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Grafton Firm, LLC

Baltimore County Bankruptcy Attorneys Protecting Families; Protecting Assets

How Do You Pay For Your Baltimore Bankruptcy?

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If I asked 10 people to tell me one word they thought of when they considered Bankruptcy, 9 of them would say “broke.”  Bankruptcy should involve lawyers and lawyers are not especially cheap.  So, how do you pay for your Baltimore Bankruptcy when you’re broke?  The answer may surprise you.

5 Tips to Pay for Your Baltimore Bankruptcy

  1.  Pay for your Baltimore Bankruptcy with your Tax Refund

    It’s tax refund season.  Many of my clients get at least a small amount of money back in taxes every year around this time.  Most had earmarked it to pay their rising credit card debt, their delinquent mortgage or save their car from imminent repossession.  Typically using the refund to pay for any one of these things leaves other bills unpaid.  Why not use that refund to pay your attorney to help you address all of your financial areas of concern.

  2. Pay for your Baltimore Bankruptcy with Your Minimum Payments

    Inevitably 20-30% of my prospective clients are still struggling and making minimum payments on some of their credit cards.  They do this even while other debts have been languishing or even moving on to litigation.  If you cannot afford to pay your bills while cutting back in order to keep some of the wolves at bay, direct those payments into savings or to your Baltimore Bankruptcy lawyers.  Get out of debt faster.

  3. Pay for your Baltimore Bankruptcy with the help of family

    A large number of my clients receive family assistance to help them afford their attorneys fees.  For the family members, it’s almost as much financial relief for them as it is for my clients.  Often my clients have been dependent upon family for help in fending off creditors, avoiding garnishment or foreclosure, so the final resolution of Bankruptcy will provide relief to the entire family, not just my clients.

  4. Pay for your Baltimore Bankruptcy by cutting unnecessary costs

    You would be amazed at the number of clients who come to see me who are continuing to pay for car insurance and car notes for vehicles that they have no intention of keeping.  If you are maintaining car notes or insurance for an automobile and you intend to surrender that car in Bankruptcy, you should seriously consider voluntarily returning that car ahead of your case.  How?  Call your lender, advise them that you are surrendering the car and request that they give you a drop off location, usually a car dealership.  Take the car to the dealership, leave the car with the keys with a manager at the direction of your lender, take the tags and go.  Remember, before you cancel insurance, turn your tags into the MVA.  Those fines are expensive, and not dischargeable in Bankruptcy!

  5. Pay for your Baltimore Bankruptcy in installments

    Absent family help or a tax refund, very few of my clients can afford to pay attorneys fees and court costs all at once.  So, how can you pay for your Baltimore Bankruptcy?  In installments.  We can set you up on a payment plan to pay off fees over periods ranging from a few weeks to a few months.

3 Things NOT to do to Pay for your Baltimore Bankruptcy

  1. Do not pay for your Baltimore Bankruptcy with your credit card

    It is fraud to use your credit cards when you know you are filing for Bankruptcy.  Even if you intend to “keep paying that card” it will cause more trouble than it is worth.  Besides, how much of a fresh start are you going to get when you come out of Bankruptcy still owing money on a high interest credit card debt.

  2. Do not pay for your Baltimore Bankruptcy with payday loans

    Payday loans are illegal in Maryland.  Unfortunately that doesn’t prevent online payday lenders from preying on desperate Marylanders.  These loans often have contract interest rates close to or above the usury limits, but it’s ultimately the short term nature of the loans that wind up costing so much money.  Before reforms took place in the early to mid 2000’s I would see clients coming in who had literally paid thousands of dollars on a short term $300 payday loan.  The problem is that you borrow $300 until payday, then when payday comes you pay back as much as $450.  But, you can’t afford to pay $450, so you have to borrow another $300.  And next payday you’re paying back $450 again.  In two pay periods you would have paid $300 in interest for a $300 loan.  Now, imagine that you still couldn’t afford that, so you wind up borrowing that $300 again.  So, now you’ve paid $600 and still owe the original $300.  Dangerous.

  3. Do not pay for your Baltimore Bankruptcy by closing out your retirement

    401k’s, IRAs, 403b’s.  Whatever kind of retirement savings you have, it’s often not worth the tax liability to withdraw from those accounts to pay for your bankruptcy attorney.  Sometimes there are no other options, I get that.  What I would implore is that you do not withdraw any more than is ABSOLUTELY necessary.  We are limited in the amount of cash we can exempt and protect in bankruptcy, but unlimited in the amount of qualified retirement accounts we can protect.

 

Dr. Levy Settlements and Bankruptcy

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If you were a victim of the professional abuse inflicted by Dr. Levy, the claims process is picking up steam. Individual claims have been assigned to damage tiers and settlements can now be accepted.  The question remains: how do these Dr. Levy Settlements and Bankruptcy interact?  This is determined by where you are in the Bankruptcy Process.  Is your case closed?  Is it still pending?  Are you preparing to file?  Or simply considering it?

Dr. Levy Settlements and Bankruptcy:  Your Bankruptcy Case is Closed

Your responsibilities here are highly dependent on when you saw Dr. Levy and when you filed bankruptcy.  If you filed for bankruptcy before you saw Dr. Levy then you’re in the clear.  Nothing needs to be done.  The same is true if you saw Dr. Levy while your case was pending.  The problems arise if your bankruptcy case was filed AFTER your claim against Dr. Levy and Johns Hopkins arose, even if you didn’t know it at the time.  In this case, you should re-open your bankruptcy, amend your schedules to include the claim and properly exempt the claim from the case.  If you’ve already listed your pending or possible claim against Johns Hopkins and Dr. Levy, you are set. If not, call your attorney for help in re-opening your case.

Dr. Levy Settlements and Bankruptcy:  Your Bankruptcy Case is Open and Pending

If your bankruptcy case is open and pending, this is a no-brainer.  If you did not previously list your potential settlement with the estate of Dr. Levy and Johns Hopkins, contact your attorney and get this added now.  It can be added and exempted likely with little to no difficulty, but this is a discussion you need to have with your lawyer.  If you decided not to hire a lawyer, I suggest you do so immediately.

Dr. Levy Settlements and Bankruptcy:  You Have Not Filed Bankruptcy…Yet

If you are considering bankruptcy or working towards filing for Bankruptcy, make sure you discuss this situation with your attorney.  If you’re considering using a Bankruptcy Petition Preparer or doing this on your own without a lawyer…Reconsider.  A petition preparer cannot legally give you the advice necessary to properly list and exempt a claim such as this. This is a complicated issue and there may be a lot of money at stake. Get some help from an experienced bankruptcy attorney.

What Can a Baltimore Student Loan Lawyer Do?

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Most people are aware by now that Student Loans are generally not dischargeable in Bankruptcy.  I could discuss for hours what a disaster this has been to the overall cost of education, but this is not the forum for that. As a Baltimore Student Loan Lawyer and Bankruptcy Attorney, one of my jobs is to help people get out of debt, and quite frequently a major part of that debt problem are student loans.

What can a Baltimore Student Loan Lawyer do?

Well, for one, we do more than Bankruptcy.  We call ourselves Baltimore Bankruptcy Attorneys, but really, we’re counselors first.  When Bankruptcy is the right method that is what we suggest.  Sometimes, though, Bankruptcy doesn’t help at all.  Sometimes it’s only part of the solution.  Sometimes it’s the whole solution.

When to File for Bankruptcy?

The test for when Bankruptcy can discharge a student loan is a tough test to pass and of course the opposition from student loan creditors can often make the cost untenable for many people crushed under the weight of student loans.  The first leg of the test is simple to understand, hard to prove:

Can you maintain a minimal standard of living if forced to repay student loans?  If the answer is no, you can move to leg 2.  Will these financial conditions continue for the greater part of your repayment period?  Asked another way, is there a chance you will be able to afford a minimal standard of living and your student loans in the future?  If the answer is again no, let’s move to the third segment.  Have you tried?  Have you really made an effort to repay your loans?  Have you explored all repayment options available and still found the same result?  If the answer is yes, then you’ve got a shot.

If we file for Bankruptcy, can my Baltimore Student Loan Lawyer negotiate a settlement?

Actually, yes.  Oftentimes this is the most cost effective relief you can receive when filing for Bankruptcy on your student loans.  With very rare exceptions, student loan servicers will always fight to defend their collection rights against a bankruptcy discharge, but they have a bottom line as well and if you have a reasonable chance of success they will often negotiate partial loan forgiveness to avoid further litigation of the matter.

 

 

 

How Much Does a Maryland Bankruptcy Cost?

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Our office gets calls every day from Marylanders seeking help with their bills, relief from lawsuits and garnishments, or simply peace of mind.  One frequent question we get is How much does it cost to file a Maryland Bankruptcy?  There are a lot of factors that contribute to the cost of a Bankruptcy.  Here are some of the things to remember when shopping for a Maryland Bankruptcy Lawyer.

You can get a low cost Maryland Bankruptcy Lawyer, but…

Have you ever heard the saying you get what you pay for?  This can be very true when it comes to personal services.  Yes, there are diamonds in the rough, but for the most part this saying holds true.  I’m not suggesting you hire the most expensive Maryland Bankruptcy Lawyer, in fact there are some really expensive attorneys who I wouldn’t wish on my worst enemy.  You also don’t want to cheapest bankruptcy lawyer.  Here is what the too cheap price nets you:

  • Never seeing the attorney except for a few minutes hear and there
  • Having a secretary or para-professional handle all of your paperwork and draft all the necessary forms
  • An attorney who has to take on too large a volume to handle all the cheap bankruptcies effectively
  • A random attorney, coverage attorney, or stranger showing up to Court with you
  • Mistakes, mistakes, mistakes.

All Maryland Bankruptcy shouldn’t cost the same

At The Grafton Firm, we see a wide variety of cases.  We see failing businesses, bankruptcies caused by tax burdens, medical bankruptcies, foreclosures, garnishments.  Additionally, debtors (that’s you, the client) come in all shapes and sizes.  One other major factor is who and how many people you owe.

The Means Test and it’s role in determining how much a Maryland Bankruptcy Costs

It’s not quite right to say that the more money you make the more expensive your bankruptcy becomes, but there is some element of truth to that.  There is a part of a Bankruptcy Petition called the Means Test that only has to be completed by people who’s household income is greater than the median income for households of the same size in the State of Maryland.  This means that someone making $100,000 with a household of three (3) will likely pay more for a bankruptcy that someone who makes $70,000 for the same sized household.  On the other hand, a single person with no kids who makes the same $70,000 would also have to fill out the Means Test, thus making their bankruptcy more complex and more expensive.

So, what is the means test.  Well, it’s a form that further breaks down your income and expenses using usually outdated averages supplied by the Internal Revenue Service.  I usually describe it as equivalent to a slightly more complex tax return in regards to complexity.  And, like a tax return which the average American spends about $350 a year to file, the Means Test can add anywhere from $200 to $500 to the cost of your Bankruptcy.

Things like Taxes, Operating a Small Business, Lawsuits, Liens and Garnishments can factor into the cost of a Maryland Bankruptcy.

Most people believe that the money they owe the IRS isn’t dischargeable in Bankruptcy.  And for the most part they’re right.  We’ve discussed before that sometimes you can get rid of your tax debt.  When taxes are involved it adds a little bit of complexity, for one thing, you can’t just tell from looking at a return if it will be dischargeable.  To be sure, you need to have an attorney who knows what they are doing thoroughly review the return and the Account Transcript for each tax year that may be eligible for discharge and which may soon become eligible for discharge.  If your attorney isn’t looking at the Account Transcripts for your tax debts, then they aren’t doing their job.  There are tools out there that attorneys can use to assist them in this, but these tools charge by the tax year, sometimes as much as $99/transcript.  As you can imagine, these types of costs can add a lot of complexity to what otherwise may be a simple Bankruptcy.

If you’ve operated a small business you are probably very familiar with the level of paperwork involved in filing your business taxes (or adding business income and expenses to your personal return), filing personal property returns, tracking profits and losses, inventories, etc.  Similarly there can be the same burden on your Bankruptcy attorney when you file a personal bankruptcy while operating a small business, or even while closing your small business.

If you’ve been sued and received a judgment you should be aware that a garnishment of your wages can be fast approaching.  If you’re self employed or unemployed, then you need to worry about a lien being placed on your checking or savings accounts.  Even if you have no money in the bank, your bank will usually charge you a service fee for the privilege of being garnished.  I’ve seen banks charge as much as $150.  It gets worse if you own land or a home in the State.  A judgment from Circuit Court is automatically a lien against any land or house (includes condos, time shares, etc) that you own in the same County.  In Baltimore City this even extends to District Court.  Living outside of Baltimore City with a District Court judgment?  You aren’t safe.  Your judgment creditor can take that piece of paper from District Court down to the Circuit Court and record a lien against you there as well.

The number of people or companies to whom you owe money can affect how much your Maryland Bankruptcy costs

There is no magical number of creditors you need to have in order to file a Maryland Bankruptcy.  Nor is there a magical amount of debt.  I frequently tell my clients that it’s not about the number, it’s about the effect.  Some people come in with a handful of large debts (sometimes it’s only 1 or 2) and others come in with dozens of accounts of varying sizes.  One recent case a client had over 70 credit cards, collection agencies, lawyers, utilities, friends, family and banks listed in her bankruptcy petition.  As you can imagine, putting that part of her case together was a bit more involved than a bankruptcy with a mere dozen creditors.  It’s not a major factor by far, but it can definitely affect the bottom line number.

So, How Much is Your Maryland Bankruptcy Going to Cost?

The fact is that a blog post or a short phone interview isn’t the best way to tell you.  Your case could be much simpler than what we normally see or it could be much more complex.  This is one of the reasons we offer a free consultation.  This sit down meeting gives us the chance to learn more about your case, to let you learn more about us, and to ensure that the legal advice we give you actually makes your life better instead of causing more problems.

Give us a call today at 410-870-9315 or click on the “Contact” button hovering over there —–>

We would love to hear from you.  Remember, afternoon and weekend appointments are available in limited spots with advance notice.

 

Don’t Ignore the IRS Advises Baltimore Bankruptcy Attorney

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As I’ve discussed in prior threads, this Baltimore Bankruptcy Attorney has noticed a tendency for people to Bury Their Heads in the Sand when it comes to dealing with their debts.  One of the worst creditors to ignore, maybe the worst, is the Internal Revenue Service.  The IRS is one of the toughest creditors to ignore because they are very prolific.  They send a lot of correspondence and frequently will send items by Certified Mail.  If you continue to ignore them, they will place a lien on your property; this includes your house, your car, your furniture, even your toothbrush.  As a Baltimore Bankruptcy Attorney, I see people get caught with tax liens resulting in higher costs to resolve their debts in a Chapter 13 Bankruptcy.  This can also result in the inability to discharge otherwise eligible debts in a Chapter 7 Bankruptcy where a lien has attached.  Liens also change how the IRS negotiates with you on payment plans and/or Offers in Compromise.

The IRS can also place a levy on bank accounts.  There is no worse feeling than knowing you’ve got enough money in the bank, but having your debit card denied as you try to buy groceries for your family.  I’ve experienced it myself and as a Baltimore Bankruptcy Attorney, quite a number of my clients have experienced this pain as well.  These levies can come on suddenly.  They are unannounced for a reason.  If you knew that your bank account would be locked and the money sent to the IRS you would do the same thing that I would do, empty the account.  This is not the kind of surprise you want to deal with.

Next come the wage levies.  Unlike a credit card judgment creditor, the IRS doesn’t have to stretch very far to figure out where you work if you are employed.  After all, your employer reports your income to them on a fairly regular basis as they pay your income tax withholdings and issue W2’s.  So, for the IRS, the wage levy is a very simple process, and the best part for them is that they don’t even require a judgment first.  Working as a Baltimore Bankruptcy Attorney, I’ve seen what an IRS levy can do to a family.  Suddenly the rent or mortgage falls behind, the car note can’t be paid, and the utility companies are clamoring for their money too.  It’s hard to survive on the hit that an IRS wage levy can put on you.

What happens when you ignore the IRS is the IRS does whatever it takes to get your attention.  Usually with devastating affect.

What other ways do people ignore their problems with the IRS?  One of the most common I’ve seen in my time as a Baltimore Bankruptcy Attorney is by refusing to file subsequent years tax returns.  The reasoning goes, well, I know I owe them and I can’t afford to pay it, so I just didn’t file the taxes.  I cannot stress enough how bad this idea is.  File your taxes.  It doesn’t matter if you still owe, get them filed and get them filed on time.  If you can’t file them on time, file for an extension on time.  Don’t know how?  Ask me!  Seriously.  This is crucial.

The Bankruptcy Code allows for tax debts to be wiped out in Bankruptcy, BUT, only if they were (1) DUE 3 or more years ago, (2) Filed more than 2 years ago, and (3) assessed more than 240 days ago.  (The computations are pretty complex when factoring tolling events, but this is the general rule).  So, let’s talk about number (2) above.  When the rule says FILED more than 2 years ago, that means actually filed by you, the taxpayer.  Not filed by the IRS or any other agency because you didn’t or just wouldn’t file your own taxes.  This means that at best, your failure or delay in filing your returns could postpone your ability to get a discharge.  Well, it gets worse.  3 Federal Circuit Jurisdictions have now adopted a rule that says that if you filed your taxes late, then you will NEVER be able to wipe them out in Bankruptcy.  Fortunately, as a Baltimore Bankruptcy Attorney, we don’t have to follow those 3 jurisdictions, but it may not be long until this becomes the law of the land here as well.

The moral of this post is that you should not ignore the IRS.  If you prepare your taxes and see that you will owe and you can’t afford to pay, file them anyway.  If you’re notified that you owe taxes, don’t ignore them.  Call a Baltimore Bankruptcy Attorney who has discharged more than $2,000,000.00 in delinquent taxes.