Our Baltimore bankruptcy lawyers want you to know about bankruptcy law limitations
Our Baltimore bankruptcy lawyers strongly believe in fighting for the rights of individuals who are experiencing financial problems. Through their years of experience as Baltimore bankruptcy lawyers, they understand that the vast majority of individuals file cases due to unforeseen and overwhelming circumstances such as uninsured medical bills.
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Our Baltimore bankruptcy attorneys have predicted that with the current bankruptcy laws consumers may have a hard time erasing their debts. Our Baltimore bankruptcy attorneys report that the bankruptcy laws may prevent many Americans from qualifying for a "fresh start" Chapter 7 case in which debts are discharged.
Our Maryland bankruptcy attorneys have predicted that many of their clients may be forced to file Chapter 13, which requires payment toward debt under a court-ordered payment schedule over three to five years.
Consider these bankruptcy law provisions
The bankruptcy laws call for financially troubled Americans to be subjected to a "means test" to determine their eligibility for a Chapter 7 filing. Generally, consumers whose incomes are higher than the median income level in their state, and who have disposable income of $100 a month that may be used to repay $6,000 over five years, might be pushed into a repayment plan under Chapter 13.
The means test has been characterized as "over-inclusive" and "painfully inflexible." It follows guidelines set up by the IRS for tax evaders, and imposes severe limits for allowable expenses: about $200 a month for food and less than $800 for housing and utilities, for example. In addition, the means test may subject consumers to lengthy and expensive hearings in the courts.
Some assets may be protected from creditors. For example, any contributions made to a 529 college savings plan more than two years prior to filing for bankruptcy may be exempt from assets available to creditors. A $5,000 limit applies to contributions made more than one year but less than two years prior to filing for bankruptcy.
While homes are exempt in certain states, the law's provisions require homeownership for a minimum of 40 months. In other words, if you file for bankruptcy within 3.3 years of purchasing a home, it may no longer be off limits to creditors, even if the home is situated in a state that offers the homestead exemption.
Only a few new areas of exemption seem to be involved. Up to $1 million in retirement benefits could be shielded from creditors. And an unlimited amount of money may be stashed away in state-sponsored asset-protection trusts (available in five states) without interference from creditors.
If you would like to know more about how the bankruptcy laws could affect your situation, contact a legal professional near you. All you need to do is call our toll free number, 1 (877) 349-1309. Or, fill out our secure online case evaluation form with a few details about your situation. All information is kept strictly confidential. One of our legal professionals should contact you to set a convenient time for a free consultation.
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The purpose of this web site is to help you learn everything you need to know about bankruptcy, the process, your bankruptcy attorney and your legal rights. The best place to start is with the U.S. Bankruptcy Code. It delivers protection to people in financial jeopardy who are suffering under mountains of debt. Bankruptcy is your legal right.