Free Legal Consumer Guide Series

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1 Free Legal Consumer Guide Series Brought To You By Meeting All Your Legal Needs For 50 Years

2 2 What You Need To Know About Bankruptcy HOW TO USE THIS GUIDE If you read this guide, you will discover what you need to know about your legal issue, and learn about your options. Then you will be armed with information so you can make an informed, intelligent decision about what to do. What you should do now: Read this Free Legal Consumer Guide. You should be informed before you talk to an attorney. Call an attorney. At least get an initial consultation to discuss the unique facts of your situation. The best solutions come from applying the law to the facts of your case. No book can do that. Most attorneys offer a 1 hour consultation to discuss your case. You have many good choices in Southern Maryland. Of course, we hope you choose us! We want to be your family s attorney. Contact us today. Disclaimer: (1) Using this guide will not make you a lawyer, and is no substitute for hiring one. Do not represent yourself in any serious legal matter. (2) This guide gives general information and advice. Effective legal advice requires understanding the unique facts of your situation, and applying the law to those facts. (3) Using this guide does not create an attorney-client relationship with our firm. The only way to do that is by meeting with us. (4) The legal advice and information in this guide applies only to Maryland.

3 3 What You Need To Know About Bankruptcy AUTHOR PAGE David Gormley is a partner at Andrews, Bongar, Gormley & Clagett. He has been practicing law since 1992, & concentrates his practice in bankruptcy and real estate. See his full bio at /about-us/dave-gormley David Hebb has been practicing law since 2006 here at our firm. He concentrates his practice in bankruptcy and civil litigation. See his full biography at /about-us/david-hebb is one of the oldest and largest law firms in Southern Maryland serving clients for 50 years. We have more attorneys and a larger staff than other local law firms. That means we can help you and your family in a wider variety of legal matters. Each attorney concentrates in a few key areas so you get the expertise you need, and the personal service you want.

4 4 What You Need To Know About Bankruptcy TABLE OF CONTENTS Is Bankruptcy A Good Option? 5 Should You file bankruptcy?.6 3 Reasons to File Bankruptcy 7 The Result of Filing Bankruptcy..9 Dischargeable Debts.10 The Automatic Stay 11 Stopping Foreclosure 12 Chapter 7 Explained..14 Chapter 13 Explained 15 The 8 Steps in Bankruptcy.19 Rebuilding Your Credit.22 How An Attorney Can Help..24 Why It Is Better To File Sooner Rather Than Later 26 How We Make It Easy On You.31 Copyright 2013

5 5 What You Need To Know About Bankruptcy IS BANKRUPTCY A GOOD OPTION FOR YOUR SITUATION? Are you struggling with burdensome debts? Most of our community is overloaded with debts. Thanks to the poor economy and cutbacks in government spending, many in our community are struggling. When your income changes, because of forces beyond your control, you can suddenly find yourself in a trap. You didn t create this problem, but you are stuck in it. So what are your options? What should you do to get through this crisis and make it safely to the other side? You should always know what your options are. Until you know your options, you cannot pick the right path for you and your family. Once you know your options, you can make an informed, intelligent decision about what to do now. If you are struggling with debts, bankruptcy is one of your options. Bankruptcy can give instant relief: It will STOP foreclosures. It will STOP wage garnishments. It will STOP most civil lawsuits. It will wipe out your burdensome debts. It will wipe the slate clean so you can get a fresh start!

6 6 What You Need To Know About Bankruptcy Bankruptcy may be exactly what you need. But bankruptcy is not the right option in every situation. How can you know whether bankruptcy is the right option for you? You have to explore that option with someone who can tell you if it fits your particular situation? At least find out what would happen during a bankruptcy so you can make an informed, intelligent decision about it. SHOULD YOU FILE FOR BANKRUPTCY? We would love to give you a simple, direct answer. But there is no magic number or simple chart you can use to answer this question. In order to honestly tell you if bankruptcy is a good option for you, we have to do a detailed analysis of your actual debts, income, and assets. Bankruptcy is not a one size fits all system. Any reputable bankruptcy lawyer will start with this detailed, personal analysis of your unique situation. Do you have enough debt? Frankly, if you are even asking the question, then chances are you do have enough debt to file for bankruptcy. If your debts are not a burden, you would not be asking about bankruptcy and you would not be reading this guide.

7 7 What You Need To Know About Bankruptcy However, that is only the first question. The more important question is whether or not bankruptcy is a good option for you? That can only be answered by taking a good, hard look at all of your finances, and assessing your other options. If you think you may be eligible for bankruptcy, you should call an attorney for a consultation where he or she can take a detailed look at your financial situation. If you are not sure, you can always find out with a free consultation. THREE SIGNS BANKRUPTCY MAY BE A GOOD OPTION: (1) You cannot pay the mortgage, or you struggle to pay it but your other debts are increasing. Being trapped in a mortgage they cannot afford is the number one reason people are filing bankruptcy these days. When the housing market collapsed, most people were left upside down (you owe more than your house is worth) and their mortgage rates rose. It is almost impossible to refinance in that situation, and most people cannot sell their house for enough to pay off the mortgage. Therefore many people cannot pay the mortgage, or struggle to do so. And they have no way to get out of this trap. If this describes you, a bankruptcy may help you escape that burdensome mortgage payment.

8 8 What You Need To Know About Bankruptcy Or maybe a short sale or loan modification is right for you? It depends on your unique situation. We can advise you of all of your options during a consultation. (2) You have a lot of debt and you struggle to make the payments every month. If you have high credit card debt, or medical bills, or other unsecured debt, and the monthly payments are eating up too much of your paycheck, you may be able to get out from that burdensome situation in bankruptcy. Chances are your credit is already bad. If so, a bankruptcy can wipe the slate clean and put you on a path to recovery. (3) You recently had a major life change, such as illness, divorce, a layoff or furlough, or a death in the family. These situations can completely change your financial situation. In this economy, it can be hard to make ends meet when you lose any amount of income. If that happens, do not wait until you start drowning. Find out if bankruptcy is a good option sooner rather than later. Don t be scared of bankruptcy! Bankruptcy is a valid legal tool that you should use when you have the need. The law has always provided a way to give people a fresh start from oppressive debts. Did you know that Bankruptcy Courts are specifically called for in the US Constitution? Even the founding fathers knew bankruptcy is sometimes necessary.

9 9 What You Need To Know About Bankruptcy However, sometimes bankruptcy is not a good option. We can tell you if bankruptcy does not fit your situation, and we will help explain your other options. Maybe you qualify for a loan modification? Maybe you can do a short sale? Maybe you qualify for one of the government programs designed to help families struggling to stay afloat in uncertain economic times? We can guide you through your options and help you pick the best one for your situation. THE RESULTS OF FILING FOR BANKRUPTCY The end result of a bankruptcy is to wipe out burdensome debts and give you a fresh start. This is accomplished through the discharge you receive at the end of your case. The discharge releases you from personal liability on your debts, and prevents creditors from taking action to collect the debts. Getting that discharge is the goal of every bankruptcy case. Even before getting the discharge, just filing the bankruptcy has immediate effects. It will stop most civil actions against you in any Court. That includes foreclosures, garnishments, debt collection lawsuits, landlord & tenant actions, and more. All your attorney has to do is provide the Court notice of your bankruptcy filing.

10 10 What You Need To Know About Bankruptcy It is true that your credit will be affected after filing a bankruptcy but probably not as bad as you think. The bankruptcy can only stay on your credit record for 10 years. After that, it is removed and nobody will even see it happened. Creditors will even lend you money after a bankruptcy. They will charge you a higher interest rate, but you may be surprised at how easy it is to get a loan after filing for bankruptcy. See the details about re-establishing your credit later in this guide. NOT EVERY DEBT IS DISCHARGEABLE (but most are!) Bankruptcy cannot cover every debt, but it does cover most debts likely to be burdensome to you. Here are some debts that you cannot discharge: Child support or alimony Tax debts Student loans Most debts are dischargeable. Examples of debts you can discharge include: Medical bills Mortgage debt Credit cards & Signature loans Monthly bills for services you are behind on Any unsecured loans (which means there is no collateral for the loan)

11 11 What You Need To Know About Bankruptcy THE AUTOMATIC STAY At the moment you file for bankruptcy, most other legal cases against you are stayed (which is legal lingo for temporarily stopped ) until the bankruptcy is over, the debts are discharged, or the stay is lifted by the Bankruptcy Court. To stay a case means to put it on indefinite hold. The case does not go away automatically. It just sits on hold. If the case involves a debt that will be discharged in the bankruptcy, it will indeed go away when you get your discharge. The case will be dismissed. But many other cases can be stayed like foreclosures, landlord & tenant actions, etc. If the case does not involve an asset involved in your bankruptcy, the other attorney can ask the Bankruptcy Court to lift the stay meaning to allow the case to proceed. They have to file that motion with the Court, and wait for the Court to act before they can proceed. So although you can buy some time by filing for bankruptcy, it is not a permanent answer to all your legal troubles just those debts you can discharge in the bankruptcy case.

12 12 What You Need To Know About Bankruptcy HOW DO I STOP FORECLOSURE ON MY HOUSE? See the section on the Automatic Stay above. That includes foreclosures. Your foreclosure case will be stayed just like any other civil action. If you are close to foreclosure, your mortgage payment is likely to be a debt that is handled by the bankruptcy case. Usually, your arrears (the amount you owe at the time of bankruptcy) will be paid through the bankruptcy plan, while you will have to keep making your regular payments every month. That enables you to keep the house. However, you must make your regular mortgage payment after filing the bankruptcy, and will make plan payments within 30 days. You cannot just stop paying your mortgage if you want to save the house. An attorney can tell you how much the payments will be, and when they have to start. Special note for foreclosures: Do not wait until the last minute to see an attorney. Under the new law, it is harder to run to the Courthouse and file to stop a foreclosure. It may take more time. You will always know a foreclosure is coming. They have to give you notice. If you get notice of a foreclosure, or even a warning letter, you should consult an attorney at that time. Do not wait.

13 13 What You Need To Know About Bankruptcy FEDERAL JUDGES & BANKRUPTCY TRUSTEES Bankruptcy is federal law. That is why it can stop all state and federal lawsuits. All bankruptcy cases are filed in the U.S. Bankruptcy Court and are controlled by the US Bankruptcy Judges. They have the ultimate say in your bankruptcy case. However, most of what these Judges do is administrative. The system uses Trustees to oversee bankruptcy cases. Most of your interaction will likely be with the Trustee instead of the Judge. CHAPTER WHAT? THE DIFFERENT TYPES OF BANKRUPTCY There are several different types of bankruptcy. They are named after the chapter of the bankruptcy statute that discusses them. That is why they are called Chapter 7 or Chapter 13. That makes little sense, but lawyers and politicians are not all that creative. Individuals will usually be concerned with Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. There are other types of bankruptcy that may be used as well, and your attorney can discuss them if they apply to you.

14 14 What You Need To Know About Bankruptcy CHAPTER 7 is called liquidation. It is usually called for when you have no assets or income from which to pay debtors. The Trustee will take control of your non-exempt assets, sell them if necessary, and pay off creditors if there is any money. However, that sounds worse than it is. You can retain certain specific property, called exempt assets. Things like your house and your car can be exempt assets (depending on how much equity you have in them). They can be shielded from the Trustee as long as you continue to pay for them. Don t worry. You do not automatically become homeless or lose your car if you file for bankruptcy. Many of your assets can be exempt depending on their value. Items of smaller value may be exempt just because the Trustee doesn t want them. The Trustee is not going to conduct a yard sale of your assets just to get a couple hundred bucks. They are looking for big ticket items that actually have resale value. The bankruptcy trustee does not try seize everything you own. Most Chapter 7 cases are called non-asset cases, because all the assets are exempt. In that case, there is no sale and the debtor just gets the discharge at the end of the case.

15 15 What You Need To Know About Bankruptcy Exempt vs. non-exempt assets is a long list and can change. This is a great question to ask an attorney in a consultation. If you qualify for Chapter 7, you will probably find that most of your possessions remain in your control. CHAPTER 13 is a repayment plan. It is best for someone with regular income over the means test, and who may want to keep a valuable asset that would otherwise be sold in Chapter 7 like your house. The means test involves looking at income and expenses over a certain time period and running some specific guidelines. This is complicated, and the formula is based on the bankruptcy court regulations. A bankruptcy attorney can figure this out for you. In Chapter 13, you will put together a repayment plan where you will repay your debtors over time, usually 3-5 years. Your attorney will create the repayment plan. That plan will be filed with the Bankruptcy Court. The Court must either accept it or reject it. If they accept it (which is the norm), you will make your regular payments to the Trustee, who will pay your creditors for you.

16 16 What You Need To Know About Bankruptcy Not all creditors will be repaid 100% of the debt owed. Some will receive less - maybe a lot less - depending on the status of the debt (secured, unsecured, priority) Your attorney can explain the various types of debt and whether it will be repaid. The list is too long for this guide. Generally speaking, secured debts are debts where they take the object if you don t pay, like your house or your car. Those debts get paid at 100%, or you lose the object securing the debt. Unsecured debts are like credit cards, where the only guarantee was your signature on the application. They are paid last. Certain debts, like taxes and child support, are priority debts and the Trustee will pay them first and in full. In Chapter 13, you are protected from lawsuits or garnishments due to the debt for the entire time your plan is pending. Once the payments are fully made, you will receive your discharge and will be relieved of liability for all your debts, no matter how little the creditor received during the course of the plan.

17 17 What You Need To Know About Bankruptcy STEPS TO TAKE BEFORE FILING BANKRUPTCY There are two preliminary steps you must take. First, hire an attorney. You probably cannot do this yourself. Even if it is someone other than us, you should hire an attorney to file your bankruptcy. It is that complicated. Before the Bankruptcy Reform Act of 2005, if you had no assets whatsoever you could file your own Chapter 7 case. That is no longer advisable. The 2005 law makes bankruptcy a complex process far more involved than just filling out forms. Theoretically, you can still do it yourself, but you will have to be very, very diligent. We do not advise it. Second, gather documents. There is a lot we need to know about your debts, income, expenses, etc. Therefore, you will have to do some homework. Here is a list of documents you need to gather and things we need to know. 1. All current sources of income (including paycheck, pension, social security, child support, alimony, etc). 2. Documentation of all recent major financial transactions (like the sale of a house or car).

18 18 What You Need To Know About Bankruptcy 3. Itemization of your monthly expenses. 4. All of your debts. (Important! If you do not include a debt during the administration of your case, that debt may not be discharged and you will remain liable for it. Be sure you include all debts you owe when compiling this list.) 5. Two years of tax returns. 6. Deeds and titles to all real and personal property (like the deed to your house, the title to your car, etc.). 7. Certificate of credit counseling (when you take the course). You will have to complete an information packet, including a detailed financial statement. The financial statement lists all of your debts, assets and expenses. This packet will be used as the raw data for drafting your bankruptcy petition. Do you need to get all of this in order before seeing an attorney? No! You can consult with an attorney at any time, and we encourage you to do so sooner rather than later. You need to know your options, and you should plan ahead in case bankruptcy is the right option for you. You should at least find out whether you are eligible for chapter 7 or chapter 13, and how to handle your debts now. However, you will need all of the items in this list before you can actually file for the bankruptcy. You can get more details after meeting with an attorney for a free consultation.

19 19 What You Need To Know About Bankruptcy THE PROCESS OF BANKRUPTCY IN 8 STEPS After you meet with the attorney and go through the means test, you will know if Chapter 7 or Chapter 13 is right for you. Then we will give you the financial packet, and you will have to bring us the required documents mentioned above. Here are the next steps: Step 1: You will have to take a credit counseling class, which can be done online or over the phone. We will provide you the list of approved court counselors and we can recommend a few that other clients have liked. We can walk you through this step. Step 2: Your Petition will be drafted which includes all of your information and is designed to show your current financial situation. A Petition is the name of the formal document you file with the Court to start the bankruptcy process. Step 3: Filing the Petition. Once the petition is drafted you will need come in to review it and sign it. The petition will then be electronically filed with the bankruptcy court. Once the case is filed you get a case number, and the automatic stay goes into effect.

20 20 What You Need To Know About Bankruptcy If you file a Chapter 13 bankruptcy, a repayment plan will be filed along with the Petition. Your attorney will create the plan, but in general, the plan will look at your net monthly income, subtract reasonable expenses (which are governed by the new bankruptcy statute) and see if there is income left over. If there is, that amount will go to pay your creditors. Step 4: Before completing the bankruptcy process, you must take a financial management course. This is in addition to the consumer credit counseling class you already took. An attorney can help you set up this second class as well. Step 5: After you file your bankruptcy petition, the Trustee will hold a meeting of creditors. This is also sometimes called a 341 meeting because that is the section of the code which governs it. Before the meeting you will need to provide the trustee with pay stubs, tax returns and bank statements. At the meeting you will need to produce a photo id (drivers license) and proof of your social security number. You will have to appear at the meeting and the Trustee will interview you. Your attorney will be present for this meeting. Your creditors are allowed to appear and ask questions, but they do not usually show up.

21 21 What You Need To Know About Bankruptcy The Trustee and the creditors will be trying to make sure you have disclosed all of your assets. The Trustee will ask you questions about your assets and debts, to confirm the information in your petition is true. Step 6: Waiting. After the meeting, the Trustee and the creditors have 60 days to object to your right to a discharge. This does not usually happen, as long as your petition is accurate. Your attorney will handle it if it does happen. If there is a dispute over the plan the case may have to go to a confirmation hearing in front of a bankruptcy judge. Step 7: Confirmation hearing (for Chapter 13 cases only). If you file Chapter 13, a Confirmation Hearing will be held to determine if the repayment plan filed with your petition will be confirmed or denied. If your plan is confirmed, you will pay according to the plan and any debts left over when the plan is finally paid will be discharged. You get your discharge after you complete the plan payments. If the plan is denied, you will get a chance to amend the plan. If your plan cannot be confirmed, it will be dismissed and you will back to square one as if you never filed.

22 22 What You Need To Know About Bankruptcy Step 8: Discharge. If you filed chapter 13, you get your discharge when your plan payments are concluded. This could take 3-5 years, depending on how long your repayment plan lasts. If you file Chapter 7, the Bankruptcy Court will grant your discharge as long as nobody objects after your meeting of creditors, or if you get the Judge to approve it even if someone objects. This will usually happen 30 days after the creditor s deadline to file objections, which is usually 4 months or so from the date you file the bankruptcy (as long as there are no assets for the Trustee to sell, which would obviously delay the proceedings). BANKRUPTCY, YOUR CREDIT, AND TO REBUILD IT Filing for bankruptcy will probably not affect your credit as much as you think. If you are in a situation where bankruptcy is an option, your credit is probably bad already. All credit reports will show your bankruptcy for a period of 10 years. However, if you pay your bills on time for 18 months to 2 years, you will re-establish your credit rating and people will loan you money again. They may charge you a slightly higher interest rate, but they will loan you the money.

23 23 What You Need To Know About Bankruptcy Good ways to re-establish your credit after bankruptcy are: (1) Pay all your bills on time. Paying all your bills religiously for at least 2 years after your discharge is the number one way to re-establish your credit. If you get a car loan, make sure you pay it on time, and in full, each and every month. Car loans are the number one type of debt that will affect your credit rating after filing bankruptcy. (2) Get a job if you did not have one before. Even a part time job will look good. (3) Get one or two credit cards, and be absolutely sure to pay them off every month. Many people who file for bankruptcy are amazed that they receive pre-approved credit cards in the mail after they get their discharge. That is because you cannot file Chapter 7 bankruptcy again for 8 years. They figure they will make money on you in the meantime. Resist the urge to open these extra accounts. Stick with one or two. (4) You should make sure none of your checks bounce during this time. Be extra sure you have the money in the bank before writing the check. All of these actions will show a future creditor that you can handle your finances, and they will usually be more willing to extend you credit.

24 24 What You Need To Know About Bankruptcy HOW AN ATTORNEY CAN HELP You can quickly see that an Attorney is probably necessary to file a bankruptcy. It is a very complicated system these days. We cannot advise anyone to handle their own bankruptcy case. There are too many potholes and pitfalls to try this without an attorney. The petition must be complete and done in a proper manner. Then it must be filed electronically, and in a specific format. If you are doing a chapter 13, you must propose a repayment plan. Only an attorney with experience before the bankruptcy court can possibly know what plan will be acceptable. Assuming they accept your petition, you have that meeting of creditors where the Trustee (and maybe attorneys from your creditors) will grill you. After that, you may be in front of a federal judge for a confirmation hearing. It is easy to see how complicated all of this is. An attorney is almost a mandatory requirement if you are considering filing bankruptcy.

25 25 What You Need To Know About Bankruptcy There are a limited number of attorneys who handle bankruptcy cases. We have been handling bankruptcy cases for 20 years. We know what we are doing. We charge a fair and reasonable price in line with other competent attorneys. Beware the super cheap bankruptcy options you may see advertised! You will not get much service from an actual attorney, and your case may get hopelessly screwed up. We have been called on to rescue a number of bankruptcy cases that some cheap bankruptcy mill screwed up. That just costs you more grief, more stress, and more money! Bankruptcy consultations are always free at Andrews, Bongar, Gormley & Clagett. They are also required because we cannot properly advise you on the best course of action unless we talk to you about your personal situation. You should always know your options. Reading this guide can give you some idea of your options, but you will never really know your options unless you have an inperson consultation with an attorney to discuss your own unique financial situation.

26 26 What You Need To Know About Bankruptcy IT IS BETTER TO FILE SOONER RATHER THAN LATER What about waiting? Is that an option? Why take action now? What many people do not know is that IF you are going to have to file for bankruptcy, it is much, much better to do it sooner rather than later. People who hold on and keep struggling often make some major, irrevocable mistakes (detailed in the following pages) they could have avoided by filing bankruptcy sooner. Holding on and barely making it is like treading water when your boat sinks. You stay afloat, but barely. And you will never make it safely to shore. The longer you tread water without moving towards shore, the more tired you become, and the more likely it is that you will drown. First of all, it is never too early to look at your options. How can you decide whether you should try a debt consolidation plan, or a mortgage modification, or a short sale, unless you compare it to your bankruptcy options? Bankruptcy is sort of the ultimate option. It will wipe out those debts once and for all. You need to know if you can do it, and what will happen, before you can make an intelligent, informed decision about your other options.

27 27 What You Need To Know About Bankruptcy We are big fans of knowing your options. Only then you can make the best decision for you and your family. Frankly, you owe it to the ones affected by this situation to at least know what your options are, and maybe do some planning in case you cannot stay afloat. NOT NEEDING BANKRUPTCY IS THE BEST OPTION Of course, it is much better not to file bankruptcy at all. If you do not need a bankruptcy, we would never encourage it. We always provide our clients with every option. But the fact is that many people do need to file for bankruptcy, and they are only hurting themselves by delaying the inevitable. Bankruptcy is a tool like any other. It is only useful when you actually need to accomplish a specific goal. You don t need a pipe wrench unless you have a leaky pipe. Needless to say, people hate to even think about bankruptcy. That is why people delay it. Inevitably, clients tell us they wish they had come to see us a year or more ago. Better to talk to us now, and find out you should try a debt restructuring or loan modification, than to come to us after you have cashed in the last of the retirement savings from your IRA, 401k, or Thrift Savings Plan.

28 28 What You Need To Know About Bankruptcy There are five main reasons to file bankruptcy sooner rather than later. Here they are: (1) Make it easier to save your home: It is a lot easier to save your house in a bankruptcy when you are only six months behind on your mortgage, than it is when you are 2 years behind. You have to pay back those arrears in your Chapter 13 plan. If you wait too long, and your arrears build up too high, it may become too much to repay, and impossible to save your home. (2) Don t throw money down the drain: If you are going to file a bankruptcy anyway, every dollar you send to your creditors now is a dollar thrown away forever. If you have to file bankruptcy, any payments made to creditors should be made through the chapter 13 plan, so it counts in paying off the debt under the plan and getting you closer to the day you get that bankruptcy discharge. Otherwise, it is money down the drain. The repayment plan will not take into consideration any payments you made to reduce the debt before you filed the bankruptcy petition.

29 29 What You Need To Know About Bankruptcy (3) You can save your retirement plans in a bankruptcy. Most retirement plans are not considered in your bankruptcy, and cannot be touched by the bankruptcy trustee. You can shield them so they are there for you when you get your discharge. Don t spend them now trying to stay afloat, only to file bankruptcy anyway. If that happens, the retirement plan money is lost forever. They won t give it back to you! (4) Bankruptcy is often a three to five year process: If you have to file a Chapter 13 bankruptcy, you will be in a three or five year repayment plan (usually five years). The sooner that plan starts the sooner it ends. They bankruptcy trustee will put you on a strict budget for either three or five years (depending on your income) after the plan is approved. The bankruptcy trustee will use any income over and above your approved monthly budget to pay back your creditors. At the end of the plan, any remaining debts will be discharged. Your creditors will only get paid the money they get during the five years the plan is in place, and you will get a fresh start in your finances once that plan is completed.

30 30 What You Need To Know About Bankruptcy Obviously, the sooner you start that five year clock ticking the better. You will only get five years older and five years closer to retirement while that plan is in place. The longer you wait, the worse it is. So if you do have to file for bankruptcy, and look forward to life without your debts, it is much, much better to do it sooner rather than later. (5) Rebuild your credit sooner: Another good reason to file bankruptcy sooner rather than later is to get on track to rebuild your credit. With only two or three years of paying your bills on time, your credit will be re-established and you can borrow money again. You may pay a slightly higher interest rate than someone who never filed a bankruptcy, but you will get a loan that you can afford. Before that can happen, you have to get that bankruptcy behind you first. So the sooner you get your bankruptcy filed and obtain your discharge, the sooner you can start rebuilding your credit. FIGURE OUT YOUR OPTIONS TODAY If you want to know if you are eligible to file a bankruptcy, and whether or not it is right for you, we offer a free consultation. If you want a free consultation with one of our bankruptcy attorneys, please contact us any time. We can do phone consultations or in office consultations. We will make it convenient for you.

31 31 What You Need To Know About Bankruptcy WE WILL MAKE THIS EASY ON YOU If you have been delaying a bankruptcy because of the work involved in obtaining documents and finishing the petition, we offer personal help from our bankruptcy staff to assist you in getting it all together so you can file your bankruptcy faster, with less chance of problems down the line. Just call and schedule an appointment with one of the members of our Bankruptcy Team. They will go over your case and help you do the last bit of work to finish your petition so we are ready to file it. If you are in financial trouble, or think you may be heading that way, you should at least know what your options are. You should find out whether or not bankruptcy is a good option for you. If you want to find out, call us today. ADDITIONAL RESOURCES:

32 32 What You Need To Know About Bankruptcy LOCAL RESOURCES Southern Maryland has a lot of great non-profit organizations that can help you and your family if you are facing a need. These are a few we know, trust, and highly recommend. Tri-County Community Action Committee: Housing preservation, energy assistance, HUD counseling, etc Legal Aid Bureau: legal services without cost United Way of Charles County: has the definitive list of local Human Services Agencies right on their website. Lifestyles of Maryland: They pretty much do it all, or can refer you to someone who can. Housing, food, medical, financial, employment, transportation, etc College of Southern Maryland: A lot more than classes! They can refer you to services, provide education for business and employment, and give health & wellness classes for all ages

33 33 What You Need To Know About Bankruptcy THE FREE LEGAL CONSUMER GUIDE SERIES at Everything You Need To Know About Car Accident Cases What You Need to Know About Bankruptcy and Foreclosure What You Need to Know About Divorce and Child Custody What You Need to Know About Workers Compensation What You Need to Know About DUI & DWI How To Handle A Traffic Ticket Why You Need A Will & What To Do About It How to Handle Your Own Small Claims Case GET MORE FREE LEGAL ADVICE Sign up for our free monthly newsletter, with more legal advice, tips on how to keep your family safe, and our insiders commentary on newsworthy legal events like sensational crimes and new laws. Find the sign up form on our home page. You can also see past examples of our newsletters.