Is Bankruptcy Right For Me? How To Know If It’s Time To File

In this article, you will discover:

• The amount of debt you should have to consider bankruptcy.
• The effect of filing for bankruptcy on your credit score.
• The effect of bankruptcy on home loans and mortgages.

How Much Debt Should I Have To Consider Bankruptcy In Maryland?

The average cost to file bankruptcy starts at about $2,000 for most cases and goes up depending on the type of case. It usually only makes sense to file bankruptcy if you have a minimum of $5,000 to $10,000 in debt.

What Are The Alternatives To Bankruptcy?

A consultation with an attorney should cover what bankruptcy could look like and alternatives like debt settlement. If you have an issue paying your mortgage and are in foreclosure, sometimes you can consider loan modification or foreclosure mediation with the lender.

If you want to let the property, go, you can discuss a short sale or consider a regular sale of your property. There are other options, but it’s best to discuss the situation with a bankruptcy attorney who can tell you your options and help you choose the right solution for your unique circumstances.

How Does Filing For Bankruptcy Affect My Credit Score?

The higher your score when you file, the more of a reduction you may see. It’s difficult to know precisely how much your credit score will be reduced. It also depends on which score you’re looking at.

You will notice little difference if you have a lower score, for example, a score in the 400s or 500s. If you have a credit score in the 700s or 800s, you’ll likely see a drop into the 500 or 600 range.

Will Filing For Bankruptcy Affect My Spouse?

If you’re filing bankruptcy without your spouse, it won’t affect your spouse’s credit. If you have any debts or assets together, that could affect you in different ways.

For instance, if your spouse files for bankruptcy and gets a discharge on debts you owe to them, you’d be the only one responsible for that debt once they get out of bankruptcy. If all of their debts are only in their name, then that shouldn’t affect you unless you’re in particular states that are called community property states, which Maryland is not.

In some U.S. states, you can owe debt for your spouse without signing the agreement. Regarding assets, someone who files Chapter 7 bankruptcy can only keep so many assets. If you own assets with your spouse, there are instances where if they file bankruptcy, your spouse is not allowed to keep everything they own or all their money if they have too many assets.

So, it’s something to be aware of. Most Chapter 7 cases don’t have an issue with losing assets, but there are cases where that happens. It would be good to discuss that with an attorney to ensure you understand how filing for bankruptcy could affect you.

Owner and Senior Attorney Alon Nager is an experienced lawyer with offices in Columbia, Annapolis, and Towson, MD. He’s helped many clients like you navigate the intricacies of bankruptcy law. With over 17 years of experience, he is prepared to provide you with appropriate bankruptcy solutions so that you can get back to business.

Still have questions? Ready to get started? Contact Nager Law Group today to schedule an initial consultation.

We Are Here To Help. Call Today For An Evaluation: (443) 492-9003

What Are The Effects Of Filing For Bankruptcy On Home Loans Or Mortgage Payments?

In Chapter 7 bankruptcy, filing wouldn’t affect those payments unless you let the property go. In that case, when the property is auctioned off at foreclosure, you wouldn’t be responsible for the deficiency balance, the amount the lender doesn’t recover when they sell the property.

Usually, if you have a mortgage, it goes to foreclosure. And if the bank or lien holders don’t get their money in full, they can come after you for whatever they’re not paid. In bankruptcy, we can wipe that out in most cases.

If you file Chapter 13 and you’re behind on your home loan or mortgage payments, you can put those payments that you missed into a repayment plan you can repay over three to five years, along with your other debts. This process can be complicated, and it’s best to speak with a bankruptcy attorney to determine if bankruptcy is a good option for you and your family.

How Do You Help Clients Struggling With The Potential Stigma Of Filing For Bankruptcy?

Many of my clients or potential clients are quite nervous and anxious about their financial situation. My job as an attorney is to analyze their situation objectively, answer their questions, and give them options.

I’ll explain the process and help you understand how filing can benefit you concretely. And if you ultimately feel that bankruptcy is not right for you, I can direct you toward other options, such as debt settlement.

At Nager Law Group, we understand that bankruptcy is a process most people don’t want to go through and can be emotional. It’s a valuable tool that is misunderstood, and there’s a lot of unwarranted stigma about it.

You don’t have to face bankruptcy alone. We’ll guide you through the process and explain your options in full. We’ll be sure to listen to your questions and concerns and do as much as possible to make the process quick, efficient and pain-free.

Still Have Questions? Ready To Get Started?

For more information on Is Bankruptcy Right For Me? How to Know If It’s Time To File, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (443) 492-9003 today.