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Benefits of filing Chapter 13 when you own a business
Issues with debt are stressful enough on a personal level, but when you own a business, it can be overwhelming. Luckily, you have options when it comes to filing bankruptcy that can allow you to handle your debt and not lose your business.
Chapter 13 bankruptcy is well worth considering. This bankruptcy option allows you to restructure your debts while keeping your business operational, a key advantage over other bankruptcy chapters.
Retain control of the business
One of the primary benefits of Chapter 13 for business owners is the ability to retain control of your business operations. Other bankruptcy options may require selling off business assets to repay debts. Chapter 13 relies on a manageable repayment plan to repay debts. This enables you to continue running your business.
Prevent repossession
When you file, the court puts an automatic stay in place. This stops all creditor actions, including the repossession of business assets. The stay provides valuable breathing room to reorganize your finances and protect your business assets.
Common reasons seniors may file for bankruptcy in Maryland
Many senior citizens work hard and practice careful financial planning. However, unforeseen circumstances can lead to financial strain.
Sometimes, the strain may prompt some seniors to file for bankruptcy relief in Maryland.
Adult children
Seniors may find themselves financially supporting their adult children, whether through financial assistance with bills, loans or housing expenses. While this support often comes from a place of love and a desire to help, it can strain the senior's financial resources. This is especially true if the children face ongoing financial challenges.
Health care expenses
Seniors often face significant health care expenses, including medical bills, prescription costs and long-term care expenses. Even with Medicare coverage, out-of-pocket costs can accumulate rapidly, particularly for those with chronic illnesses or medical conditions. In Maryland, where health care costs can be high, these expenses can quickly deplete a senior's savings and retirement accounts.
Will I lose my tax refund if I file for bankruptcy?
Understanding how tax filing and refunds work during bankruptcy can be confusing. The rules differ for Chapter 7 and Chapter 13 bankruptcy filings, and they are complex.
Whether you have already filed for bankruptcy or think it may be in your future, you need to understand your tax obligations and how the refund process works. Learning what happens to your refund may help you decide which filing works best for you, but seeking a bankruptcy lawyer's assistance will provide the best information.
Bankruptcy estate
A bankruptcy estate refers to all the property, assets and interests that a debtor possesses at the time of filing for bankruptcy. This includes tangible assets like real estate, vehicles and personal belongings, as well as financial assets like bank accounts, investments and potential legal claims. A court-appointed trustee manages and administers the bankruptcy estate.
In Chapter 7 bankruptcy, a bankruptcy estate comprises the debtor's non-exempt assets, including property and financial holdings. A trustee liquidates these assets to repay creditors.
The consequences of unpaid credit card debt
Credit cards are a convenient and common method of paying for items when you do not have readily available cash. The problem arises when you spend more than you can pay off at the end of the month and accumulate interest.
When interest and late fees add up, it is harder for you to catch up, which perpetuates the cycle, increasing the amount you owe. Besides this, if you find yourself unable to pay off your credit card bills fully and on time, you may face other consequences.
Negative impact on credit score
Failure to pay credit card debt promptly can have a detrimental effect on your credit score. Creditors report late payments to credit bureaus, and as a result, your credit score may decrease. A lower credit score can hinder your ability to secure loans and obtain favorable interest rates. It may even affect employment opportunities that require a good credit history.
Collection efforts
If your credit card debt remains unpaid, creditors may initiate collection efforts. This could involve contacting you directly, either by phone or mail, to request payment. Persistent non-payment may lead creditors to employ debt collection agencies to recover the outstanding amounts.
Understanding Maryland bankruptcy exemptions
When facing bankruptcy in Maryland, knowing what qualifies as exemptions to safeguard your assets can help. The choice between Chapter 7 and Chapter 13 bankruptcy significantly impacts exempted property.
If you are struggling financially but worrying if you will lose your home or car, learning about exemptions in Maryland may ease your mind.
Chapter 7 vs. Chapter 13
In Chapter 7, courts may sell non-exempt assets to repay creditors, potentially affecting your property. However, Maryland's generous exemptions, such as those for homestead and motor vehicles, often allow individuals to retain essential assets.
Chapter 13, on the other hand, involves creating a repayment plan, enabling you to keep your property while gradually settling debts.
If you are able to make regular monthly payments to settle your debts, choosing Chapter 13 can eliminate the worry about losing assets and is probably the better option.
3 possible signs of a foreclosure rescue scam
Navigating a potential foreclosure can be overwhelming. Unfortunately, scam artists often prey on vulnerable homeowners seeking assistance.
Understanding the red flags associated with foreclosure rescue scams helps protect your home and financial well-being.
1. Upfront fees and guarantees
Be cautious of any entity that charges upfront fees for foreclosure assistance. Legitimate assistance programs typically do not require payment until after they have helped you. Be wary, too, of promises that sound too good to be true. Scammers often guarantee they can stop the foreclosure process or ensure loan modification without assessing your specific financial situation. Legitimate assistance providers cannot guarantee specific outcomes, as each case is unique.
2. Pressure tactics and urgency
Scammers often employ high-pressure tactics. The idea is to create a sense of urgency to coerce you into making hasty decisions. Be wary of anyone rushing you to sign documents or transfer ownership of your property. Legitimate assistance processes take time and involve careful consideration of your financial circumstances. If you feel uncomfortable, take a step back and seek advice from reputable sources before proceeding.
Now is the time to file for bankruptcy
Are you drowning in debt and wondering if you should consider bankruptcy? Timing is important when it comes to making this financial decision, and understanding when to file can significantly impact your journey toward financial freedom.
There are several factors that might indicate when bankruptcy is the right decision. By learning more about these factors, you can take this step at exactly the right moment.
Evaluate your financial situation
Determining the right time to file for bankruptcy is a personal decision. Your unique financial circumstances can make all the difference when making this choice. If your debts have become overwhelming, and you find yourself struggling to make ends meet, now might be the time to consider seeking relief by filing for bankruptcy.
Costs and benefits
You might think it is counterintuitive to pay for help when you are already in financial distress. However, the costs associated with filing for bankruptcy often pale in comparison to the potential benefits. Many individuals use their tax refunds to cover the filing fees and associated costs, making it a more manageable process. By weighing the expenses against the potential benefits of achieving financial freedom, you may find that the investment is worthwhile in the long run.
Are you at risk of losing your home?
In the current economic climate, the threat of losing one's home looms large for many Maryland residents.
For example, rising interest rates and inflation can place homeowners in precarious financial positions. Credit card debt and medical expenses do not help, either.
Chapter 13 bankruptcy and home retention
For homeowners who worry about losing their homes, Chapter 13 bankruptcy may provide a viable option. This legal process allows individuals to restructure their debts, including mortgage arrears, into a manageable repayment plan. By filing for Chapter 13 bankruptcy, homeowners may be able to keep their homes while addressing other outstanding debts.
You can also explore government programs, including the Maryland Mortgage Program, that may offer relief options for eligible homeowners.
Rising interest rates and inflation
As interest rates climb, the cost of borrowing money increases, affecting variable-rate mortgages and potentially stretching homeowners' finances. Inflation further compounds the financial strain. If you are struggling, address your debt situation promptly to prevent the risk of foreclosure.
Overcoming the stigma of bankruptcy
The United States Courts reported that there were 387,721 bankruptcy filings in the country in 2022. In a world where financial stability often equates to success, the mere mention of bankruptcy can evoke feelings of shame and defeat.
However, filing for bankruptcy is not always a result of financial mismanagement. The negative stigma is detrimental and can make people who could benefit from filing avoid doing so. Understanding the reasons for filing can help individuals overcome the stigma and make informed decisions that will be in their best interests.
Job loss often triggers bankruptcy
Many people who file bankruptcy have diligently managed their finances, adhered to a budget and responsibly handled their debts in the past. It was only an unexpected job loss that caused them to have issues.
In this situation, the stable ground they once had begins to crumble, and financial security becomes an elusive dream. In these situations, bankruptcy becomes a lifeline rather than a choice driven by recklessness.
What are possible outcomes of negotiating credit card debt?
Data from Experian places the average credit card debt of Maryland residents at $6,668, the fifth highest among the 50 states and Washington D.C., so many people in the state know the burdens of high credit card bills. If you are struggling with major credit card balances, you deserve to know what might happen if you try to negotiate with your credit card company.
There are a variety of outcomes that could result. You may work out an arrangement to relieve your debt and achieve a better balance on your card. Still, there is no guarantee your card issuer will want to negotiate. Even if you do reach a debt relief plan, your credit could still suffer harm.
A lump sum settlement
When you negotiate to pay off your card balance in a lump sum, the card issuer will likely accept an amount that is significantly lower than your balance owed. For example, your issuer may agree to accept 50% of the total amount due if you have been delinquent for many months.
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