Some bankruptcy lawyer talked about the flypaper
concept of bankruptcy and debt. What does that mean? My name is Ron Drescher. I’m an attorney practicing bankruptcy and
creditor’s rights in Maryland, Delaware, Pennsylvania and Virginia. And I was that lawyer because I look at debt
as like flypaper. It sticks to you. It sticks to you personally and if you have
property that is subject to a lien because you’ve gotten a judgment against you or you’ve
given a lien to a creditor it sticks to the property. And the magical thing about bankruptcy is
you go through bankruptcy, you file your bankruptcy papers, you go to talk to a trustee, you pay
the filing fee, your honest and truthful, nobody objects to your bankruptcy, you’re
going to get a bankruptcy discharge after 90 to 100 days. And that’s going to have the effect of peeling
that flypaper off of you so that your creditors can’t do anything against you to collect on
that debt. But what most people don’t know is that the
bankruptcy by itself does not peel that flypaper off your assets. So if you’ve been sued and they’ve gotten
a judgment against your pre-bankruptcy, there’s that lien. That flypaper’s sticking to your property,
sticking to your car. All right, so a lot of people think yes I
got sued, yes there was a judgment against me, but I went through bankruptcy and I got
a discharge so that judgment should be discharged from my property. It doesn’t work that way. The flypaper sticks to the asset unless you
affirmatively do something in the bankruptcy case to make it come off. In Chapter 7 about the only thing you can
do is file a motion to say listen, that judgment lien impairs an exemption that I have on that
property so judge, please let me peel that flypaper off. You have more rights in Chapter 13 because
you are agreeing to turn over all your net disposable income for the life of the plan
so if, for example, your house is totally under water and you have a second mortgage
and that second mortgage doesn’t really stick to any of the value of the property, you can
peel off that flypaper represented by that second mortgage and at the end of your Chapter
13 you have gotten rid of that lien against your property. That’s a very important reason why people
do file bankruptcy. You can also do that with a car under the
right circumstances in Chapter 13. But, don’t be misled or confused. You’re going to have to do something affirmative
in the bankruptcy to peel the flypaper off your assets. My name is Ron Drescher. I’m an attorney practicing bankruptcy and
creditor’s rights in Maryland, Delaware, Pennsylvania and Virginia. And if you’re concerned about the impact of
a lien against your property in bankruptcy please pick up the phone and call me. I would love to hear from you.