Hi, My name is Joel Denning and I’m an attorney – and i’ve practiced law here in Baltimore
county and throughout the Baltimore area and today i’d like to talk to you about
bankruptcy that’s the topic of the day and today i’d like to ask my friend
Rob Stahl, here in Lutherville, MD to help me out some of these questions will joel
let me say first of all thank you for asking
me to join today happy to discuss any questions you have in the bankruptcy area rob i want to hit you up right away with one – it
seems to be the first one that comes up when somebody is about to get their
wages garnished now what does that mean in plain english that means that
somebody has just been sued a writ of garnishment has been put into
their place of employment and their about to lose a large chunk of money and that person calls in quite a frazzled state, wanting to know whether bankruptcy could help them and what’s
involved … can you explain that situation? Well,
first of all by filing a bankruptcy case it stops all legal actions against somebody we’ll call them a debtor it will stop wage garnishments IRS levees bank account seizures we can stop foreclosures on your principal residence. Let me ask you, if a person has already gotten a judgement and now they’re threatening you with the
garnishment that judgment? Can that somehow be stopped?
Can you file a suggestion of bankruptcy to stay those proceedings? how does that work?
Once we file the initial bankruptcy case, then, we’re able to file a motion with the district court where the judgement is or the circuit court and we can stop any further legal action by that judgement creditor. that judgement is eliminated. legal action by the judgment creditor once the bankruptcy is filed the person ultimately gets a discharge of bankruptcy that judgment will be eliminated from
the court record and that debt will be discharged. okay now Of course that will stop the age garnishment.
I don’t want to get too technical because I know there are lots of rules, and they involve whether or not the judgment creditor had the lien
in the husband and wife’s name, whether the home was in the husband or the wife’s name … and there are a lot of questions of
whether or not the lien attaches to the house…. These are kind of difficult questions – Do you think a person would know how to go about dealing with those questions? Or should they seek the help of an attorney? I know you can file a bankruptcy without a lawyer. What is your opinion about that? If you have judgment liens that are attached to your real estate, you
really should have competent legal counsel to file the bankruptcy case and then file the motions to avoid the lien
through the bankruptcy court bankruptcy court well let me keep going with complicated
questions um… we know that there are secure debts and unsecured debts. A secure debt would be something like a car – and the car is the security for the note and the house is collateral for the mortage. When you’re dealing with a car, for example What are you’re options with a car? Let’s assume your “underwater” with the car. so to speak …
We, if you owe substantially more on the car than what it’s worth
you have a number of options: you could surrender the car – in the bankruptcy process and the bankruptcy case would discharge
the debt on that car, so you could walk away in that particular instance. Or there are situations where the Chapter 13 filing, you could cram the debt down and reduce that debt down to the value of the car. in a chapter seven you have the potential to do a redemption of the car. for what it’s worth and in doing so, you can get rid of the portion of the debt that is under-secured on the car. There are a couple of options. although the question that we’re
always asked is ” I wanna keep my car.” if I file bankruptcy, can I keep my car? And, of course, the simple answer to that is YES.
you can keep your car you just have to be financially able to make your car payments What’s the difference between a chapter 7 bankruptcy and a chapter 13? chapter seven bankruptcy is known as a liquidation and a chapter seven assuming you meet certain criteria that
your income is below the median income for the area commonly referred to as the “means testing” and also if you do not have the ability to pay back your secured creditors you generally are going to qualify for chapter seven you have to have a eight year period where you have not filed a previous Chapter 7 so that would be example of what a
chapter seven is. Chapter thirteen his know as a
reorganization uh… in chapter thirteen you are going to reorganize your debts. You’re going to pay some of the debts back possibly all of the debts back, depending on your financial situation. In order to answer that question, Joel, we typically have to do a financial workup with a potential client to see where they fall in the gamut of chapter 7, chapter 13 or there is there are certain
circumstances where it’s best to do a chapter 11 filing for an individual in would seem to me that you were to
follow chapter thirteen you would have to be a wage earner because you have to be making in his payments. is that true? that’s
that’s what the bankruptcy statute says we’ve had many cases were people’s only source of income is social security benefits or pension benefits so and those cases
are still eligible to file under chapter thirteen. let me ask
you this How does the bankruptcy process begin? what was the very first step a person would take? very first step would be coming in… meeting with an attorney
who’s knowledgeable in bankruptcy and bankruptcy filings at that point in time, as I discussed, a
financial work-up needs to be done. Now interrupt you right – here we know in 2005, the bankruptcy reform act was passed and in that statute it was stated that individuals don’t need to use attorneys –
so could a person just do this on their own? Theoretically … you could do that yourself. in situations where you don’t have much to lose or very few assets, things of that nature, very low income that is a possibility in most cases that we deal with people
have assets that they’re trying to protect either try to protect their their
personal residence or they’re trying to protect their bank
accounts pension plans, IRA accounts they’re tryng to protect their cars, their furniture – things of that nature so where do you have assets to protect i certainly would not recommend attempting file case by yourself
Bankruptcy laws are very complex