• Bankruptcy And Wage Garnishment

    Bankruptcy And Wage Garnishment featured imageFinancial situations are unique, complicated, and can be overwhelming. Sometimes, if your debts go unpaid long enough, a creditor can garnish your wages. But what is wage garnishment? And can you still file for bankruptcy after your wages have been garnished?

    The short answer is that many people file Chapter 7 and Chapter 13 Bankruptcy to either stop or prevent a wage garnishment.

    Wage Garnishment Defined

    A creditor can sue you over unpaid debt. Typically, they’d need to obtain a money judgment against you, which is a court-issued document stating the creditor won the lawsuit. A money judgment is entered if you don’t respond to the initial suit, which is known as a default judgment, or after a trial and the Court rules in favor of the creditor. In Maryland, you have 10 days to pay the judgment. If you don’t pay the judgment, many creditors will then garnish 25% of your income from your wages, as well as attach your bank account or put a lien against your property.

    Wage garnishment is when a creditor files a request to have your employer withhold or deduct part of your wages to begin paying back your debt. The types of debt that a creditor can collect through wage garnishment include:

    • Credit card debt
    • Personal loans
    • Taxes
    • Medical bills

    Note – While you are allowed to oppose the garnishment, generally speaking, there is no defense in State Court of I cannot afford the garnishment. Also, this wage garnishment is not the same as attachment of your wages for unpaid child support or alimony.

    Bankruptcy and Wage Garnishment

    Filing for Chapter 7 or 13 Bankruptcy will stop your wage garnishment (except for child support or alimony). In addition, upon filing for bankruptcy, a court-ordered automatic stay stops the majority of civil lawsuits brought against you. It also eliminates most collection actions against your property.

    What is an Automatic Stay?
    An automatic stay briefly prevents collection agencies, creditors, government entities, and others from collecting on the money you owe them.

    The automatic stay will typically end at the close of the bankruptcy case, statutory code provision that automatically terminates the stay, or an order terminating the stay.

    A creditor may request that the bankruptcy court lift the automatic stay, but this typically only happens if:

    • The creditor has collateral-secured debt (e.g., a house or car)
    • The creditor could lose money if they’re forced to wait until the completion of the case
    • To allow a creditor to continue with a divorce or other domestic proceeding

    Chapter 7, Chapter 13, and Wage Garnishment

    Chapter 7 Bankruptcy
    A stop will be put on your wage garnishment when you file for Chapter 7 Bankruptcy (otherwise known as wage attachment). If you successful complete the Chapter 7 and a discharge is entered against that debt, the creditor will not be able to garnish your wages anymore.

    Note – Child support, certain taxes, and student loan debts aren’t dischargeable through Chapter 7 Bankruptcy. You are also required to continue to pay your child support and alimony while in bankruptcy.

    Chapter 13 Bankruptcy
    When filing for Chapter 13 Bankruptcy, you’ll pay your creditors, including the ones garnishing your wages, through payment plans. At the end of the Chapter 13 case, the debt should be discharged and the creditor will not be able to have your employer withholding income to satisfy the debt.

    Note – As long as you’re complying with your Chapter 13 three-to-five-year repayment plan, your garnishments will stop. After that, however, the court can decree that the repayment plan be fulfilled by garnishing wages.

    Wage Garnishment and How to File for Bankruptcy

    At the Mummert Law Firm, we assist debtors in stopping wage garnishments. We will meet with you, discuss your financial circumstances, and propose the best course of action, inside and outside of bankruptcy.

    If you elect to file bankruptcy, we will assist you in obtaining the information to prepare the Bankruptcy Petition, Schedules, and Statements (approximately a 50+ page documents). Once we file bankruptcy, we will notify the Court that entered the judgment and garnishment, the creditor seeking the garnishment, and your employer that an Automatic Stay has been entered on your behalf. Further, we will notify everyone that if they continue to collect the debt, that person could be subject to Contempt of Court for violating the Automatic Stay.

    Finances are complicated, and you could be facing crushing debt and wage garnishment. Creditors can seek to collect on credit card debt, personal loans, taxes, and medical bills through your wages. But filing for bankruptcy can end your wage garnishment. However, don’t go it alone when it comes to finding financial relief. If you are facing wage garnishment, Mummert Law can help! We are available for a consultation, at which time we’ll sit down together, evaluate your position, and determine the best way to proceed. So make your appointment with Mummert Law today!

  • Medical Debt in Bankruptcy

    Medical Debt in Bankruptcy featured imageOne of the foremost reasons individuals file for bankruptcy is because of medical debt. Why? Because planning your medical future can be difficult, if not impossible. Unexpected illnesses or other medical emergencies are a fact of life. Although we are grateful when we survive an emergency, we are often shocked by how much the medical issue costs.

    Medical providers are quick to pursue their debt. They usually only send one invoice and then refer you to a debt collector. The debt collector will then send letters as well as call you, early and often. Suppose you do not agree to their terms. In that case, they will put derogatory information on your credit report and possibly refer you to an attorney to file a lawsuit.

    One way to bring relief is to consider filing bankruptcy to eliminate or reduce your medical bills.

    About Medical Debt

    Medical debt is money owed to doctors, hospitals, or other medical providers or organizations. This type of money owed is defined as unsecured debt. Unsecured debts are a loan (i.e., money owed) and not backed by collateral (e.g., a house or vehicle). However, if you are sued in court over the debt, the money judgment can is often attached to collateral like your house.

    When you’re overwhelmed with medical debt, there may be various options available to reduce it. One option is to talk to the provider about a payment plan. However, many providers want an immediate payment to satisfy the whole debt. Many consumers will turn to credit cards to pay the medical bills, leading to a larger monthly payment on the obligation. Other consumers will refinance their house to pay the bill. In Maryland, consumers should never withdrawal money or take a loan from their retirement account. This asset is 100% protected, and medical providers cannot attach it or garnish it to obtain money to pay the bill.

    Bankruptcy may also be a debt relief option to consider.

    Bankruptcy and Medical Debt

    Bankruptcy is a legal process consisting of federal rules and laws, offering a solution to financial problems for businesses and individuals.

    Medical Debt, Chapter 7, and Chapter 13

    One challenge you may be facing is deciding which chapter of bankruptcy to file when you’re dealing with medical debt. Your situation and the ability to meet specific qualifications will help you determine which way to file. Let’s briefly look at Chapter 7 and Chapter 13 bankruptcy.

    Medical Debt and Chapter 7 Bankruptcy

    Chapter 7, known as “straight bankruptcy,” aims to liquidate most, if not all, of your debt in exchange for your property, including your medical bills. All medical bills for services provided before bankruptcy filing should be discharged even if the service provider has not submitted an invoice. A provider can still collect against any health insurance, but any co-pay or uninsured amount will discharge. The only exception is if the creditor can prove an exception to discharge like a fraud.

    To be eligible to file for Chapter 7 bankruptcy, a qualified attorney will examine your income, expenses, assets, and liabilities. Suppose your household is either below median income for Maryland, or you pass the means test. In that case, you qualify for Chapter 7 income from an income point of view. We also examine to make sure there are no assets available for a Chapter 7 Trustee to sell or liquidate.

    Medical Debt and Chapter 13 Bankruptcy

    Chapter 13, known as the repayment/reorganization plan, is a way to reorganize your debt. As a result, you’re able to keep your valuable property that could have been sold in Chapter 7 and pay off what you can over time. You’ll be placed in a three to five-year payment plan during which you’ll pay your debts according to the Bankruptcy Code priority, liquidation analysis, and disposable monthly income analysis.

    However, because medical debt is an unsecured or lower priority debt, you’ll pay those last. On the other hand, first, you’ll have to pay priority debt, including domestic support obligations, administrative expenses, and taxes.

    Eligibility for Chapter 13 is determined by the amount of secured and unsecured debt you are currently carrying. You must also be able to make your monthly payments to creditors. Upon completing your Chapter 13 plan and entering the Chapter 13 discharge, you will eliminate your medical debt.

    If you have medical debt and are considering filing for bankruptcy, Mummert Law can help! We are available for a consultation, at which time we’ll sit down together, evaluate your position, and determine the best way to proceed. So don’t go it alone when it comes to bankruptcy. Make your appointment with Mummert Law today!

  • Chapter 11 Business Bankruptcy

    Chapter 11 Business Bankruptcy featured imageBankruptcy is a legal process that consists of federal rules and laws. This process offers financial solutions for businesses and individuals who owe more debt than they can pay. Therefore, they get a chance to get back on a healthy financial track. The majority of cases are filed under Chapter 7, Chapter 11, and Chapter 13 of the Bankruptcy Code.

    Filing Chapter 11 allows businesses to remain open and in operation while repaying creditors over a set period.

    Chapter 11 Bankruptcy Further Defined

    Chapter 11 bankruptcy is known as “reorganization” that typically involves organizations, businesses, corporations, or partnerships with a great deal of debt. Small companies or individuals can also file. Chapter 11 gives businesses the time and opportunity to reorganize their debts through a plan of restructuring. This plan can provide the filer a fresh start.

    The Plan of Restructuring

    Within this plan, the debtor states how they endeavor to reorganize or liquidate their assets over time. Affected creditors may vote on this plan. If the court receives the necessary votes and the legal requirements are satisfied, they can confirm the plan. The debtor is also subject to fulfilling the terms of their obligations under their plan of reorganization.

    There are several options available to debtors to restructure their business. For example, they can acquire loans under advantageous terms, giving new lenders priority on the organization’s earnings. They can also downsize to reduce expenses or renegotiate debts.

    Chapter 11 Vs. Chapters 7 or 13

    Chapter 7 Vs. Chapter 11

    The entity that files under Chapter 11 doesn’t have to liquidate its assets and remains in control of its operations. It gives the business time to reorganize and to obtain a discharge of previous obligations. However, Congress does not let a corporation, limited liability company, or any other type of business organization obtain a discharge in Chapter 7. Rather, a business that files Chapter 7 is putting up the white flag of surrender.

    Chapter 13 Vs. Chapter 11 (non-sub Chapter V)

    Although Chapters 11 and 13 allow dismissing debts, they have different costs, eligibility, and completion times. Any entity can file Chapter 11 with no specific debt limit or required income. Chapter 13 can only be filed by an individual and not a business (inc., LLC, LP, etc.). Chapter 13 also has predetermined debt limits. Chapter 13 also involves having a trustee appointment that manages the distribution of income and potential liquidation of assets to creditors, where a standard voluntary Chapter 11 starts without a Trustee.

    Advantages of Filing Chapter 11

    One of the most significant advantages to filing Chapter 11 is that the debtor typically remains in possession (as a debtor-in-possession) of their business throughout the process and no Trustee. As a result, they may continue to operate the company and can, pending court approval, even borrow money. Therefore, they can continue to generate cash flow to assist in their repayment process.

    The court also issues an order that will keep creditors at a distance. Creditors are often supportive of Chapter 11 because they stand a solid chance of recouping their money throughout the repayment plan or wish to renegotiate their debt.

    Disadvantages of Filing Chapter 11

    Filing for Chapter 11 can be a lengthy and expensive process. It’s one of the most complicated bankruptcy chapters and has substantial more costs (attorney’s fees, court costs, quarterly payments, etc.). Additionally, the bankruptcy court must approve the reorganization plan. This plan must be achievable so that the business can pay off its debts. Therefore, only after great thought and consideration should an organization pursue filing Chapter 11 bankruptcy.

    It’s important to note that a business can’t make certain decisions without the approval of the courts, including:

    • Sale of assets (other than inventory)
    • Beginning or ending a rental agreement
    • Ceasing or increasing business operations

    Filing for Chapter 11 bankruptcy can provide organizations and individuals relief from their debt burdens while keeping them open for business. However, the process can be complicated, making legal counsel vital before filing the petition. Mummert Law has many years of experience handling bankruptcy cases for clients. Call today, and let’s see what course of action is best for you. Don’t go it alone when it comes to finding financial support for you or your business.

  • Who Will Know If I File for Bankruptcy?

    Who Will Know If I File for Bankruptcy featured imageRecord numbers of new bankruptcy cases across the state are on the rise. And filing for bankruptcy can come with lots of questions and concerns. One of those chief concerns is who will know if you file for bankruptcy?

    Bankruptcy Defined

    Bankruptcy is a legal process consisting of federal rules and laws, offering a solution to financial problems for businesses and individuals. For example, when someone owes more debt than they can pay, bankruptcy assists them by liquidating their assets to clear the debts or establishing a payment plan. It allows individuals and businesses to get back on track with healthy finances and create a fresh start.

    The majority of cases are filed under Chapter 7, Chapter 11, and Chapter 13 of the Bankruptcy Code. We’re going to focus on Chapter 7 and Chapter 13.

    Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy

    Chapter 7, known as “straight bankruptcy,” aims to eliminate most, if not all, of your debt in exchange for your property; however, most Chapter 7 debtors keep all of their property. On the other hand, Chapter 13, known as the “wage earners” plan, is a way to reorganize your debt and catch up past due mortgage and car payments. As a result, you’re able to keep your valuable property, your house, cars, and pay off what you can over time. Both of these bankruptcy filings are designed to give debtors a fresh start.

    For more insight into the differences between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy, click here.

    Who Will Know if I File for Bankruptcy?

    The filing of bankruptcy will create a public record. The Petition, Schedules, Statements, and other required documents will be maintained at the US Bankruptcy Court for your jurisdiction. Others will also be notified as required by Federal law.


    The clerk of court notifies that a bankruptcy petition has been filed to any creditor (an organization or individual that you owe money to) that you list when you file. This notice is not a bad thing; rather, it lets creditors know they are not allowed to call you or attempt to collect the debt without permission of the US Bankruptcy Court.

    Loan Co-Signers

    Any individual that you’ve co-signed a loan with will be informed that you’ve filed for bankruptcy. This places the co-signer on notice that you may not be responsible for the debt anymore.

    Bankruptcy Trustee

    The US Bankruptcy Court will automatically assign a Trustee to review your case. In Chapter 7, the Trustee reviews your Petition, Schedule, Statements, and documents provided to them to confirm that a) you are not committing fraud and b) that you have no assets to liquidate for the benefit of the creditors. An experience bankruptcy attorney will know whether you need to be concerned by either of these issues. A Chapter 13 Trustee also reviews your documents to determine the appropriate amount to repay your creditors.

    Credit Bureaus

    Federal law requires the US Bankruptcy Court to notify the three agencies of your bankruptcy. This information remains on your credit report for 10 years, which matches the average length of time non-payment of debt remains on your credit report. At Mummert Law, we can answer your question how this information will impact you obtaining new credit.

    Your Employer or Potential Employer

    Employers are not officially informed when you file for bankruptcy unless:

    • The bankruptcy filing stops a wage garnishment
    • Your employer is listed as a creditor, and you owe them money
    • You are filing Chapter 13, requiring a payroll deduction order for plan payments

    In addition, your current or prospective employer would need to know where to look for your information on a public record.

    Note – your employer or prospective employer is prohibited by law from discriminating against you due to your bankruptcy on record. If you lose your job or are denied employment because of discrimination, contact a bankruptcy attorney immediately.

    If you have questions about bankruptcy or are considering filing, Mummert Law can help! We are available for a consultation, at which time we’ll sit down together, evaluate your position, and determine the best way to proceed. So don’t go it alone when it comes to bankruptcy. Make your appointment with Mummert Law today!

  • Can I Keep My Car If I File for Bankruptcy?

    Can I Keep My Car If I File for Bankruptcy featured imageBesides protecting their homes, people are most concerned about keeping their cars when filing for bankruptcy. So, we’ll share with you what protecting your vehicle looks like when filing either Chapter 7 or Chapter 13 bankruptcy.

    Bankruptcy helps offer a financial solution to manage better or clear overwhelming debt. And deciding which chapter to file while protecting your car will look different, depending on answers to a few questions. For example, are you behind on your payments? How much equity is in your vehicle? Will you be able to continue to pay for your car in the future?

    If You Must Keep Your Car – Chapter 7 Bankruptcy

    Chapter 7 bankruptcy aims to eliminate most, if not all, of your debt in exchange for your property. Protecting your car in Chapter 7 will depend on whether you’re behind and if your equity is exempt. If your vehicle is worth more than what you owe, or you own it outright, you will need to protect it with a bankruptcy exemption.

    Vehicle Exemption

    To protect certain kinds of property you have equity in, like vehicles, you’d have to apply for an exemption. An exemption permits you to keep specific property so that you can begin with a fresh start after bankruptcy.

    Maryland has property exemptions to include insurance, pensions, personal property, tools of the trade, and wages. However, the state doesn’t have a vehicle-specific exemption. Nor does Maryland bankruptcy law permit debtors to choose federal exceptions (e.g., a federal vehicle exemption). But, the state does have a wildcard exemption that offers filers flexibility, and you can apply it to vehicles. Note – to use a state exemption, Maryland requires individuals that file to have lived in the state for at least two years.

    The Wildcard Exemption

    The Maryland wildcard exemption includes an exemption:

    • Up to $6,000 in cash or other property
    • Up to $5,000 in property of any kind

    You can apply one or both of these exemptions to your vehicle. So, for example, if you need $3,000 of your cash property exemption to cover your tax refund, you can use the remaining $3,000, plus the entire $5,000 in personal property to protect your car, totaling $8,000. Or you can use the entire $11,000 exemption for your vehicle. At Mummertlaw, we are experienced in protecting your cars that have equity.

    Are You Behind on Payments?

    If your car is worth less than what you owe, you’ll have to keep making payments on it to keep it. Because your vehicle is probably collateral against the loan, the loan is a secured debt. And if you don’t pay the loan as previously agreed upon, the lender can repossess the car. Unfortunately, filing for bankruptcy doesn’t remove the lender’s lien, so you’ll have to continue paying off your car or pay for it a different way.

    When you file for Chapter 7, you should be current on your car payments because there’s no mechanism to catch up on missed payments. You’ll have to create a new plan with the lender, or you’ll lose your vehicle. But you could redeem the car or reaffirm the debt to keep your vehicle.

    Redeeming vs. Reaffirming

    With Chapter 7, if you owe more than what your car is worth, you can redeem your car and own it outright. You can do this by paying the lender how much you owe on the vehicle or fair market value, whichever one is the least amount. There are lenders who will loan you money to redeem your car.

    You can also reaffirm your vehicle, which means that you agree that this is a valid debt and that you owe your creditor a certain quantity of money. You will continue to pay on this debt even after your bankruptcy case ends. Therefore, the debt is essentially not part of the bankruptcy, and you won’t be able to discharge it.

    Please note that reaffirmation leaves you with remaining debt after your bankruptcy, so proceed with caution. If you default on the loan at a later date, you’ll be liable for the balance. We will discuss this option before entering into this option.

    If You Must Keep Your Car – Chapter 13 Bankruptcy

    Chapter 13 bankruptcy allows you to reorganize your debt, making reasonable arrangements to pay off what you can over time. For example, suppose you have more equity in your secured assets than you can protect with your Maryland exemptions. In that case, you can reorganize through Chapter 13 rather than liquidate with Chapter 7.

    With Chapter 13, you can:

    • Stop a repossession
    • Catch up on your car payment
    • Possibly reduce your car loan

    You can pay off your car through your repayment plan. You’d make that payment through your bankruptcy trustee, and they’d send a portion to your car lender. However, with Chapter 13, you’ll have to prove you can afford to pay what’s entitled to your creditors in a repayment plan.

    In a Chapter 13 bankruptcy, you can protect your vehicle even if your equity is too much to cover in Chapter 7. To do this, you’ll have to pass the liquidation test.

    The Liquidation Test

    You’ll need to ensure your Chapter 13 payment plan pays the same amount of money to the creditors that they’d receive in Chapter 7. This is known as a liquidation test. Unsecured creditors, such as those you pay your car loan to, must be paid as much as they would in Chapter 7 liquidation.

    Cramdown your Car Loan

    If you have had your car loan for 910 days or more, and you owe more than your car is worth, you may be eligible to cramdown your car loan. This is also an option for people that have a high-interest rate on their car loans.

    When You Can’t Keep Your Car with Chapter 13

    There are a few instances where you might not be able to keep your car under Chapter 13:

    • If you have more equity in your vehicle, then you can protect with an exemption
    • You have an extremely high car payment and high interest
    • You’re paying for a second vehicle that isn’t necessary

    If you have questions about bankruptcy or are considering filing, Mummert Law can help! We are available for a consultation, at which time we’ll sit down together, evaluate your position, and determine the best way to proceed. So don’t go it alone when it comes to bankruptcy. Make your appointment with Mummert Law today!

  • Five Reasons to Settle Your Divorce Through Mediation

    Five Reasons to Settle Your Divorce Through Mediation Featured

    Getting divorced is never a pleasant situation. We’ve all heard horror stories about the fights and unexpected outcomes. As a lawyer, I’ve seen my share of ugly divorces. The battles don’t surprise me anymore. Couples can fight over the kids, or the Kitchen Aid mixer, and all with the same passion. I’m a proponent of using the dignified approach of mediation to dissolve a marriage. Here are some great reasons to use a mediator to guide you through the decisions involved in an amicable divorce.

    Save Money by Using Mediation

    In a traditional divorce, driven by lawyers who have been hired by each party, the fees can be sky-high. In most cases, each party pays their own lawyer, and the price tag may be shocking. As the two lawyers each argue and negotiate back and forth on behalf of their individual clients, the costs continue to climb. Did you know the cost of a traditional divorce can reach five, or even six figures before it’s complete? Everybody saves money by working through mediation.

    Mediation Saves Valuable Time

    Over and above time requirements set by the state, traditional divorce cases are lengthy. In Maryland, it can take eighteen to twenty-four months, or longer. Separating through mediation is considerably faster, and it’s possible for eligible participants to be divorced in around sixty days. Taking more time doesn’t usually shed light on anything new. It just drags the proceedings out and prolongs the healing process when you’re ready to get on with your life.

    Mutual Agreement Through Divorce Mediation

    During mediation, both parties can review each other’s documents, and negotiate an informed settlement with the help of the mediator. Documentation for financial information can be requested by the individuals themselves, instead of having to pay a lawyer to request them. The beauty of this arrangement is people are more likely to have confidence in the documents submitted, since they are done so voluntarily. Since both parties have a voice in the solution, enforcement issues are less likely to come up later.

    Be Kinder to Your Children… Choose Mediation

    Divorce is especially hard on children. As stressful as it may be for adults, kids often feel emotions they can’t put into words. Mediation is a great way to work together to bring about the best outcome, especially for your children. Co-parenting is an essential part of being a divorced parent. Going through the mediation process creates the best chance for the two parents to work together in the future.

    Control the Outcome of Your Divorce Through Mediation

    When a divorce winds up in court, there’s no way to know what the outcome is going to be. It makes life difficult when it comes to planning for the future. A lawyer driven divorce can turn lives upside down without warning. A mediated divorce brings an agreed-upon outcome, so the transition to becoming a divorced family is much more peaceful. It’s also interesting to note the court is likely to order mediation anyway, even if you’ve already paid hefty legal fees.

    Who Can Be a Divorce Mediator?

    Technically, anyone can be a mediator. To be a court appointed family mediator, he/she must be qualified through eighty hours of initial training, and an additional four hours a year of continuing educational training. Court appointed mediators are usually lawyers or mental health professionals. But lawyers who specialize in mediation bring added value to the table. Because they have experience in family law and have had a chance to interact with and observe a judge’s decisions in divorce cases, they have a better understanding of the process and risk of going to court.

    Interested in Learning More About Mediation?

    I am qualified through training, education, and conducting countless mediations in family law cases. I serve as a court-appointed mediator in family law. My education and training in high-conflict cases and working as a parent coordinator allows me to look at things from a better perspective.  It’s rewarding when I help people refocus negative energy. Instead, I help them gain an appreciation for doing what is best for the family. I handle high conflict cases on a regular basis. I take great pride in working with people to reach an agreement both parties can agree to comply with. I enjoy helping families be as stress-free as possible when going through divorce.

  • Understanding Your Bankruptcy | The Reaffirmation Option

    Understanding Your Bankruptcy The Reaffirmation Option

    The process of bankruptcy includes altering or breaking the agreement you made with your creditors in the first place. Sometimes it’s necessary to do this to keep your financial footing. How does it affect your secured debt? Secured debt is the money you borrowed to buy property… ranging from your car to your furniture, even your jewelry. Let’s take a look at the reaffirmation option and how it affects your ability to keep your purchases within your bankruptcy.

    Reaffirmation – Keep Your Property

    In a Chapter 7 bankruptcy filing, to reaffirm your debt basically means that you agree that this is a valid debt and that you owe the money to your creditor, and you will continue to pay on this debt even after your bankruptcy case ends. In essence, it means that particular debt is not part of the bankruptcy and will not be discharged.

    Some Conditions of Reaffirmation

    If you are in delinquent status on the debt at the time of the Chapter 7 filing, you will not be able to reaffirm the obligation. The trustee may seize the property and sell it and use the money to pay off the unsecured debt owed to other creditors. Your lender could also file a Motion for

    Relief From Stay to reposse or foreclose upon the property.

    Even after you reach a reaffirmation agreement with the lender, it must be filed in court as part of your bankruptcy to be considered valid. The judge must also decide if you will be able to make the payments that were negotiated and stated in the agreement.
    It is possible that the judge will reject your reaffirmation agreement if it seems like it will cause you or your family financial hardship, or that you won’t have the money to make the payments as stated. Before a Judge rejects the agreement, a hearing will be held where you will explain to the Judge why you need to reaffirm this debt and how you plan on paying the debt each month.

    Important Reaffirmation Strategy Considerations

    You may be in a situation where you will need to keep specific property that has been purchased with secured debt. The loan agreement may stipulate that the creditor can seize your property if you do not make the payments as agreed. STAY CURRENT on this debt. It is unusual for a creditor to agree to a reaffirmation commitment if you are behind on payments. This may prevent you from having the option of reaffirmation.

    Remember that reaffirmation leaves you with remaining debt after your bankruptcy, so proceed with caution. When making your decision, be sure to get advice from your attorney on the following:

    • Is this the only way you can keep the property?
    • Will you realistically be able to pay the balance?
    • Can you get the creditor to readjust the balance due to give you breathing room?

    Reaffirmation is Only One Option

    When you’re filing Chapter 7 bankruptcy, you have options. It’s essential to get good legal advice before filing, to ensure that everything is processed correctly and in your best interest. At Mummert Law, we help people every day to reduce and reorganize their debt through bankruptcy proceedings and negotiations with creditors outside of bankruptcy. Contact us today for your consultation appointment. Let’s sit down and discuss your situation. We can help you too!

  • Bankruptcy Chapter 7 Versus Chapter 13

    Bankruptcy Chapter 7 Versus Chapter 13

    These days, finances are complicated for many people. We see record numbers of new bankruptcy cases across the state. If you’re not familiar with the different types of bankruptcy filings, it can be confusing. Today, we’re going to talk about the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy. You’ve probably heard of both types but may not understand the difference between the two. We’ll clarify that now.

    What are the Similarities Between Chapter 7 and Chapter 13 Bankruptcy?

    Both types of bankruptcy can bring relief from a crushing debt load that you are unable to handle, but they do it in very different ways. Both strategies can be done on your own but are better handled by competent attorneys that specialize in bankruptcy. Bankruptcy is a complicated procedure, and not for amateurs.

    What are the Main Differences Between Chapter 7 and Chapter 13 Bankruptcy?

    The goal of Chapter 7 bankruptcy is to eliminate most, if not all, of your debt. The debt is “discharged” through the process, and you no longer owe it to the creditor. However, the Trustee may be able to sell assets for the benefit of the creditors.
    Chapter 13 bankruptcy is different, and it serves as a way to reorganize your debt, make reasonable arrangements to pay off what you can over time, and make it more manageable for you. If you have a debt that could be sold in Chapter 13, the Chapter 13 Plan most likely will let you keep that asset.

    Do You Have to Be a Business to File Chapter 7 or Chapter 13?

    No, business entities other than sole proprietorships cannot file using the Chapter 13 option… only individuals or sole proprietors have this option. Chapter 7 can be used by both businesses and individuals. For individuals, you will eliminate the debt when you’re in over your head. For businesses, you will not receive a discharge, but you will put the world on notice that the business is shut down.

    Are There Financial Restrictions for Chapter 13 and Chapter 7?

    Yes, both types of bankruptcy filings have some restrictions. For you to file Chapter 7 bankruptcy, you must pass a means test, and your disposable income must be low enough. We must also protect the assets that you want to keep.
    Eligibility for Chapter 13 is determined by the amount of secured and unsecured debt you are currently carrying.

    How Long Do Both Options Take To Receive a Discharge?

    When you file for Chapter 7, it will most likely take approximately four to six months to receive your discharge of debt. Remember that Chapter 13 is more about restructuring than eliminating, so you will get your discharge when you’re finished making your arranged plan payments. The process usually varies between three to five years.

    Weighing the Pros and Cons of Chapter 7 Bankruptcy

    There are pros and cons to both Chapter 7 and Chapter 13. The main benefit of filing Chapter 7 is that it’s over relatively quickly, and most of your debts are discharged, meaning you can move on at that point. When you file Chapter 7, however, some of your property can be sold to pay down debts, and there’s no way to prevent repossession or foreclosure.

    Looking at the Pros and Cons of Chapter 13 Bankruptcy

    When you file to restructure your debt under Chapter 13 Guidelines, you can keep your property, and you’ll have up to five years to repay your past due car payments or mortgage payments. On the downside, it will take three to five years to complete your Chapter 13 bankruptcy, and you’ll end up paying back a portion of unsecured debts as well.

    How Do I Figure Out Which Method is Better For Me?

    If you are not sure which filing option would be better for you, Mummert Law can help! We are available for a consultation, at which time we’ll sit down together, evaluate your position, and determine the best way to proceed. Don’t go it alone when it comes to bankruptcy. Make your appointment with Mummert Law today!

  • Are All Bankruptcies Created Equal?

    Are All Bankruptcies Created Equal 800

    Of course, they aren’t. Just as each individual and their circumstances are unique, so are bankruptcy cases. This is not the time to shop for the bargains or use a Groupon. Bankruptcies are serious matters and deserve the best attention and services available. The amount of paperwork involved in processing a bankruptcy claim has increased over time. It now requires over 50 pages of information to file your petition. Here are a few things to consider if you are thinking about filing for bankruptcy.

    Do You Know the Best Time to File?

    As your lawyer, I recognize timing is a critical part of preparing your petition. Filing in July and August is the best time to get your filing done. This is typically several months after you’ve received your tax refund, and there are still five months remaining until the end of the current tax year and next return filing. As your bankruptcy attorney, I work with you to develop the most effective filing strategy.

    Bankruptcy – Getting Your Ducks in a Row!

    It is of the utmost importance to make sure your file is complete and organized. If your documents are in order, it makes it easier for processing when all parties have the answers and information they need. An organized file will make it easier and quicker for the Trustee to arrive at a decision about whether you are deserving of a discharge of debt.

    Who Is Preparing Your Bankruptcy Petition?

    This is a significant difference you will see as you are reviewing law firms. When you hire Mummert Law, I’m signed on personally to prepare your petition. I do not ask a paralegal to do this critical work for me. I want to be familiar with the ins and outs of your case and to know it thoroughly. Once the documents have been prepared, I sit with you, and we look over them together. We will check for understanding, and discuss anything you’re not sure about. At this meeting, I can let you know what areas are concerning to me, and what you can expect when we file.

    Personalized Service

    I do not treat any bankruptcy case as “cookie cutter.” Every bankruptcy I’ve ever filed is entirely different from every other one. Each one has its own challenges. My responsibility is to make sure you are in a good position as we move through the stages. My goal is for a positive outcome.

    But, I also serve as a trusted advisor who advocates for you at every turn. Bankruptcy is a stressful experience for most people, and I work to ensure it’s as stress-free as possible. Organization, strategy, and attention to detail can save so much time in the process, and that’s what you’ll get when you hire me to help you with your bankruptcy.

    If you are considering filing for bankruptcy, and want to explore your opportunities, call me today, and let’s sit down and talk about your case.

  • Is This the Right Time to File for Bankruptcy?

    is it the right time to file bankruptcy featured

    In these tough economic times, many folks are worried that they might not make it. It is pretty normal these days to worry about foreclosures, repossessions, and creditors bothering you. Bankruptcy might be a good option for you, but is it the right time to file? Let’s assess the situation and see where you stand.

    How’s Your Financial Health?

    There’s always an emotional aspect of financial trouble. For this reason and others, people tend to hide their heads in the sand, denying that there’s a problem. Here are some telltale signs that you should seek some professional help to bring your finances under control.

    • You keep getting calls from bill collectors
    • You are having trouble making minimum payments on your credit cards
    • Thinking about your finances makes you feel out of control or scared
    • You’re not sure exactly how much you owe
    • You are using credit cards to pay for everything, including food, household supplies, and gasoline
    • You’re thinking about debt consolidation

    Reasons to File for Bankruptcy Now

    • You might have an immediate need to file bankruptcy to avoid financial disaster. Do any of these apply to you?
    • You have been unemployed for a long time, and are not eligible for unemployment
    • You are about to have your car repossessed
    • You are having your wages garnished
    • You’re facing eviction from your home
    • Your mortgage holder has started foreclosure proceedings
    • Your prospects are good for starting a higher paying job… you might want to file while your income still qualifies you
    • You are getting ready to move to another state that has less favorable exemptions for bankruptcy
    • You are expecting a windfall in the future, but not immediately

    As you see, there are many factors to consider when you’re thinking about filing for bankruptcy. This is why getting sound legal advice from a lawyer is a good idea. Bankruptcy laws can be complicated and difficult for the average person to navigate.

    Planning is Essential – Timing is Everything

    In some cases, it makes sense to delay filing for bankruptcy if you can hold things together for a while, and do not have a crisis. Sometimes you need to file to get immediate relief. Either way, it requires advance planning and a good lawyer who will help you understand your best strategy, based on your current situation. Some reasons you may want to take a closer look at your options are:

    • You are moving to another state that has more favorable bankruptcy exemptions
    • Your job position is changing, and you will be making less money
    • You’ve repaid a debt to a relative within the last year
    • You have recently (within the last year) purchased luxury goods
    • You are waiting to receive a large income tax refund

    These are just a few reasons why you need to plan your filing properly and discuss with your attorney how to address these issues. Bankruptcy is not a simple action. You need help and guidance if you want the best result from your bankruptcy case.

    Mummert Law has many years of experience handling bankruptcy cases for clients. Call today, and let’s see what course of action makes sense to you.