Maryland Bankruptcy Lawyer
Jack I Hyatt

410 - 484 - 4900

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Jack I Hyatt
Attorney at Law 
1866 Autumn Frost 
Baltimore, MD 

410 - 484 - 4900


Hardship and Difficult Cases Accepted
Our priority is to save your house and pension
Low Fees - Payment Plans - Weekend and Evening Appointments
Help With - Credit Cards - Bank Loans - Foreclosure - Taxes - Student Loans
Free Telephone Consultation   410 - 484 - 4900   24/7

Excellence In Legal Service - Serving The Entire State Of Maryland

We have earned the trust of thousands of satisfied clients and have gained experience gained in thousands of successful Bankruptcy cases since 1973.   We will properly prepare all required documents for you, promptly file them with the court, appear in court with you at your hearing and keep you fully informed throughout your case.   There is no substitute for trust and experience. " You can use the law firm that has helped thousands of consumers in bankruptcy since 1973."

Representing Debtors To Totally Eliminate Debts, Or To Reorganize Debts In Order To Protect Property And To Obtain A Fresh Financial Start

Client Comments

" Your representation was outstanding in recovering thousands of dollars I paid out in a debt consolidation scam, properly representing me in a bankruptcy and getting all my debts eliminated at a low fee, and less than one half of what I paid to them. What was most important to me was your integrity and clear answers to my questions." ~~D.G.

" Thanks for taking over my chapter 13 case which enabled me to save my house. " ~~ W.S.

" Many thanks for a job well done in getting my tax debts and other claims eliminated and being available to answer all of my questions throughout my case." ~~B.W.

" I appreciate your meeting with me on the weekends so I did not have to lose time from work."~~N.T.

I was very impressed with your dedication to my case, answering all of my questions throughout the case, obtaining my discharge without delay and getting back the money taken in the wage attachment. If anyone needs to file bankruptcy you are the lawyer they need to call. ~~K.B.

" I was suprised to learn how the debt settlment company I saw on television took advantage of me. Thank you for getting my money back from them, properly filing my bankruptcy and saving my house. I recommend your services. " ~~H.M.

" I was suprised to learn how the debt settlement company I saw on television took advantage of me. Thank you for getting my money back from them, properly filing my bankruptcy and saving my house. I recommend your services. " ~~H.M.

" Thanks for your straight forward answers, working with me with a payment plan and saving my house."~~D.J.

Prompt, experienced and effective representation for all financial issues including, foreclosure, repossession, wage attachments, student loans, federal and state tax matters. In addition to bankruptcy, we provide effective representation for tax problems with the IRS, tax audits, tax liens, tax wage attachments, IRS offers in compromise, IRS installment plan arrangements, and IRS audits.

Each case is different and presents different opportunities and challenges.

If you are currently in a Chapter 13, making payments to a mortgage company, a trustee, finding out your Chapter 13 plan can not be confirmed, and your Chapter 13 will not result in retaining your home, upon review of the facts in your case in many instances, we can provide options that will be less expensive and far more effective.

You can call a Maryland Bankruptcy lawyer if you have questions about your eligibility to file.

Your can call a Maryland Bankruptcy lawyer if you have questions about which chapter is best for you.

You can call a Maryland Bankruptcy lawyer if you have questions about what you will keep and what you can lose.

Your can call a Maryland Bankruptcy lawyer if you have questions about how long will the process take in your case.

You can call a Maryland Bankruptcy attorney if you have questions about the advantages of filing for chapter 13.

Your can call a Maryland Bankruptcy lawyer if you have questions about is the effect of the means test.

You can call a Maryland Bankruptcy attorney if you have questions about can your house or car payments be reduced.

Your can call a Maryland Bankruptcy lawyer if you have questions about what your other alternatives are.

*If you have been a victim of a "credit counseling program", "debt management program" or home "rescue program", we can help to get your money back, damages or both.   We have recovered thousands of dollars for payments made to programs that have misrepresented their status and their ability to provide an effective solution.   If you are in a debt "credit counseling" or "debt management program", you may wish to determine:

1. Exactly what portion your payments is being applied to principal.
2. Exactly what portion your payments is being applied to hidden interest, costs and fees.
3. Exactly what portion your payments is being paid to the program for their benefit.
4. Most of these programs have huge advertising expenses, overhead, and expenses that are being paid by the people they are supposed to help.
5. If the program accepts funds from the very creditors they are collecting for, a conflict of interest exists.
6. If the program has represented they are non-profit, if any portion of your payments being paid to them for any reason, a conflict of interest exists.
7. FYI Before you pay a penny to a "credit counseling program" or "debt management program", you should request a written statement exactly what percentage of their customers actually complete the program and become debt free.   You will learn the percentage is extremely low.

*If you are behind in mortgage payments and your mortgage has been accelerated it is possible you can make payments and the mortgage company may not have any obligation to reinstate your mortgage, or return your late payments.

*As any decision can be made within hours, or at the most, a few days.   If you are hearing terms such as "mitigation department", "reinstatement department", "loss mitigation", you should be suspicious.

*Each day you that you are in default, and each day your case is delayed, will generate additional fees and expenses which benefit the mortgage company that you will have to pay which will make it more difficult to attempt to save your home.   Depending upon your facts, we know exactly what to do to force a prompt decision and to determine your very best option to prevent the sale of your home.

*Many people are encouraged to file Chapter 13 but are not properly informed of the many fees and costs that are imposed during the course of the plan which causes some people to be in a far worse position after filing than prior to the time the case was filed.   If you are in, or have been in a Chapter 13, that resulted in failure, we have effective options for you.

Bankruptcy Attorney
Maryland Bankruptcy Lawyer
Attorney Credentials:
Former Assistant State's Attorney
Admitted To Practice Before:
The U.S. Supreme Court
All Maryland Courts
Federal District Court
Maryland State Bar Association 
Baltimore City Bar Association 
Baltimore County Bar Association 
University of Baltimore 
A.A. B.S. J.D. 
Honorable Discharge U.S. Army

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Bankruptcy Myths

Myth 1: Everyone will know you have filed for bankruptcy.
Myth 2: You will lose everything you have.
Myth 3: You will never be able to own anything again.
Myth 4: You will never get credit again.
Myth 5: Filing bankruptcy will hurt your credit for 10 years.
Myth 6: If you're married...both you and your spouse have to file for bankruptcy.
Myth 7: It's really hard to file for bankruptcy.
Myth 8: Only deadbeats file for bankruptcy.
Myth 9: Filing bankruptcy means you're a bad person.
Myth 10: Filing for bankruptcy will hurt your credit.
Myth 11: Even if you file for bankruptcy, creditors will still harass you and your family.
Myth 12: If you file for bankruptcy, it may cause more family troubles and may even lead to divorce.
Myth 13: You can't get rid of back taxes through bankruptcy.
Myth 14: You can only file once for bankruptcy protection.
Myth 15: You can pick and choose which debts and property to list in your bankruptcy.

Statement of Client Rights

You are entitled to be treated with courtesy and consideration at all times by your lawyer and the other lawyers and personnel in your lawyers office.

You are entitled to an attorney capable of handling your legal matter competently and diligently, in accordance with the highest standards of the profession.

You are entitled to your lawyer's independent professional judgment and undivided loyalty uncompromised by conflicts of interest.

You are entitled to be charged a reasonable fee and to have your lawyer explain at the outset how the fee will be computed and the manner and frequency of billing.

You are entitled to have your questions and concerns addressed in a prompt manner and to have your telephone called returned promptly.

You are entitled to be kept informed as to the status of your matter.

You are entitled to have your legitimate objectives respected by your attorney, including whether or not to settle your matter.

You have the right to privacy in your dealings with your lawyer and to have your secrets and confidences preserved to the extent permitted by law.

You may not be refused representation on the basis of race, creed, color, religion, sex, sexual orientation, age, national origin or disability.

Answers to Frequently Asked Questions

Is there a reason to be embarrassed?.   Because over a million people a year have filed for the past seven years, the process has changed so that there is no embarrassment.

Will I be able to get new credit?   Some of our clients get cars a week after the case is closed and houses within a year.

Will Bankruptcy will destroy my life?   It actually gives you a fresh start to a better life.

Will I lose control of my life?   It gives back control over your life by ending the harassment, calls and payments you can't afford.

Is Bankruptcy expensive?.   We offer low fees, payment plan in most cases and have evening and weekend appointments. Will I lose everything?   In most bankruptcies, you keep all of your property.

Is a Bankruptcy published in a nespaper?   Very few people, if any, will know about your case.

What will my future be like?   In most cases, when you go through the bankruptcy process, it gives you a brighter future.

Will I lose my bank accounts?   Bankruptcy will protect monies in your bank account.

What if my employer finds out?   In a chapter 7? Your employer will most likely not find out and even if so, you cannot lose your job.

What will I do if I have to start over?   The fear should be: What would you do if you didn't have a chance to start over?

What if I don't qualify for bankruptcy?   If we take your case, you will be given bankruptcy protection. We have qualified thousands of people for bankruptcy.

I don't understand anything about bankruptcy.   At your first appointment, we will fully explain all of your options.

When will the harassing phone calls, garnishments, suits, letters stop?   They all stop once the bankruptcy case is filed.

Will Bankruptcy will hurt my credit?   Most people's credit is already bad or will be bad soon by the time they call a bankruptcy attorney. The bankruptcy gives you a fresh start.

We work with you with a workable payment plan and a low fee we invite you to compare. Call, you will see for yourself. 410-484-4900

Free Telephone Consultation 410-484-4900


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Our debt relief agency will fully prepare all bankruptcy documents, both before and after your case is filed, go to court with you, and defend you against contested matters from the trustee, your creditors and their attorneys.

"There is No Substitute For Experience."

Bankruptcy Basics 

Bankruptcy Terms

Adversary Proceeding

Lawsuit filed in the bankruptcy court which is related to the debtor's bankruptcy case. Examples are complaints to determine the dischargeability of a debt and complaints to determine the extent and validity of liens.


Amount that is unpaid and overdue as of the date the bankruptcy case is filed. The word "arrears" is usually used when referring to back child support, back alimony owed, or the amount that is past due on mortgage payments (including interest and penalties). Assets Personal possessions of value, including cash, real estate, vehicles and investments.

Automatic Stay

An injunction that stops lawsuits, foreclosure, garnishments and all collection activity against the debtor the exact date a bankruptcy petition is filed Bankruptcy: By filing in federal bankruptcy court, an individual or individuals can restructure or relieve themselves of debts and liabilities.


The Bankruptcy Code permits the debtor to eliminate (avoid) some kinds of liens that interfere with (or impair) an exemption claimed in the bankruptcy. Most judgment liens that have attached to the debtor's home can be avoided if the total of the liens (mortgages, judgment liens and statutory liens) is greater than the value of the property in which the exemption is claimed. This is sometimes called "lien stripping." Avoidance Powers Rights given to the bankruptcy trustee or the debtor in possession to recover certain transfers of property such as preferences or fraudulent transfers or to void liens created before the commencement of a bankruptcy case.

Bankruptcy Code

Title 11 of the United States Code governs bankruptcy proceedings. Bankruptcy is a matter of federal law and is the same in every state with the exception of exemptions. When federal bankruptcy law conflicts with state law, federal law controls. Bankruptcy Estate The estate is all of the legal and equitable interests of the debtor as of the commencement of the case. From the estate, an individual debtor can claim certain property exempt; the balance of the estate is liquidated in a Chapter 7 to pay the administrative costs of the proceeding and the claims of creditors according to their priority.

Chapter 7

Chapter 7 bankruptcy is a process provided for under United States federal law which entitles you to a fresh start. Chapter 7 may eliminate most kinds of unsecured debt. It is usually designed for someone with no assets

Chapter 11

Reorganization proceeding in which the debtor may continue in business or in possession of its property as a fiduciary. A confirmed Chapter 11 plan provides for the manner in which the claims of creditors will be paid in whole or in part by the debtor.

Chapter 12

Simplified reorganization plan for family farmers whose debts fall within certain limits. Chapter 12 was not renewed when it expired this session of Congress.

Chapter 13

Chapter 13 is an interest-free debt repayment plan through which you consolidate your debts and make a payment on your debt over a 3 to 5 year period. This type of bankruptcy is often used to save a house from foreclosure or to save a car from repossession. Collateral The property that is subject to a lien as for payment of a debt or performance of a contract. A creditor with rights in collateral is a secured creditor and has additional protections in the Bankruptcy Code for the claim secured by collateral.

Maryland Chapter 13 attorney. A Maryland Chapter 13 attorney can help you to work out a plan that suits your needs.


Process by which the Bankruptcy Judge approves a plan of reorganization of a debtor in a Chapter 13 case. Conversion Cases under the Bankruptcy Code may be converted from one chapter to another chapter; for example, a Chapter 7 case may be converted to a case under Chapter 13 if the debtor is eligible for Chapter 13. Even though the Chapter of the Code that governs it changes, it remains the same case as originally filed. Credit Report A report outlining an individuals credit history, public records and credit worthiness.

Creditor Any person or business that a debtor owes money to. Debtor Any person who is liable to another for money. Default Failure to make payments within a specified period of time governed by the original contract.

Delinquency Failure to make payments when payments are due. For most mortgages, payments are due on the first day of the month. Even though they may not charge a "late fee" for a number of days, the payment is still considered to be late and the loan delinquent. When a loan payment is more than 30 days late, most lenders report the late payment to one or more of the credit bureaus.

Denial of Discharge

Penalty for debtor misconduct with respect to the bankruptcy case or creditors as a whole. The grounds on which the debtor's discharge may be denied are found in 11 U.S.C. 727. When the debtor's discharge is denied, the debts that could have been discharged in that case cannot be discharged in any subsequent bankruptcy. The administration of the case, the liquidation of assets and the recovery of avoidable transfers, continues for the benefit of creditors.


Debts that can be eliminated in bankruptcy. Certain debts are not dischargeable; that it, they may not be discharged through bankruptcy or may only be discharged through Chapter 13. Family support and criminal restitution are examples of debts which cannot be discharged. Debts incurred by fraud can only be discharged in Chapter 13. Discharge The legal term for the order eliminating a debt through a bankruptcy case. When a debt is discharged, it is no longer legally enforceable against the debtor, though any lien that secures the debt may survive the bankruptcy case.


A homeowner's financial interest in a property. Equity is the difference between the value of the property and the amount still owed on its mortgage and other liens. Exempt Property that is exempt is removed from the bankruptcy estate and is not available to pay the claims of creditors. The debtor selects the property to be exempted from the statutory lists of exemptions available under the law of his state. The debtor gets to keep exempt property for use in making a fresh start after bankruptcy.


Exemptions are the lists of the kinds and values of property that is legally beyond the reach of creditors or the bankruptcy trustee. What property may be exempted is determined by state and federal statutes, and varies from state to state.


One who is entrusted with duties on behalf of another. The law requires the highest level of good faith, loyalty and diligence of a fiduciary, higher than the common duty of care that we all owe one another. The debtor in possession in a Chapter 11 is a fiduciary for the creditors, owing loyalty to the creditors and not the shareholders of the debtor.

Fair Market Value

Highest price that a buyer, willing but not compelled to buy, would pay, and the lowest a seller, willing but not compelled to sell, would accept. Foreclosure: The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mortgage debt.


Court-ordered method of debt collection in which a portion of a person's salary is paid to a creditor. The process by which a judgment creditor seizes money, which is owed to his judgment debtor, from a third party known as a garnishee.

General Unsecured Claim

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Creditor's claim without a priority for payment for which the creditor holds no security (or collateral). If the available funds in the estate extend to payment of unsecured claims, the claims are paid in proportion to the size of the claim relative to the total of claims in the class of unsecured claims.


Charge upon real or personal property for the satisfaction of a debt or discharge of an obligation. Examples would include: judgments, taxes, mortgages, deeds of trust, etc. Liquidated A debt that is for a known number of dollars is liquidated. An unliquidated debt is one where the debtor has liability, but the exact monetary measure of that liability is unknown. Tort claims are usually unliquidated until a trial fixes the amount of the liability of the tort feasor.


Chapter 7 case in which the trustee determines, after the applicable exemptions, that there are no significant assets to liquidate. The debtor retains all of their real and personal property.


When a secured creditor has taken the required steps to perfect his lien, the lien is senior to any liens that arise after perfection. A mortgage is perfected by recording it with the county recorder; a lien in personal property is perfected by filing a financing statement with the secretary of state. An unperfected lien is valid between the debtor and the secured creditor, but may be behind liens created later in time, but perfected earlier than the lien in question. An unperfected lien can be avoided by the trustee.

Personal Property Property that is not real property or affixed to real property, such as cars, stock, furniture, etc. Petition document that initiates a bankruptcy case. The filing of the petition constitutes an order for relief and institutes the automatic stay. Events are frequently described as "prepetition", happening before the bankruptcy petition was filed, and "post petition", after the bankruptcy.

Preference transfer to a creditor in payment of an existing debt made within certain time periods before the commencement of the case. Preferences may be recovered by the trustee for the benefit of all creditors of the estate.

Priority The Bankruptcy Code establishes the order in which claims are paid from the bankruptcy estate. All claims in a higher priority must be paid in full before claims with a lower priority receive anything. All claims with the same priority share pro rata. Claims are paid in this order: 1) costs of administration 2) priority claims and 3) general unsecured claims. Secured claims are paid from the proceeds of liquidating the collateral which secured the claim. Priority Claims Certain debts, such as unpaid wages, spousal or child support, and taxes are elevated in the payment hierarchy under the Code. Priority claims must be paid in full before general unsecured claims are paid.

Proof of Claim

Document a creditor files showing how much money is owed to them by the debtor, together with all supporting evidence of such claim. There is usually a deadline in which to file a Proof of Claim. Property of the Estate The property that is not exempt and belongs to the bankruptcy estate. Property of the estate is usually sold by the trustee and the claims of creditors paid from the proceeds.

Reaffirm debtor's choice to eaffirm debts that would otherwise be discharged by the bankruptcy. Generally, when a debt is reaffirmed, the parties to the reaffirmed debt have the same rights and liabilities that each had prior to the bankruptcy filing: the debtor is obligated to pay and the creditor can sue or repossess if the debtor doesn't pay. Relief from Stay Creditor's request to lift the automatic stay and permit some action against the debtor or the property of the estate. If the motion is granted, the moving party (but no one else) is free to take whatever action the court permits. Relief can be absolute, for example, permitting the creditor to foreclose on property, or limited, as for example, allowing the recordation of a notice of default.

Repossession Once in default, as defined by the creditor in the security agreement, occurs, the creditor can: repossess the collateral by self-help (depending on state law) or with the aid of a court order, dispose of the collateral by public or private foreclosure sale, retain the collateral in satisfaction of the debt, terminate the debtor's right of redemption, add the costs of repossession and foreclosure to the unpaid balance of the debt, and pursue the debtor for any remaining unpaid balance or deficiency.

Secured Debt a debt where the creditor takes personal or real property as collateral. A creditor whose debt is secured has a right to take property to satisfy a debt in default. For example, most homes are burdened by a secured debt in the form of a mortgage. This means that the lender has the right to take the home if the borrower fails to make payments on the loan.

Trustee private individual or corporation appointed in bankruptcy filings who represents the interests of the creditors in the bankruptcy estate.

Unsecured A claim or debt is unsecured if there is no collateral that is security for the debt. Most consumer debts are unsecured.

What is Chapter 7 Bankruptcy?

Chapter Seven Bankruptcy in Maryland is a type of bankruptcy that is designed to totally remove all your debt and start you over with a clean slate. A proper filing by a Maryland Bankruptcy Lawyer will result in obtianing a court order for your creditors to stop collection efforts on the debts you owe them.

A Maryland Bankruptcy Laywer can identiy what debts will be eliminated and which will not prior to your case being filed.

A Maryland Bankruptcy Lawyer will be able to idemtify what assets you and what you may have to surrender.

This is why Chapter 7 bankruptcy is often referred to as "liquidation bankruptcy."

In liquidation, Chapter 7 bankruptcy allows you to select property that you are eligible to keep according to a list of state or federal exemptions. A Maryland Bankruptcy Lawyer will be able to assist you in identifing what assets will be covered by various exemptions that wil be available for your. The bankruptcy court will provide you with both lists; you should seek qualified advice of a Maryalnd Bankruptcy Lawyer when deciding which list to follow and determining which items you own that qualify.

While chapter 7 bankruptcy seeks to commit you to giving over any value that you do have to your creditors, it is not designed to impose crippling measures on you. For example, the bankruptcy court will not deem it proper to repossess your car when you are using the car to get to a job so you can continue working.

Once you file for chapter7bankruptcy, the bankruptcy courts appoints an individual known as the "trustee" to supervise your case. There is a hearing known as a "meeting of creditors" that usually takes place around one month after your bankruptcy has been filed. This meeting is to allow the trustee to examine you under oath at your hearing, review your legal forms and ask any questions related to your filing. A Maryland Bankruptcy Lawyer will be able to assist you at your hearing. Even though the name of this hearing implies that your creditors will be present, the fact is that they are seldom actually at the meeting.

If you have any non-exempt property at the time of this meeting, you are usually obligated to turn over the property ownership or its cash equivalent to the trustee. These meetings, while they might seem intimidating, are usually brief and very to-the-point. They get the following stages of your bankruptcy processing in order, and usually within 3 to 6 months of this meeting you will receive official notice from the court that all of your debts have been discharged. This signals the closure of your chapter 7 bankruptcy case.

What is Chapter 13 Bankruptcy?

When you owe more debt to your creditors than you can currently handle and have decided to file for personal bankruptcy, Chapter thirteen bankruptcy can provide some very helpful solutions to help you get your finances back in order.

Chapter 13 bankruptcy uses the bankruptcy court as a mediator between you and your creditors in order to re-organize your debts and create a way for you to repay either all your debt or a part of it. A Maryland Bankruptcy Lawyer can assist you in drafting a plan of reorganization.

Total repayment is not always deemed necessary under chapter 13 cases- the court will consider the amounts and types of your owed debts to reach a decision on the repayment amount. Chapter 13 bamkruptcy also ends collection attempts made by your creditors and grants you protection from other measures such as repossession, utility shutoff, and wage garnishment.

Can I file bankruptcy without a lawyer?

Remember the old adage that "he who represents himself has a fool for a lawyer"? There is some truth there.

The paralegal services and on line bankruptcy providers try to characterize filing bankruptcy as "just filling out forms". That's just as true as seeing tax preparation as "just filling out forms"; and the tax forms come with instructions written for the non professional. Bankrutpcy forms don't.

The more assets you have to lose in a botched bankruptcy, the more it is worth your while to pay a lawyer to protect them in a bankruptcy proceeding.

What can go wrong when you represent yourself

The bankruptcy amendments of 2005 have now studded the Bankruptcy Code with situations in which dismissal of cases is automatic and the relief available when you refile is strictly limited. The means test forms, new in October,2005, are difficult to get through and easy to bungle.

Congress was upfront that it wanted to discourage consumers from filing bankruptcy and made the process substantially more complex and the consequences of mistakes more costly.

Chapter 13 is not well suited for debtors in pro per (representing themselves) since it has lots of unwritten rules and local customs that just aren't easily discoverable to the layman or even the generalist lawyer. More on paying for a Chapter 13.

Corporations and partnerships cannot, by law, represent themselves.

Is yours a "simple" case?

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We recommend that you visit a lawyer, get an overview of your situation and any issues that are presented in your case. Initial consultations are frequently free or at a reduced cost. Find a bankruptcy lawyer. See Paying for bankruptcy.

Perhaps a better alternative is to save up money to get an attorney's help, or consider filing a Chapter 13 where the legal fees can be paid over time through the plan.

A maryland bankruptcy lawyer should be knowledgeable of maryland bankruptcy court decisions.

A maryland bankruptcy lawyer should be knowledgeable of maryland bankruptcy local rules of he maryalnd bankruptcy courts.

A maryland bankruptcy lawyer should have litigation experience in the event your case is contested

A maryland bankruptcy lawyer should be able to identify situations prior to filing when creditors contest cases.

A maryland bankruptcy lawyer should understand when an abuse of credit has occurred that could trigger a case being contested. A maryland bankruptcy lawyer get a clar and complete understanding of the facts in each case prior to making a recommendation to file.

A maryland bankruptcy lawyer should explain all alternatives to the cleint prior to filing any documents with the court.

A maryland bankruptcy lawyer should consider all alternatvies for the client prior to making a recommendatio nto file.

A maryland bankruptcy lawyer communicate throughout the case all documents received by the trustee.

A maryland bankruptcy lawyer communicate throughout the case all documents received by from creditors.

A maryland bankruptcy lawyer be available to all client questions throughout the case.

Q. I just don't seem to be getting anywhere--I'm robbing Peter to pay Paul. How can bankruptcy help?

A. You are getting buried by interest rates that can run up to 22%, and more! There are a number of possible solutions. A straight bankruptcy under Chapter 7 is one, and a reorganization under one of the other chapters, particularly Chapter 13, is another. See Chapter 7 and Chapter 13 of our site.

Q. I have enough money to pay some of my bills, but not all of them. How can I handle my creditors?

A. Relax! Straight Bankruptcy under Chapter 7 or a reorganization under Chapter 13 are certainly possibilities. In any bankruptcy chapter, the creditors are forbidden to contact you one the bankruptcy petition is filed. See those areas of our site.

Q. I can't pay my bills now, but I'll be able to do it soon, if I could just get the creditors to wait a bit longer. Can a bankruptcy help?

A. Yes! Under reorganization provisions of the Bankruptcy Code, we can often prepare a plan that will defer some, most, or even all of your payments (under limited circumstances) if you have an event that is to occur in the future. Some examples: a house closing, a personal injury case, a worker's compensation case, an inheritance, a new job that will be starting. See Chapter 11 and Chapter 13 of our site.

Q. I just can't take the phone calls any longer! What can a bankruptcy do?

A. We'll stop those calls! The filing of any kind of bankruptcy acts as a "stay", or hold, on any kind of collection activities by creditors, even tax creditors! Let us take the calls for you! That's our job!

Q. How does bankruptcy give me protection from my creditors?

A. The filing of the bankruptcy acts as an automatic stay on the collection efforts of your creditors. In a Chapter 7 bankruptcy case, the unsecured creditors (those who do not have security for their debts, unlike a mortgage creditor or the holder of the title to your car, who do have security) will usually have their claims eliminated, or discharged. Under the reorganization bankruptcies, such as Chapter 11, Chapter 12, or Chapter 13, the creditors will generally have to wait so see how you are going to treat them under the Plan of Reorganization. There are always exceptions, so consult with your bankruptcy attorney for more information, and keep on reading!


A. For most people, Chapters 7, 11, 12 (for farmers only), and 13. See our site under each chapter for explanations of each, or better yet, come see us in our office.

Q. Will I lose my existing credit cards?

A. Not in all cases, but in most. But this shouldn't be a big surprise: this is bankruptcy, after all.

Still, in many Chapter 7 cases, some creditors will ask you if you want to reaffirm their debt. That means that you would continue to pay part or all of the debt in exchange for a chance to keep your credit. These offers should be considered carefully, with the advice of your attorney. You may wish to keep their credit, but you don't want to get yourself in financial difficulty again!

In Chapter 13 cases, you will not have use of your credit cards, except in the rare circumstance when you have kept a card with a balance of zero at the time of filing of the bankruptcy, and you absolutely need the card for business purposes. There may be other exceptions, but not many.

Q. Can I use my credit cards now to get money or buy things, and then file bankruptcy?

A. I hope you're kidding. This is fraud, pure and simple. It is also against the law, if the moral issue isn't enough of a deterrent.

Q. Does that mean I won't have credit for all those years?

A. Not at all. You may be surprised to know that most of our clients have been able to obtain credit again within a year or so after their Chapter 7 bankruptcy filing, and within a year after the completion of their Chapter 13 Plan, assuming they have good employment and they are otherwise credit worthy. This is by no means a guarantee. It is, however, been the experience of many of the clients who have reported back to us.

Q. Will I be able to get my credit back?

A. In most cases, yes. There are several ways, most revolving around the continued payment of a car or truck, or a mortgage payment, or another type of secured creditor such as one that has an interest in furniture or an appliance. We'll be glad to explain this to you at our office visit.

Q. I owe the IRS money. What can a bankruptcy do for me?

A. In some cases, particularly with older income tax debt, the tax debt may be able to be discharged in the bankruptcy. In other cases, the bankruptcy laws may be able to help you reorganize in such a way that your payments would be much lower in the bankruptcy than they might ever be from the IRS or other taxing authorities, particularly in business cases. We'll be able to discuss this with you in more detail at our office visit.

Contesting dischargeability

Some kinds of claims against an individual debtor survive the discharge without the creditor having to do anything to protect the claim. Examples are child support, student loans, criminal restitution and judgments arising from drunk driving.

Other kinds of claims survive the bankruptcy only if the creditor takes action in the short time allowed.

Table of debts dischargeable and non dischargeable in Chapter 7

A creditor whose claim against the debtor was incurred by fraud, dishonesty or other forms of intentional "bad acts" or which is a non support claims which arose in a divorce may contest the discharge of his claim in a Chapter 7 bankruptcy by filing a timely nondischargeability suit and proving, to the satisfaction of the court, that the elements for non dischargeability are met. These adversary proceedings must be filed within 60 days of the first meeting of creditors or the claim is discharged.

If you hold a pre bankruptcy judgment for fraud against the debtor, that judgment may be conclusive in an action for non dischargeability in the bankruptcy court. You still need to file the non dischargeability action; you may not have to prove anything more than the existence of your judgment.

Debts arising in divorce:

When a divorce or separation agreement or judgment creates a debt in favor of the former spouse, those non support obligations to the former spouse may be excluded from the Chapter 7 bankruptcy discharge. 11 U.S.C. 523(a)15.

The creditor spouse doesn't have to prove fraud or dishonesty; he or she must prove that discharge of the debt creates a greater hardship on the creditor spouse than excluding the debt from discharge would create for the debtor spouse.

These non support, marital debts are non dischargeable only if the creditor/spouse files an adversary proceeding within 60 days of the first meeting of creditors. (The rule for support debts is different: they are non dischargeable without action on the part of the benefited party).

More on family issues in bankruptcy

Should I file a non dischargeability action?

Before spending time, money and emotional energy in contesting the discharge of the claim in the debtor's bankruptcy, you need to ask yourself some hard, real - world questions about why you might contest dischargeability. Consider:

What is the likelihood that the debtor will have assets or income in the future from which your claim could be paid, if you were successful in excepting the debt from discharge?

If the debtor is older, low skill or discredited in his field of endeavor, or subject to other substantial non dischargeable claims such as taxes, the chances of recovering money after the bankruptcy to pay your non dischargeable claim are questionable.

What are the costs of litigating the nondischargeability action?

How do those estimated costs compare to the size of the debt you want to collect? What is the risk that you won't prevail?

Did the dishonest or malicious act create the debt or did it occur after you extended credit?

Generally, to prevail, you must show that but for the dishonest act, the debt would not have arisen. Lies about intent to repay the debt, made after the debt was incurred, usually won't support a non dischargeability action,

Remember too that corporations don't get a discharge of their debts in bankruptcy; the assets of the debtor corporation are simply liquidated to pay creditors. So, the concept of "nondischargeability" is meaningless in a corporate bankruptcy case.

The presumptions in non dischargeability actions generally favor the discharge of the debt except perhaps in the case of debts arising from divorce. Consider the costs vs. benefits before spending substantial time and energy contesting the discharge of a particular debt.

Do I need to file an adversary proceeding to protect my claim? Yes, if you claim that the debt arose by reason of the debtor's fraud or other dishonesty.

Some debts are not dischargeable by their very nature such as child support or spousal support. If you are owed support, you don't have to do anything to prevent the discharge of the debt.

If your claim is a non support claim arising in the divorce, you must file an adversary proceeding to preserve your claim. 11 U.S. C. 523(a)(15).

Non dischargeability and claims in the bankruptcy estate.

If there will be a distribution in the case, whether your claim is non dischargeable or not, you must file a claim to share in the distribution. Get the proof of claim form and file it with the court within the time set in the notice

Bankruptcy Preferences

The Bankruptcy Code permits a trustee (or a debtor in possession) to recover from creditors payments made shortly before the bankruptcy filing where the payment gave the creditor more than other, similarly situated, creditors would get through the bankruptcy process.

The policy behind the statute is to diminish the advantages that a creditor might get by litigation or by aggressive collection actions that force the debtor into bankruptcy. That is accomplished by making payments received in the 90 days before the filing recoverable in bankruptcy.

It is neither wrong of the debtor to make a preferential payment nor wrong of a creditor to accept it . The preference statutes are simply an attempt to achieve equity between creditors. Creditors are almost always better off attempting to get payment of their claims from their debtors and dealing with any efforts to recover the money when, and if, such attempts are made in bankruptcy.

Is it a preference?

Bankruptcy Code 547 defines a preference as

Payment on an antecedent (as opposed to current) debt;

Made while the debtor was insolvent;

To a non insider creditor, within 90 days of the filing of the bankruptcy;

That allows the creditor to receive more on its claim than it would have, had the payment not been made and the claim paid through the bankruptcy proceeding.

Note that payments to a fully secured creditor aren't preferences because the creditor didn't get more than he would have in bankruptcy, where the creditor would get the value of the collateral.

A non obvious preference may occur when the creditor converts an unsecured debt to a secured debt by recording a financing statement long after the transaction with which it was associated; by obtaining a writ of attachment; or by recording a judgment lien.

Creditors are best served by the prompt perfection of such liens to lessen the possibility that the advantage obtained by getting the lien is lost in a preference recovery action in a subsequent bankruptcy.

Defenses to preference actions

Defenses to the recovery of a preference are found in 11 U.S.C. 547(c). They include:

In an insider preference action, there is no presumption that the debtor was insolvent when the payment was made and thus the proof of these kinds of actions is sometimes more complex for the trustee.

Chapter 7 Bankruptcy

The Main Objective

Secured Debts

Reaffirmation Agreement


Court Hearing in Your Bankruptcy Case (called the Meeting of Creditors)

The Trustee

Contested Bankruptcy

Full Disclosure

Tax Refunds

Your Credit Record

Cost to file Chapter 7


To get a Discharge from the Court on all of your "dischargeable debts". A discharge means you do not owe a debt. Not all debts are legally dischargeable. For example, income taxes that are less than three years old are nondischargeable. Likewise, child support, student loans, and spousal support are nondischargeable. Certain other debts are nondischargeable.


Some creditors have a right to repossess assets unless they are paid. Auto loans are usually secured by the pledge of your car title as collateral to secure the car loan. Mortgages against real estate are secured by a lien against real estate. Household goods can also be secured against a loan. Secured creditors can repossess cars, household goods, and foreclose on home mortgages if regular payments are not made on these loans. There are three choices to make as to secured debts in a bankruptcy case:

1. Surrender the collateral (the car or house) to the creditor; or

2. Reaffirm the debt with the creditor to keep the collateral (explained below); or

3. Redeem the collateral from the creditor (explained below).


If you have a secured debt, you are required to state, in writing, as a part of your bankruptcy petition whether you intend to surrender, reaffirm or redeem the collateral pledged to secure the loan. This "Statement of Intent" is sent to each creditor and your stated intent should be performed within roughly 45 days.

If you intend to reaffirm on the debt, that means you intend to keep the collateral and keep making regular monthly payments of principal and interest until the debt is paid in full. Reaffirmation agreements are voluntary and they require the creditor's agreement to allow you to reaffirm the debt and keep the collateral. This does not always happen. Some creditors refuse to agree to reaffirmation. In that case, you must surrender the collateral to the creditor. It is important that you understand that you will likely lose the collateral if the creditor refuses to agree to the reaffirmation agreement.


The bankruptcy laws allow a debtor to keep collateral by paying the creditor the fair market value of the collateral pledged to secure a debt. This is very rare since it requires the debtor to pay a lump sum of money to the creditor equal to the fair market value. You can sometimes borrow a lump sum from a different lender. If you can't borrow the lump sum, then you may not be able to redeem the vehicle. We can help you in redeeming vehicles by referring you to a lender.

COURT HEARING IN YOUR BANKRUPTCY CASE (called the Meeting of Creditors)

In each bankruptcy case, the law requires a Court appointed "Trustee" to question each debtor about his or her financial affairs. You must attend a Court hearing for this and bring a picture ID with your social security number to your hearing. You must also bring to your hearing the following documents: tax returns for the last two years, your car titles, pay stubs, retirement account statements and bank statements for the month in which your bankruptcy is filed, any life insurance policies you have and loan closing statements for loans taken within the last three years. Other documents may also be required by the Trustee.

THE TRUSTEE A Trustee is a local attorney who is appointed by the United States Trustee (an arm of the United States Dept. of Justice) to administer your bankruptcy case. The Trustee has certain powers, as a matter of law, to order your full and complete cooperation in your bankruptcy case. There are numerous powers available to a Trustee. It is important that you follow all instructions given to you to successfully complete your bankruptcy case.

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