attend the meeting and it is just you, your bankruptcy attorney, and the bankruptcy trustee for about a ten minute meeting. This is called the section 341 meeting.

There are two bankruptcy courts departments in Maryland, one in Greenbelt and one in Baltimore (although 341 meetings are also held in Hagerstown and on the Eastern Shore).

A list of sample questions for your Trustee meeting will be included in your packet from your attorney at The Aylward Law Firm LLC. Ms. Aylward was a former Chapter 7 Trustee for 8 years. She will advise you of the questions likely to be asked and prepare you for your Trustee meeting.

Consult your Baltimore Bankruptcy Attorney or your Montgomery County Bankruptcy attorney to discuss your bankruptcy options and alternatives to bankruptcy.

Debt Settlement, Does It Work?

The Aylward Law Firm — Sun, 25 Dec 2011 02:02:00 GMT

Client's come to me on a regular basis, after working with a debt settlement company. Some of them have been in debt settlement programs for many months, up to two years. They have spent thousands of dollars in an effort to "settle" their debts. Much of this money went to the debt settlement company. I have seen debt settlement agreements that charge up to $7,000. The client has spent money, time and effort to settle their debts and encounters numerous problems along the way, only to decide that bankruptcy is the best option.

An alternative to bankruptcy tops every debtor’s wish list. Debt settlement companies pitch: “Don’t file bankruptcy” on television and the radio. Instead, they want you to pay your money to them. They promise to settle your debts for pennies of the dollar without bankruptcy, saying they will help you save up a big pot of money. The problem with this is that it almost never works. Why?

While you are giving them your money, you go into default with the credit card company
When you go into default, your interest rate goes up--as high as 29%
Your late charges and fees also go up
Credit card companies start to sue
Your wages start getting garnished
Your bank account gets garnished
Creditor calls do not stop
You pay money to the debt settlement company, much of which does not go into a pot to pay creditors, but goes to the debt settlement company
If you actually “save” enough money to make a settlement offer, you are making it on a much higher amount than you owed before
If you settle for a discount, the discount you settled for is almost a much as you owed in the first place
The “debt settlement” company wants a big fee for doing what it did for you.

You will end up worse off than you started. Paying hundreds if not thousands of dollars to the debt settlement company. Finding out after suit(s) have been filed against you and wages garnished that bankruptcy is the better option.

Debt Settlement Companies are scams and will almost always leave you worse off than they found you. Contact your Montgomery County Bankruptcy Attorney to discuss your options. Your Baltimore Bankruptcy Attorney will give you a free consultation. My job is to give you the options that are right for you--not what is right for me.

Prudent Walkaway--Shift From Stragic Default

The Aylward Law Firm — Thu, 01 Sep 2011 23:33:00 GMT

Prudent Walkaway—A Dramatic Change from Strategic Default

In the past two years many families have had to consider "strategic default" of their home. "Strategic default" means walking away from an underwater home, even though the homeowner can afford to pay the mortgage. Many homeowners considered this option as the only viable option where home values plummeted by 30-40% or more. These homeowners felt trapped in their homes, with growing families or the need to move to new locations for employment.

Other homeowners cannot afford to pay the mortgage and had no choice but to default on their mortgage. Most of the people I've encountered have been forced to default on their homes. The reasons are many:

homes in declining areas; mortgage payments too high—homeowner was not approved for loan modification;
homeowner close to retirement and can no longer afford mortgage payment;
family living in two bedroom condominium, and has second or third child on the way—needs to move to larger home; or
family needs to relocate to new location for employment and cannot sell current home.

Homeowners considering strategic default are urged to compare current mortgage payments with costs of rentals in their area. Where rentals for a family of four can be in the area of $2,000/month, homeowners can dramatically cut their housing costs—compared to current mortgage payments. Many families are paying mortgage payments of upwards of $4,000, including taxes, homeowner's association payments, high utilities, lawn maintenance and other costs. Compare that to costs of rentals--some families are opting for strategic default, especially where one wage earner has lost a job or one or both wage earners have significant reduction in income.

A Wall Street Journal article entitled, "American Dream 2: Default, Then Rent," described a couple who had defaulted, cutting their housing costs from almost $4,000/month to just over $2,000/month. They were living in a larger, maintenance free home, with "a swimming pool with three waterfalls."

The families I meet are those who are surviving tough times. These people have exhausted their retirement funds and savings. They are families surviving on one income down from two, or have overwhelming medical bills, with no options left, but to default on their home. Most of these families are adjusting to the "new normal"—including a permanent reduction in income, along with higher costs of living.

As recently reported in the Huffington Post (by Nicholas Carroll,) for these families, it is a "matter of prudently walking away from the mortgage that is dragging their family and future under the waves." In the first scenario, the family (down to one job from two) bets that they will be fully employed in the next year. They continue paying mortgage, credit card payments and car payments. If they bet wrong their cash position could plummet by $40,000 in a few months—using 401K and savings to finance their obligations.

In the second scenario, the family prudently walks away. They project that their current income—one salary--is the new normal. They immediately stop paying the mortgage and credit card payments. They cut their expenses up to $2500 a month. This family remains in their home rent free, for up to two years, while waiting for the lender to foreclose on their home. They retain their 401K savings and their cash savings. They effectively have three years to improve their employment situation.

The difference between the two scenarios is dramatic. If the family bets the primary bread-winner will be working within the year and is wrong, they could have exhausted their 401K savings, and leave their home without sufficient funds to rent a decent apartment. The family that bets the primary bread-winner will not find a job in the next year and stops paying the debts will be leaving their home with 401K and some savings intact, move to a rental--in the same school district, if need be, and will have three years for the primary bread-winner to find a job. More than likely they will be in their home for 18-24 months without making any mortgage payments.

Consider a "prudent walkaway"—in lieu of staying in your home and using savings to make mortgage payments. Instead, rent a home and reduce living expenses before dipping into 401K or other savings. Contact your Baltimore Bankruptcy Attorney to consider your options for strategic default and prudent walkaway.

For more information about strategic default, prudent walkaway, chapter 7 bankruptcy or chapter 13 bankruptcy contact your Montgomery County Bankruptcy Attorney.

Student Loans and Bankruptcy

The Aylward Law Firm — Tue, 09 Aug 2011 01:11:00 GMT

Student loan debt can be a huge issue. They are around long after graduation and can be difficult to manage with other debts. Student loans are not dischargeable in bankruptcy. This is a non-dischargeable debt. These debts remain after bankruptcyand you must repay it.

There is one exception; some student loans can be considered an undue hardship, which means the loan can be discharged or eliminated if the loan payments are an extreme burden on you financially.

Show Your Hardship to the Bankruptcy Court

The first step to proving undo hardship is to file a separate complaint to seek discharge of your student loan debt. Next you will have a pretrial hearing on your complaint, and then a trial on your complaint to discharge your student loan debt. This will be a challenge. You will have to show and prove the following:

That in your current situation, you can't maintain a minimum standard of living and repay your loans
Your bad financial situation is likely tocontinue
You made honest efforts to pay off the loans

It isvery hard to show undue hardship unless you are physically unable to work and your situation is not likely to improve. If your student loan makes up most of your debt, it probably would not be in your best interest to attempt this unless you are disabled.

In the past, some privately funded student loans could be discharged in a Chapter 7 bankruptcy. However, the law changed with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Now, any education loan that qualifies for a tax deduction is non-dischargeable, unless you show "undue hardship."

Loan Consolidation and Chapter 13 Cases

Consolidating your student loans with other debts in a Chapter 13 case may be an option if you can't show unduehardship. In Chapter 13, you work out a plan to repay your debts over three to five years. Collection will stop actions against you and the chapter 13 plan may lower your monthly payments.

In order to file a chapter 13, you need a stable income with disposable income. Disposable income means money left after paying for necessities. You can't have more than $1,081,400 in secured debt (debt involving property that your creditor mighttake if you don't make your payments) and $360,475 in unsecured debt. These amounts change on a regular basis to reflect updates in the Consumer Price Index.

If you include your student loan in a chapter 13 repayment plan, you may be able to lower the loan balance over the life of your repayment plan. In addition, you may be able to lower your monthly payment during the chapter 13 plan, depending on your disposable income. You will still owe whatever student loan debt remains when your plan is complete.

Challenging the Loan Balance

It is important to know the exact balance of your loan. Sometimes it is not always clear. Errors can happen when loans are transferred and sold to different lenders over the years.

In a Chapter 13 case, you can use an objection against the lender's student loan claim to get the court to determine your proper loan balance. Once a judge decides on the correct amount you owe, it is binding on the lender even if the repayment period on the loan stretches beyond the end of the bankruptcy plan.

Government Collection Procedures on Defaulted Student Loans

The Higher EducationTechnical Amendments of 1991 (HEA) eliminated all statutes of limitations, or time limits, for any collection action by a school, guaranty agency, or the United States under a federal loan program. This law also ended time limits for tax refund intercepts, wage garnishments and other collection efforts.

If you're not able to discharge your student loans in bankruptcy or establish a repayment plan in a Chapter 13 case, the US Department of Education may:

Tack collection fees of 25 percent and collection agency commission fees of approximately 28 percent onto the principal, interest and penalties you already owe
Take your federal income tax refund until all your defaulted student loans are paid
Garnish up to 15 percent of your wages, without suing you first
Take as much as $750 per month (up to 15 percent of your income) in federal benefits to which you might be entitled, including Social Security retirement and disability income, and apply that amount toward your outstanding defaulted student loan debt
Sue you for your outstanding student loan debt and place liens on your real property

Repayment Alternatives

Depending on the status of your loan default, there are options that may be available to you:

Work out a repayment plan with the student loan lender that stretches payments out over a longer period or calls for graduated payments that increase as your earning potential increases
Get the lender to agree to put off repayment until your career and financial circumstances improve, or
Consolidate all your student loans into one loan that spreads the payments over a longer period of time, often at lower interest rates

Whichever way you decide to deal with your increasing student loan, it is best to embark upon the problem as soon as possible to avoid paying more in the long run. Contact your Maryland Bankruptcy Attorney to determine if chapter 13 bankruptcy may assist you in your student loan debt. Contact your Montgomery County Bankruptcy Attorney to discuss options to assist you in repayment of your student loan debt.

Questions for Your Attorney

What steps must I take to show undue hardship in order to have my student loans discharged in bankruptcy?
Should I file Chapter 13 bankruptcy to get a handle on paying off my student loans and other bills? Will it damage my credit?
Can a lawyer help me work out a repayment plan with the student loan lender or can I do that myself?

Contact your Baltimore Bankruptcy Attorney to set up a free consultation to discuss your student loan debt and repayment options.

Student Loan Default--What Will Happen?

The Aylward Law Firm — Tue, 09 Aug 2011 00:40:00 GMT

STUDENT LOAN DEFAULT: WHAT WILL HAPPEN?

Student loan default occurs when the borrower does not stay current with payments. You become delinquent the first day the borrower misses a payment. If you stay in delinquent status for nine months, the loan than enters into default. The borrower may be responsible for debt collection fees and loan guaranty agency commissions.

The Department of Education can do any of the following to collect the debt:

Take Your Tax Refund

One of the most effective methods that the department of education and loan guaranty agencies uses to collect on defaulted student loans is to take the borrower’s tax refund. The IRS receives a report from the Department of education with information pertaining to student loans that are in default. The borrower receives notification from the department of Educationor Loan Guaranty agency giving them the option of paying the debt or appealing the offset. This is offered before a tax offset is removed from the refund. Unless the borrower makes an appeal, the IRS will automatically seize theborrower’s federal and/or state tax refund and apply it towards the loan payment. The borrower may appeal the offset with proof of the following defenses.

The loan has been repaid
The loan is being paid under a negotiated repayment plan
The loan is in deferment, forbearance, or has been cancelled
The borrower is deceased or suffers from permanent and total disability
The loan does not belong to the borrower
The loan is unenforceable because of fraud, such as a forged signature
The school owes the borrower a refund
The borrower's school closed
The borrower was falsely certified for loan eligibility or
The borrower has filed for bankruptcy and the case is still pending, or a bankruptcy discharged the loan

An objection must be entered by the borrower to offset within 65 days from the date of the notice.

Garnish Your Paycheck

The Department of Education and loan guaranty agencies may also garnish wages to offset a student loan debt. It is important to know that it is unnecessary to obtain a court judgment prior to garnishment. Fifteen percent of the debtor's disposable income can be garnished. The amount must be less than 30 times the hourly minimum wage ($7.25/hour effective July 24, 2009), however. Therefore, the Department or agency may garnish no more than $217.50 of adebtor's weekly income.

A borrower will receive a notification from the Department of Education or the loan guaranty agency of intent to garnish wages. The borrow will have the opportunity to repay the debt or the right to request a hearing to dispute the wage garnishment. The borrower can raise an objection on the reasons listed above.

If a borrower requests a hearing within the deadline specified in the notice, the borrower's wages are safe from garnishment while the case is under review. If the debtor fails to make such a request by the deadline, however, the wage garnishment may proceed, but will terminate if the debtor ultimately prevails in a hearing.

Take Your Federal Benefits

The Debt Collections Improvement Act allows the government to take some social security benefits from a student loan borrower in default. Supplemental Security Income is off limits, but Social Security retirement benefits and Social Security disability benefits can be set aside to pay loan debt. Only $9,000 per year, or $750 per month, can be used, however. If the borrower receives less than this amount, taking Social Security benefits is prohibited. Additionally, the amount cannot exceed 15 percent of the borrower's federal benefit.

The borrower has the option to object to the offset by requesting a review within the specified time on the notice. A borrower may request a modification or suspensionfor reasons of financial hardship. The borrower will have to provide proof ofyearly income, federal benefit, and financial statement.

Revoke Your Professional License

Some states allow professional and vocational boards to revoke, suspend, or refuse to certify a license when the member has defaulted on student loan debt. This typically applies to attorneys, medical professionals, teachers, and state officers. The borrower may request a hearing with the board to review thepotential action.

Sue You

The Department of Education can sue to collect on a student loan default. Because a statute of limitations is inapplicable, the agency has no time limitations on collecting the debt.

The Department can collect from assets such as bank accounts, valuable property, and can place a lien on the borrower's real property. As the result of such a lien, theborrower may not sell the property until the lien is removed.

If the borrower does not have enough assets or a lawsuit would exceedthe amount recovered from the debtor, the Department will most likely decide against suing the borrower.

Bankruptcy Options

Chapter 13 may be an option for you to repay your student loan debt. Student loans are non-dischargeable in bankruptcy. Chapter 13 may allow you to repay student loans in a payment plan over 3-5 years, subject to court approval. Contact your Maryland Bankruptcy Attorney to discuss your eligibility for Chapter 13 and wheth Chapter 13 will help you repay your student loan debt.

Chapter 13 will stop collection efforts of any creditor including student loan lenders or the federal government. Collection efforts may resume upon dismissal of the bankruptcy case or the conclusion of the chapter 13 plan. Contact your Baltimore Bankruptcy Attorney to determine if chapter 13 bankruptcy will help you alleviate your debt and provide a fresh start for you and your family.

Chapter 7 and Chapter 13 bankruptcy have a complicated set of rules. Contact your Montgomery County Bankruptcy Attorney to determine if chapter 13 bankruptcy is right for you.

How To Get A Credit Card With Poor Credit?

The Aylward Law Firm — Mon, 11 Jul 2011 21:45:00 GMT

HOW TO GET A CREDIT CARD WITH POOR CREDIT?

Credit cards have been established as a necessity in today's financial world. There are options available for people with bad credit in the form of prepaid, secured, and unsecured credit cards. It is important to know the difference between the three.

Prepaid Cards

Prepaid cards are convenient for online shopping, travel reservations, and daily shopping checkouts. They do nothing to rebuild credit rating. A deposit is sent to the card issuer and the amount sent is set as the credit limit. There are sometime monthly fees charged for the use of the card. The issuer does not report anything to the credit bureaus. There are cards for people that fill the gap between prepaid credit cards; secured and unsecured credit cards.

Secured Cards

Secured credit cards are cards that allow the consumer to set the credit limit by making a deposit (minimums are set by the card issuer). Deposits are generally as low as $200-300 and as high as $5000 or more. The deposit is used as collateral, which secures the account and reduces the risk of loss on the card issuer. The credit limit for the card is the amount of the security deposit. This can be increased usually by increasing the amount of the deposit.

With the secured credit card, the user will receive a monthly billing statement as you would with a genuine credit card. At least the minimum payment required must be applied on time monthly to avoid delinquencies and penalties. Paying the card timely results in the issuer reporting to the credit bureaus positively. Failure to do so continues the cycle of negative credit. In the case of default, the issuer is then forced to liquidate the debt by using the security deposit.

Unsecured cards

With unsecured cards, there is not a security deposit made to obtain an unsecured card. Credit limits generally start at $200. With payments made on time monthly, the credit card limit will gradually be increased by the card issuers' discretion. You can expect to pay higher interest rates and annual fees with these cards. They are a very good tool to help establish or re-establish your credit score.

The following should be considered when shopping for a credit card:

Interest rates- the interest or APR( annual percentage rate) there is frequently a higher rate applied to cash advances, than for purchased transactions; it is best to pay the entire balance due each month.
Credit limits – as previously discussed, credit limits are set by consumer with secured cards.
Other fees – other fees to pay close attention to are annual fees, over-the-limit, account set up or programs fees.

Credit cards for bad credit can be very beneficial when trying to establish a credit history or rebuilding credit. It is very important to research cards that are offered for bad credit. Read each review to narrow you searches. These cards are intended to be used as an instrument to reach an excellent credit record. It is sensible to discard them in favor of an improved option after a period of acceptable use.

If you would like more information about credit repair, or reestablishing credit after bankruptcy, feel free to call your Maryland Bankruptcy Attorney, Montgomery County Bankruptcy Attorney or Baltimore Bankruptcy Attorney. The Aylward Law Firm helps individuals repair their credit.

Helpful links to visit:

Credit Report Review

Credit Card

Rewards Credit Card

Robo-Signed Documents Stall Foreclosure Process

Yessica Alvarez, The Aylward Law Firm — Sat, 18 Jun 2011 02:05:00 GMT

There are all types of people, such as lazy employees, students, and teenagers, including lazy lawyers and bank employees. Recent news reports describe details of slowdowns in the foreclosure arena. The recent slowdown in foreclosures is due to faulty documents, and robo-signing. A robo-signer is an employee that signs loan or foreclosure documents without actually reviewing the documents in detail. Robo-signers assume that the documents are accurate; therefore, sign without reviewing. As a consequence, this situation is causing lenders to stop the foreclosure process on thousands of loans. Lenders have temporarily stopped issuing late notices and referring default cases to attorneys for foreclosure.

The result is confusion among borrowers. At the same time, in the court house, judges are angered by confusion in the legal documents filed in foreclosure cases. For example, in some robo-sign cases the allegations are that one person, on behalf of the lender, using a fake name signed hundreds of documents a day without any review. In other cases, there are allegations that attorneys filed documents in foreclosure cases without proper review.

As a result, there has been a decrease in houses in foreclosure. Thousands of late notices have not been sent by lenders; stalling the foreclosure process in many jurisdictions. As reported in The Wall Street Journal, many foreclosures cases already filed in various courts are stuck in limbo, while judges try to sort out documentation. This mess continues to spread delays causing great confusion for homeowners and stalling the foreclosures process in many states. Due to the mess, late bills are stacking up for homeowners looking for loan modifications.

For instance, as reported in The Wall Street Journal, major problems are occurring in Florida. The Stern Law Firm which has taken more than they can bargain for is undergoing investigations by Florida's attorney general, that the firm has made improper filings of documentation. The firm rejects any accusation of wrong doing and plan to demonstrate otherwise. In fact, the previous cases that The Stern Law Firm was engaged in have been transferred to other firms. As mentioned by The Wall Street Journal, one client, Lisa Butterfield, had hopes in finally having her foreclosure situation resolved with a deed-in-lieu of foreclosure. Unfortunately, she continues to pay the properties utilities hoping to reach a deal with GMAC.

On the other hand, lawyers put the blame on lenders for the foreclosure mess. The Federal National Mortgage Association has transferred various cases to different law firms. Judge Blanc, in Florida, has also started holding hearings to relocate the cases. Judge Blanc said cases will be dismissed if no one appears on behalf of the banks. If that occurs banks would have to start from scratch. Some law firms have even suspended their practice because of the unfortunate circumstances.

Meanwhile, bills continue to pile up for homeowners due to the robo-signing of lenders and attorneys. Bankruptcy attorneys anticipate lenders will try to catch up with defaulted mortgages by issuing thousands of late notices at once, resulting in thousands of panicked homeowners searching for answers to potential loss of their homes. This situation could snow-ball into mass foreclosure actions, clogging court systems and bankruptcy courts.

Chapter 13 Bankruptcy can stop a foreclosure action and allow you to keep your home. If you want to learn about your options to stop foreclosure consult your Maryland Bankruptcy Attorney, Baltimore Bankruptcy Attorney or Montgomery County Bankruptcy Attorney.

YOUR OBLIGATIONS UNDER A CHAPTER 13 PLAN

Nolo — Fri, 10 Jun 2011 01:37:00 GMT

Your Obligations Under a Chapter 13 Bankruptcy Plan

Learn which debts you must pay back when you file for
Chapter 13 bankruptcy.

To begin a Chapter 13 bankruptcy, you fill out a packet of forms -- mostly
the same forms as you would use in a Chapter 7 bankruptcy -- listing your
income, property, expenses, and debts. You file these forms and paperwork with a
nearby bankruptcy court. You must also file a workable payment plan proposing
how you plan to handle your debts over the payment plan period.

You must also file your tax return for the previous year, proof that you've
filed your tax returns for the last four years, and a certificate showing that
you've completed credit counseling with an agency approved by the United States
Trustee (go to www.usdoj.gov/ust, then click "Credit
Counseling and Debtor Education" for a list of approved agencies).

Under a Chapter 13 plan, you make payments, usually monthly, to the
bankruptcy trustee, an official appointed by the bankruptcy court to oversee
your case. The trustee in turn pays your creditors and collects a statutory
commission based on the amounts paid out under your plan. You must make every
payment, on time, in order to successfully complete your plan and get a
discharge of your remaining debts.

How Much You'll Have to Pay

Some creditors are entitled to receive 100% of what you owe them, while
others may receive a much smaller percentage (or nothing at all). Typically,
Chapter 13 bankruptcy plans must provide that:

Administrative claims will be paid 100%. These include:

your filing fee ($274)
the trustee's commission (3% to 10% of each monthly payment), and
attorney's fees, if you hire an attorney for help with your Chapter 13
bankruptcy.

Priority debts will be paid 100%. These include:

back alimony and child support
most tax debts (including state and federal income taxes)
wages, salaries, or commissions you owe to employees, and
contributions you owe to an employee benefit fund.

Mortgage defaults will be paid 100% if you want to
keep your house.

Other secured debt defaults will be paid 100% if you
want to keep the property. Missed car payments fall into this category.

Unsecured debts will be paid anywhere from 0% to 100% of what you owe.
The exact amount depends on:

the total value of your nonexempt property
the amount of disposable income you have each month to put toward your
debts, and
how long your plan lasts.

Disposable Income

Your payment plan must commit to paying any leftover disposable income (your
income less certain allowed expenses and payments on secured loans, such as a
mortgage or car loan) towards your unsecured debts, such as credit card debts
and medical bills.

Length of Payment Plan

The length of your payment plan depends on your income level. If your
"current monthly income" (your average income over the six months prior to
filing) exceeds the median monthly income for a household of your size in your
state, your plan must last five years. If your income is less than the median,
you can propose a three-year plan, even if your unsecured creditors cannot be
fully repaid during that time. (To find the median income figures for your
state, go to the United States Trustee's website,
www.usdoj.gov/ust, and click "Means Testing
Information.")

Your "current" monthly income might be out of date. Because
your current monthly income, as calculated above, is an average, it may well be
more than your actual monthly income at the time you file. For instance, if you
were laid off unexpectedly three months before filing, your monthly income when
you file may be quite low -- as compared to your average income over the last
six months, which will have to include three months of your salary.

No Surrender of Property

If you file for Chapter 13 bankruptcy, you don't have to hand over any of
your property; instead, you repay your debts out of your income. In exchange for
getting to keep your property, your plan will have to pay your creditors at
least the value of your nonexempt property. (In
Chapter 7 bankruptcy, you must surrender your
nonexempt property to the trustee, who can sell it and distribute the proceeds
to your creditors. You do get to keep property that is exempt.)

Contact your Montgomery Bankruptcy Attorney or Baltimore Bankruptcy Attorney to find out if you are eligible for Chapter 13.

BANKRUPTCY FOR SMALL BUSINESS

Nolo.com — Fri, 10 Jun 2011 01:08:00 GMT

Assess Your Personal Liability for Business Debts

Many small business owners see their businesses as an extension of
themselves. It can be tough (not to mention stressful and costly) to start a
business, and the daring entrepreneurs who make a go of it often pour their
energy, time, and money into their ventures. Perhaps you started your business
with your personal savings or money from an inheritance, use your spouse’s
paycheck (or your paycheck from a day job) to fund its operations, use your own
car for deliveries or sales calls, or have pledged your own property and used
your own credit to get the money you need to keep the business running.
Practices like these can make it hard to figure out where your business’s
finances end and yours begin.

Because their business and personal finances are so often intertwined, small
business owners often face collection efforts against their business assets and
their personal property. In looking at your options, one of your first tasks
will be to figure out which business debts you are personally liable for and
which are owed only by your business.

If you are personally liable for some or all of your business’s debts, they
can be wiped out by filing for Chapter 7 personal bankruptcy. On the other hand,
if you are not personally liable for any business debts—for example, because
your business is organized as a corporation or LLC and you have not voluntarily
pledged your personal credit—you won’t need to file a Chapter 7 personal
bankruptcy action for your business debts. Although your business might need to
file its own business bankruptcy, that’s a different process (one that we don’t
cover in detail in this book).

To figure out whether you are personally liable for your business’s debts,
you’ll need to start by looking at how your business is structured (as a sole
proprietorship, partnership, corporation, or LLC). Even if you’ve formed a
separate business structure that offers limited liability, you may still be
responsible for its debts if you’ve personally guaranteed them or taken other
actions that might put you on the hook, such as signing a lease or contract in
your personal name rather than your capacity as a corporate officer, or pledging
personal property as collateral for a business debt.

CAUTION: Whether your business is organized as a corporation, LLC,
partnership, or sole proprietorship, you are legally responsible to pay
taxes your business withheld from employee paychecks. The IRS isn’t interested
in any of the details: If you withheld those taxes, you are personally liable if
you don’t pay that money to the government.

Sole Proprietorships and Partnerships

If you are the sole owner of your business, and you haven’t filed paperwork
with your state to incorporate or form an LLC, you are a sole proprietor. The
same is true for some businesses owned by a husband and a wife: If you live in a
community property state (discussed below), you and your spouse can run the
business and still call it a sole proprietorship.

Legally, a sole proprietorship is inseparable from its owner; the business
isn’t a separate entity that can take on its own debt. You are personally liable
for every penny that your business can’t pay. If your business doesn’t have
enough cash or assets to pay its debts, creditors can, and often will, go after
your personal assets.

If you are a sole proprietor considering bankruptcy to get rid of your
business debts, you need to file a personal bankruptcy, not a business
bankruptcy. A personal bankruptcy will help you wipe out most types of debts,
whether or not they are related to your business.

The same is true of general partnerships. In a general partnership, each
partner is personally liable for 100% of the partnership’s debts. If there
aren’t enough business assets to pay those debts, and your partners are broke,
creditors can take your personal assets to pay all of the business’s
debts, not just your pro rata share. But fortunately, filing a personal
bankruptcy will get rid of all of your liability for the partnership’s debts, as
well as any money you owe to your partners.

Corporation or LLC

If your business is organized as a corporation or LLC, you and your business
are separate legal entities. You have limited liability for the business’s
debts. In theory at least, this means you aren’t personally liable for the debts
of your business, so creditors can’t take your house or other personal assets to
pay business debts, even if your business can’t pay them.

Example: Cook’s Nook, Inc., orders kitchen supplies
from 20 wholesalers before the business tanks. Unable to pay its expenses, the
corporation closes its doors. Talia, the corporation’s sole owner, auctions off
the store’s inventory and uses the proceeds to pay Cook’s Nook’s creditors, who
receive a few cents on the dollar. She then dissolves the corporation by filing
dissolution papers with the state. Because the business is a corporation, Talia
is not personally responsible for paying any of Cook’s Nook Inc.’s remaining
debt. Its creditors are simply out of luck.

Unfortunately for small business owners, legal theory is not necessarily
legal reality. There are many ways corporate shareholders or LLC members can
make themselves personally liable for business debts. In fact, most owners of
small corporations and LLCs voluntarily take on personal liability for at least
some business debts.

Below are some common ways an owner of a corporation or an LLC might become
personally liable for the business’s debts. If you are personally liable for
some or all of your business debts, you will have to file a personal bankruptcy,
rather than a business bankruptcy, to rid yourself of these debts.

Signing a Personal Guarantee

Because most suppliers, banks, and landlords know that corporate shareholders
and LLC members aren’t personally liable for business debts, they often won’t
extend credit or lend money to a small corporation or LLC without an owner’s
personal guarantee: a legally binding agreement that the owner will repay the
debt if the business can’t. And many small business owners are willing to sign a
personal guarantee, even though they incorporated or formed an LLC precisely to
limit their liability for obligations relating to the business, because they
can’t get the money otherwise.

Check to see whether you signed a personal guarantee on any of your business
contracts, such as a loan for a business vehicle or business equipment, trade
terms with a supplier, a bank line of credit, or a commercial lease. If so, the
creditor can go after your personal assets for repayment.

Offering Your Property as Collateral

Banks often require the owners of small corporations or LLCs to put up their
home or other real estate as security for a loan. If you secured a business loan
or debt by pledging personal property, such as your house, boat, or car, you are
personally liable for the debt. If your business defaults on the loan, the
lender or creditor can sue you to foreclose on the property (collateral) and use
the proceeds to repay the debt. Filing for Chapter 7 personal bankruptcy will
wipe out your personal liability for this type of loan, but the lender’s lien on
the collateral will survive. This means you’ll eventually have to pay off the
debt if you sell the property; what happens to liens in bankruptcy is covered in
Ch. 8.

Signing a Contract in Your Own Name

You may also have given up your limited liability if you were careless about
signing purchase agreements and service contracts for your business. Sometimes
these agreements display the personal name of the business owner without the
name of the corporation or LLC. If you signed an agreement in your personal name
and not on behalf of the corporation or LLC, you’re personally liable for the
underlying debt, even if it was a simple mistake. If you’re not sure whether you
signed an agreement or loan personally, check the language of the agreement and
the signature block to see whether you signed it in your name or in your
capacity as an owner or officer.

Example: Talia signs a loan contract as Talia
Smith, CEO of Cook’s Nook, Inc., which means only her incorporated business is
liable to repay the loan. But Talia then signs her commercial lease as just
Talia Smith (without any mention of Cook’s Nook, Inc.). Talia will be personally
liable to the landlord if her business can’t pay the rent.

Using Credit Cards or Personal Loans to Fund the Business

If you used credit cards or home equity loans to obtain funds for your
business, you are personally liable for those debts. (Under the terms of most
credit card applications, even those used in the name of a corporation or LLC,
you agree to be personally liable for making all payments.)

Example: Amy and Adam open a coffee roastery and café
offering weekly poetry readings. To get their business started, they file LLC
formation papers with the state and spend $35,000 on a brand new roaster that
can crank out a thousand pounds of coffee per day. Unable to get a small
business loan, they charge the coffee roaster on their personal credit cards,
figuring they will pay it off quickly with income from the business. They also
sign a two-year lease on a corner building in an artsy neighborhood, for which
the landlord requires their personal signatures. They arrange for weekly
deliveries of beans from a nearby wholesaler, with invoices in the name of Cozy
Roast LLC.

Unfortunately, when they open their doors, crowds fail to appear, and Amy and
Adam realize that their original sales forecast was too optimistic by half. Five
months later, still operating in the red, they decide to close down. They are
personally liable for their $35,000 credit card debt for the coffee roaster as
well as the remaining months on their two-year lease (unless the landlord can
find a replacement tenant). Because Amy and Adam didn’t personally sign or
guarantee a contract for the coffee bean deliveries, only the business is liable
to pay the bean invoices (assuming Amy and Adam have properly followed LLC
formalities). Amy and Adam consider filing for Chapter 7 personal bankruptcy to
get rid of their credit card debt and obligation to the landlord.

Tortious Conduct

Generally, owners of corporations and LLCs are not personally liable for
mistakes in management, but they can be held personally liable for injuring
others. An owner who commits a tort (the legal term for an act that harms
another person and causes monetary loss) can be held personally liable.

Example: Brian, the owner of an LLC, speeds through
a residential neighborhood and runs a red light, causing an accident. Damages to
the other vehicles, which were totaled, exceed his $50,000 liability insurance
policy by $40,000 (he hit a Lexus and a Mercedes). Even though Brian was driving
on work-related business, the LLC’s limited liability does not protect Brian
from being sued personally for the automobile damages.

Fraud, Misrepresentation, or Sloppy Record Keeping

If you misrepresented or lied about any facts when you applied for a loan or
credit on behalf of your corporation or LLC, you could be held personally liable
for the debt. Likewise, if you failed to maintain a formal legal separation
between your business and your personal financial affairs, creditors could try
to hold you personally responsible for the business’s debts under a theory known
as “piercing the corporate veil.” This happens when a court finds that your
corporation or LLC is really just a sham and you are personally operating the
business as if the corporation or LLC didn’t exist. In this situation, a court
may decide that you aren’t entitled to the limited liability that your business
structure would ordinarily provide.

One way creditors try to pierce the corporate veil is by showing that you
didn’t observe the legal formalities imposed on corporations and LLCs. For
instance, you may have made important corporate or LLC decisions without
recording them in minutes of a meeting. Or, you may have paid business bills
from a personal checking or credit card account or paid personal bills from your
business bank account. Even corporations or LLCs owned by a single individual or
a married couple have to obey the rules and formalities imposed on these
business structures; otherwise, they risk losing their limited liability
protection.

TIP: List
all business debts in your personal bankruptcy filing, just in case your “veil”
is pieced. Even if you don’t think you are personally liable for a
corporate or LLC debt, you should list all business debts when you file
for Chapter 7 personal bankruptcy. Business creditors might try to pierce your
corporate veil and sue you personally for those debts. But if you list your
business creditors in your personal Chapter 7 paperwork, any potential personal
liability for the business debt will be extinguished in the Chapter 7 personal
bankruptcy—even though the business debt will remain on the corporation or LLC’s
books. If you’re concerned about personal liability for your corporation’s or
LLC’s debts, you should also talk to a lawyer to make sure you’re doing all you
can to protect yourself. At a minimum, when you list these business debts in
your bankruptcy forms, check the “disputed” column (see Ch. 9), so you won’t be
admitting liability down the road if any of these debts survive your
bankruptcy.
Contact your Montgomery County Bankruptcy Attorney or Baltimore Bankruptcy Attorney to discuss your options if you own a business and are facing overwhelming debt.
Reprinted with permission, Nolo.com

How Much Does It Cost to File Bankruptcy?

Sun, 17 Oct 2010 16:29:00 GMT

Most consumers want to know how much it costs to file bankruptcy when considering whether a bankruptcy filing is an option for them. The average cost for a chapter 7 petition in 2007 to 2008 was $1399.00, (according to a study published by the ABI Law Review). Costs have risen due to the new requirements passed by Congress in 2005. The new law requires that the consumer produce the following:

last 6 months pay stubs
last two years tax returns
obtain credit counseling prior to filing bankruptcy

    Attorneys under the new law must analyze income during prior 6 months before filing bankruptcy under the means test, to determine if the consumer is eligible for chapter 7 or chapter 13, produce copies of tax returns and pay stubs for the chapter 7 Trustee, along with other requirements.  Attorneys are also required to do due diligence concering the consumer's debts, most attorneys will require that the consumer obtain a credit report, so that all debt is listed on the bankruptcy petition.

    Likewise, cost for chapter 13 has risen. According to the same study the median cost for consumers was $4,077 in 2007 and 2008, from about $2900 in 2003. Costs to consumers included attorney's fees, filing fees, credit counseling and debtor education fees.

    In 2010, a bankruptcy lawyer's chapter 7 fees vary but should be in the range of $1,000 to $2,000, depending on the amount of debt and the complexity of the case. Fees for chapter 13 are typically a flat fee of $4500 for the entire case, most bankruptcy attorneys will require $2400 at the beginning of the case with the balance of the fees paid through the chapter 13 plan. Most bankruptcy lawyers will give you a free initial consultation. You can keep the fees down by being well organized and well prepared.

    Make sure you hire an experienced attorney, someone who knows all the laws requirements and the local Trustee's and their requirements. Hiring a capable attorney will ensure that your case goes smoothly. Call your Baltimore Bankruptcy Attorney or Montgomery County Bankruptcy Attorney for a free consultation, to discuss your case.

    Study results were published in the Consumer Bankruptcy News, by LRP Publications in its October 7, 2010 issue.