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Excellence In Legal Service - Serving The Entire State Of Maryland

We have earned the trust of thousands of satisfied clients and have gained experience in thousands of successful Bankruptcy cases since 1973.   We will properly prepare all required documents for you, promptly file them with the court, appear in court with you at your hearing and keep you fully informed throughtout your case.   There is no substitute for trust and experience.

Representing Debtors To Totally Eliminate Debts, Or To Reorganize Debts In Order To Protect Property And To Obtain A Fresh Financial Start

Prompt, experienced and effective representation for all financial issues including, foreclosure, repossession, wage attachments, student loans, federal and state tax matters. In addition to bankruptcy, we provide effective representation for tax problems with the IRS, tax audits, tax liens, tax wage attachments, IRS offers in compromise, IRS installment plan arrangements, and IRS audits.

Our debt relief agency will fully prepare all bankruptcy documents, both before and after your case is filed, go to court with you, and defend you against contested matters from the trustee, your creditors and their attorneys.

We work with you with a workable payment plan and a low fee we invite you to compare. Call, you will see for yourself.

Each case is different and presents different opportunities and challenges. For questions call Jack I. Hyatt 410-486-1800

If you paid money to an unlicensed bankruptcy preparer that did not prepare your documents properly, or gave you any legal advice and you were damaged, we may be able to assist you getting your money back and damages. For questions call Jack I. Hyatt 410-484 - 4900

You know all those bad things you've always heard about bankruptcy. Most of it is NOT TRUE....and I'll prove it ....right here...right now.

Wouldn’t it be a shame if you didn’t find out the truth; and because you didn’t find out the truth, you never filed bankruptcy, and because you never filed bankruptcy, your family had to suffer for it…year in…year out...for no good reason at all? Here are the Top 16 Myths your creditors would natrually like you to believe...and the reason why every one of them is NOT TRUE.

Myths...Lies...Secrets...you have a right to know the truth!

(Simply "Click" on the item below that interests you.)

Intro: Reflections: Understanding myths and the tremendous harm they cause.

Myth 1: Under the NEW bankruptcy law, there is no more help.

Myth 2: Everyone will know you have filed for bankruptcy.

Myth 3: You will lose everything you have.

Myth 4: You will never be able to own anything again.

Myth 5: You will never get credit again.

Myth 6: Filing bankruptcy means you're a bad person.

Myth 7: Filing bankruptcy will hurt your credit for 10 years.

Myth 8: If you're married...both you and your spouse have to file for bankruptcy.

Myth 9: It's really hard to file for bankruptcy.

Myth 10: Only deadbeats file for bankruptcy.

Myth 11: Even if you file for bankruptcy, creditors will still harass you and your family.

Myth 12: If you file for bankruptcy, it may cause more family troubles and may even lead to divorce.

Myth 13: You can't get rid of back taxes through bankruptcy.

Myth 14: You can only file once for bankruptcy protection.

Myth 15: You can pick and choose which debts and property to list in your bankruptcy.

Myth 16: You can't afford to file bankruptcy.

Myth 1:Under The NEW Bankruptcy Law....There's No More Bankruptcy and No More Help (or It's Too Late To File).

NOT TRUE.

Nothing could be further from the truth.

Sure you heard it in the press, but it's just not true. The news media overcooked the whole story. The truth is, you can do almost everything under the NEW law that you could do under the OLD law. In some ways, the new law actually increased the benefits of filing bankruptcy.

As it turns out (and you need to hear this), many clients are getting a better break under the NEW law than they would have gotten under the OLD law!

Want proof? The NEW law made possible our new $99 per month bill consolidation program. This was not allowed under the OLD law. It works so well for clients that we have named it our "Debt Buster" plan. Want to learn more about the new "$99/mo Debt Buster"? (Just click here)

Surprised? So were we, but it's the truth. Find out for yourself. Just call 410-484-4900

That NEW bankruptcy law: We Figured It Out. Want to find out more?

Myth 2:Everyone Will Know You Have Filed For Bankruptcy.

NOT TRUE.

Unless you're famous, chances are very good that the only people who will know about a filing are your creditors and the people you slip and tell.

While it's true that your bankruptcy is a matter of public record, the number of filings is so massive, that unless someone is specifically trying to track down information on you, there is almost no likelihood that anyone will even know you filed.

However, you have to make sure you don’t slip and tell someone. Telling someone that you filed bankruptcy is just good gossip, just like telling someone that you heard so-and-so is getting a divorce or has cancer. So, if you don't want everyone you know to know you filed bankruptcy, you need to keep the information to yourself.

As for newspapers, my experience is that most papers don't include information about who filed bankruptcy, and even if they did, think about it...who would be interested enough to read that stuff? Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

Myth 3:You Will Lose Everything You Have.

NOT TRUE.

Most of our clients don't lose anything.

While laws vary from state to state, every state has exemptions that protect certain kinds of property. Using North Carolina as an example, there are exemptions to protect such things as your house, your car, your truck, household goods and furnishings, IRAs, retirement plans, the cash value in life insurance, wages, and personal injury claims. There is even a "wildcard" exemption of $5,000 per person that can be applied wherever you want it. In those rarer situations where you have more property than can be protected by available exemptions, there is Chapter 13. In Chapter 13, you can even keep this property by paying a higher Chapter 13 plan payment.

At the same time, filing bankruptcy does not generally wipe out or get rid of mortgages or liens against your property. Therefore, if you want to keep a car, truck, home or business equipment that serves as collateral for a loan, you need to keep paying on the debt. If you make these payments and have exemptions to cover any value above what is owed, you can rest assured you will be able to keep these items.

Myth 4: You Will Never Be Able To Own Anything Again.

NOT TRUE.

This is completely false. A surprising number of people believe this to be true. But, not true. The truth is, however, that, in the future, you can buy, own, control and possess whatever you can afford. If you have or can come up with the money, there are no laws prohibiting you from buying homes, cars, trucks, equipment, household goods, etc., once you get what is called your ‘discharge in bankruptcy’. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

Myth 5:You Will Never Get Credit Again.

NOT TRUE.

Actually, quite the opposite is true. You are more likely to get credit after you file, than if you don’t file.

Filing bankruptcy gets rid of debt. Getting rid of debt puts you in a position to handle more credit. This makes you look more attractive to banks, credit card companies and other lenders.

In my experience, unfortunately, it won't be long before you're getting credit card offers again. I say "unfortunately" because I don't want you to get right back in debt again.

At first, the banks, credit card companies and other lenders will want more money down and will want to charge you higher interest rates. However, if you are careful, keep your job, start saving money, pay your bills, and do things that put good marks on your credit report, the quality of your credit will get better and better over time. Generally, if a client has not re-established good credit in 2 to 4 years, sufficient to even buy or refinance a house, it's not because they filed bankruptcy. It generally means that something else has happened after the bankruptcy to hurt their credit.

The truth is that we have had lots of clients buy cars and trucks almost immediately after they finished with their bankruptcy. A few clients have even managed to buy a car or truck while they were still in bankruptcy.

Myth 6:Filing Bankruptcy Means You're a Bad Person.

NOT TRUE.

Quite the contrary. Filing bankruptcy means you’re a good person, acting responsibly.

Everyone wants to pay their bills. Everyone. And everyone wants to take care of their family and provide their family with all the things they need. But, if you can’t do both? Which is more important? Your family, of course. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

Filing bankruptcy gets rid of certain debts. Getting rid of certain debts frees up money to better take care of your family. Freeing up money to better take care of your family lets you put thing back in their proper order: Family first. Putting your family first is good and honorable and noble and doing so means you’re a good person.

There are good reasons why over 750,000 families file bankruptcy every year, and it's not because they’re bad people. Lots of good, honest, hard-working people fall on hard times. Job losses, medical difficulties, family emergencies, bad decisions, failed businesses, etc., are just a fact of life. Let's face it, life can be brutal, and sometimes the money's just not there. The bankruptcy laws were created with this in mind, to make sure that…if you need it…you and your family have a way to escape from the crushing burden of debt, to make sure that your family does come first, and so that you and your family can have a second chance at a "fresh start".

Myth 7:Filing Bankruptcy Will Hurt Your Credit For 10 Years.

NOT TRUE.

You are getting 2 completely different concepts confused with each other. You are getting the fact that bankruptcy is reported on your credit report for up to 10 years mixed up with the effect that reporting will have on your credit. Just because something is reported on your credit report does NOT necessarily mean it will have a negative effect on your credit standing. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

First, let's get one thing out in the open. By the time you need to make an appointment to see a bankruptcy attorney, your credit is already messed up or maxed out…or both…or at least strongly headed in that direction. Think about it. If your credit is already messed up or maxed out, you…more than likely…have no credit for bankruptcy to hurt.

Furthermore, as I’ve previously mentioned, in my experience if you have not re-established good credit in 2 to 4 years after you file bankruptcy, it most likely has nothing to do with the fact that you filed bankruptcy. And it certainly has absolutely nothing to do with the fact that your credit history still shows an old bankruptcy filing.

Myth 8:If You're Married...Both You and Your Spouse Have To File For Bankruptcy.

NOT TRUE.

Not true at all.

We have filed hundreds, and probably thousands of cases, where a husband, or a wife, but not both, filed bankruptcy. In many cases, where husband and wife both have a lot of debt, it makes sense and saves money for them to both file, but it is never a ‘requirement’ under the law. However, in many situations, there is no good reason at all for the second spouse to file. In these situations, we just file the spouse who needs the help, and leave the other spouse completely out of it. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

Myth 9:It's Really Hard To File For Bankruptcy.

NOT TRUE.

With some lawyers, yes. But not in the hands of an experienced bankruptcy attorney.

With our help, filing bankruptcy is easy. The decision to file may be hard, but once the decision is made, filing is easy.

When you want bankruptcy done right, you go to an experienced attorney. We have that experience. We are the largest debtor bankruptcy firm in North Carolina, and not by accident. We pride ourselves in providing good, quality services at reasonable cost, and as a result, we enjoy a steady stream of referrals from satisfied customers.

Myth 10:Only Deadbeats File For Bankruptcy.

NOT TRUE.

Good people, who realize that they have a duty and responsibility to put their families first, file bankruptcy.

Most of the people who file bankruptcy are good, honest, hard-working people, just like you and me, who file as a last resort after months or years of struggling to pay the bills. You’re completely wrong in thinking that you’re a deadbeat if you file bankruptcy. If you need to file, filing bankruptcy is actually one of the most positive, responsible, honorable and noble steps you can take on behalf of your family and your family’s future, happiness and prosperity.

It’s not your fault that you were saddled with overwhelming debt, or you got behind on something as valuable as your house or car, after some life-changing experience, such as a divorce, the loss of a job, a failed business venture, a serious illness, or some family emergency, or because you honestly and mistakenly fell into debt at a young age before you knew better, before you knew anything about budgeting or how to manage money.

Deadbeats are the people who continue to let themselves get crushed by debt year after year, who continue to let creditors use and abuse them, who continue to pay out good, hard-earned money to creditors at the expense of their families, and who continue to just sit back and take it, when there is something they can do about it.

Deadbeats don’t care. The good, responsible people who file bankruptcy do care.

Myth 11:Even If You File For Bankruptcy, Creditors Will Still Harass You and Your Family.

NOT TRUE.

Nothing could be further from the truth.

The minute you file bankruptcy, the Bankruptcy Court issues an order telling all of your creditors to leave you alone, or else.

This order has a name. It is called the "automatic stay", and it is issued pursuant to United States Code 11, Section 362. The automatic stay prohibits you from any and all collections actions. After you file bankruptcy, the creditor is not even allowed to talk to you. In addition, the creditor must stop any collection attempts already started. The automatic stay is very powerful, and puts the full weight of the United States Courts to work for you, to make sure your creditors leave you alone.

Even better, if a creditor violates the automatic stay, you have the right to bring the creditor before the court for Contempt of Court, and to be compensated accordingly. Believe me, Bankruptcy Court Judges do not take kindly to creditors who ignore the automatic stay, and these Judges have been known to punish creditors severely. Very simply, once you file for bankruptcy, creditors must leave you alone or suffer the consequences.

My, how the tables turn, once you reach out for the help that only filing bankruptcy can provide! No more phone calls. No more collection letters. No more lawsuits. No repossessions. No foreclosures.

Can’t you just feel the relief?

Myth 12:If You File For Bankruptcy, It May Cause More Family Troubles and May Even Lead To Divorce. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

NOT TRUE.

The opposite it usually true.

Filing bankruptcy is not the problem. The problem is not being able to pay your bills and not being able to provide for your family. This is what causes the stress and anxiety to build and build.

All good, honest, hard-working people feel a strong need to pay their bills, and not being able to do so causes them to feel tremendous stress. Unless you do something to relieve this stress, it can quickly build to the breaking point…divorce.

Bankruptcy is designed to get you out from under the burden of debt, to protect your property, to lower your stress level and to let you…once again…sleep at night. If your experience is like that of other couples, you will find that filing bankruptcy (and lowering the stress level) can be a crucial first step in bringing the love and caring…not to mention hope…back into your relationship.

Myth 13:You Can't Get Rid of Back Taxes Through Bankruptcy. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

NOT TRUE.

We get rid of back taxes for our clients all the time.

By “taxes”, we mean ‘income’ taxes, and by “old", we mean income taxes more than 3 years old. Under the law, there are 4 or 5 qualifications that have to be met, but once these are met…in bankruptcy…those taxes are gone.

Note: Filing bankruptcy does not get rid of ‘withholding’ or ‘sales’ taxes, no matter how old they are. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

Myth 14:You Can Only File Once For Bankruptcy Protection.

NOT TRUE.

The truth is, you can file and get a “discharge” under Chapter 7 once every 8 years. As for filing a Chapter 7 after filing and getting a discharge in Chapter 13, the wait is 6 years, computed from one “date of filing” to another.

As for filing a case under Chapter 13 of the Bankruptcy Code, the wait is only 4 years after a prior discharged Chapter 7, or 2 years after a prior discharged Chapter 13 case.

If a prior bankruptcy case was “dismissed” as opposed to “discharged”, there is no required wait time between bankruptcy flings, barring a rare court order to the contrary.

Hopefully, however, filing one bankruptcy will be enough to get your life back.

Myth 15:You Can Pick and Choose Which Debts and Property To List In Your Bankruptcy. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

NOT TRUE.

I'm sorry...but you can't. Doing so would be against the law. Under the law...when you file bankruptcy...you have to list all your property and all your debts. Most people want to leave out a debt because it is their intent to keep paying on it. The good news....on this score....is that you can achieve the same goal, even though you have to list the debt. If you want to keep paying on a debt...after bankruptcy....you can. After bankruptcy....you can go back and pay anybody you want. In fact...after you file bankruptcy....there are some debts you have to keep paying on. For instance....if you have a car, truck or house loan....even though you list the debt in your bankruptcy....if you want to keep the car, truck or house....you have to keep paying on the debt. More importantly....you need to know this. As long as you stay current on the loan...and keep the property properly insured....you are protected under the law .... and you get to keep the property....because...under the law...the creditor is stuck with you and can't do anything about it.

Myth 16:You Can't Afford To File Bankruptcy.

NOT TRUE.

Most people think they can't afford to file bankruptcy. They say to themselves: "I can't even pay my bills. How can I afford to pay to file bankruptcy?"

The secret lies in getting your creditors to pay for your bankruptcy. Think about it. If you can get your creditors to pay for it, it doesn't cost you a thing. If it doesn't cost you a thing...you get to file FOR FREE.

Can you afford FREE?

So, how do we get your creditors to pay for it? The answer lies in understanding how the bankruptcy laws work. The bankruptcy laws are powerful and do a lot of things. One of those things is this: Bankruptcy gets rid of certain debts, debts like credit cards, medical bills, personal loans, certain old income taxes, and other unsecured debts*, so you never have to pay those debts...ever again. In fact, bankruptcy is the only thing in the world that actually gets rid of debt...finally, for good and forever. It works like magic..."Now you owe"..."POOF"..."Now you don't"...like as if those debts never existed.

Bankruptcy...so good, you'll think it's ILLEGAL. The bankruptcy laws were put in place by Congress. They're legal and designed to give you the fresh start you and your family need. To give you enough of a fresh start, those laws had to be made powerful...real powerful...so powerful you may well think "This can't be legal"...but it is. Perfectly legal. That's just how the bankruptcy laws work and why we say...over and over..."Scammers and others only promise...but bankruptcy actually delivers."

When bankruptcy gets rid of certain debts, those debts are gone...and gone forever. With those debts gone, you don't have to pay them. Not having to pay them, those payments are "freed up". You can then use this "freed up" money to pay for your bankruptcy. Thank you...Bankruptcy Laws.

When we say that you are getting your creditors to pay for your bankruptcy, we mean it. With their debts gone, you can stop paying them, and then, you can use the money you save..."the creditor's money"... to pay for your bankruptcy.

It's the same thing when we say that "Most of our clients get to file bankruptcy FOR FREE". When your don't have to pay certain creditors, you can use their money for other things, like paying for your bankruptcy. The bottom line is that if you are like most of our clients, filing bankruptcy, in effect, forces your creditors to pay for it. And that makes it FREE for you. So...I'll ask again: "Can you afford FREE?" You may even want to send your creditors a thank you note.

And better than that, the total cost of filing is way less than the total amount of money you save in never having to pay those debts again. We call this "blowback cash". All that money that you don't have to pay...ever again...just comes "blowing back" to you. You use some of it to pay for your bankruptcy...and the rest...it goes right back into your pocket to help pay for the "fresh start" you need and deserve. And...getting you a "fresh start" is what filing bankrutpcy is all about.

You can afford to file bankruptcy.

Reflections:Understanding Myths AND The Tremendous Harm They Cause.

What if everything you’ve ever been told about bankruptcy is a wrong? Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

What if everything you have come to believe about bankruptcy is wrong?

Would you want to know?

What if filing bankruptcy is the absolute best thing in the world for you, your family, your future happiness and your future prosperity?

Wouldn’t you want to know?

It's no secret that our U.S. economy is in serious trouble. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

What if filing bankruptcy is the only thing that is going to save you and your family when the economic "storm" hits, and hits hard?

Wouldn’t it be a shame if you didn’t find out the truth; and because you didn’t find out the truth, you never filed bankruptcy, and because you never filed bankruptcy, your family had to suffer for it…year in…year out?

All of us…every single one of us…make decisions, all day, every day, based on what we believe. Think about it. Every decision we make…from the moment we get up, to the moment we lie back down…to do this, to not do that, to go here, to not go there, to like this, to not like that, etc., etc., is based on what we believe to be true about the world around us and how it works.

What if the beliefs upon which we base our decisions are not true?

The answer is: We will make a lot of costly and harmful decisions.

The problem is that when we really believe in something, for us, it not just a belief. We think it’s the truth. It’s the truth. And, based on what we believe to be true, we make all our life decisions, big or small, today, tomorrow, the next day, and forever. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

For us, what we believe to be true is what life is all about. What we believe to be true is how we understand life and the world around us. It’s what our life is based on; and, it follows, our beliefs serve as the foundation for all our decisions. It’s just the way it is.

If we ‘believe’ that some-thing or some-action is bad or wrong or will be harmful, we do our best to avoid it. If we ‘believe’ some thing or some action is good or right or helpful, we will be drawn to it and choose it. That’s just the way life is for us as human beings. We make choices based on what we believe.

For example, if we believe a type of food is good for us, likely you will eat it. If we believe a type of food is bad for us, that eating it will give us cancer, for example, we will either not eat it or at least feel bad about eating it.

We engage in the thinking process all the time, on all levels, all day long. It’s like we are on automatic. We choose what to do, how to act, what to eat, who to hang out with, where to go, what our goals are, etc., etc., based on what we believe to be true.

The problem comes when…as it turns out…some thing we believe to be TRUE turns out to be NOT TRUE.

And that’s where myths come in.

A myth nothing more than a belief that is NOT TRUE.

Myths are a terrible thing. Myths are terrible because of the harm they cause. Myths cause harm because they give us wrong information about how things in life really work and what those things really mean. This bad information about life forces us to make bad decisions. Bad decisions leave us with bad results. Bad results lock us into bad situations. Being stuck in bad situations steals the goodness out of life. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

The result: A bad outcome, a crappy life, a loss of happiness and future prosperity…all based on a beliefs that weren’t true in the first place.

The really, really, horrible thing about myths is how powerful they are.

Remember, we all make decisions based upon what we believe and when we believe in something, we ‘know’ it to be true, whether it is or not, and once we ‘know’ something to be true, we don’t question it at all. We believe it is true, and that’s it.

That’s the problem with myths. By definition, they are NOT true...they are lies...but because we think they are true, we act on them, and make decisions based on them, without question. As a result, good people make bad life decisions, and suffer the consequences. How horrible!

Making sure you have the TRUTH is what the following information is all about.

It just makes me sick to see good, hard-working people make bad life decisions based on false information. It makes me even sicker to hear about creditors who feed off these myths to keep good, honest, hard-working people, just like you, locked in debt and the pain and pressure that comes with it, stealing from you and your family the future happiness and prosperity you would surely have and rightly deserve.

I’m tired of seeing creditors using myths about bankruptcy to take advantage of people. Somebody has to stop it, and that somebody is me.

The first step is to bust through to the truth behind the myths. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

Busting through to the truth behind the myths takes away the power of the myth as one of your guiding beliefs. Then, with the truth in hand, you can make better decision. Better decisions makes for better results. Better results makes for a better life.

Maybe filing bankruptcy is right for you. Maybe not.

But, you will never know if you just keep on falling prey to the garbage information you have always been told about bankruptcy, if you keep falling prey to the many myths about bankruptcy.

Myths about bankruptcy keep you locked in debt.

Myths about bankruptcy are your creditor’s best friend. As long as you go on believing all the crap you have heard about bankruptcy and how bad it supposedly is, your creditors know they can continue, with no fear, to pound away at you. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

Your creditors know that if you believe these myths, you won’t even consider filing bankruptcy. If you won’t even consider bankruptcy, you won’t ever make an appointment to find out how bankruptcy really works and how much good it can do for your family, how it can get you out of debt and unlock your future, how it can put creditors under control, how it can protect you car, home and other property, and how it can give you and your family the “fresh start” and “second chance” you deserve.

The truth is that…if you can’t pay all your bills or if you can’t get your creditors under control…and you don’t file bankruptcy, you’re probably ...for lack of a better term...screwed…whether you realize it or not. You can’t spend money you don’t have.

The truth is that…if you can’t pay all your bills and you can’t get your creditors under control, filing bankruptcy may be…quite literally…the answer to your prayers.

That’s right…no exaggeration…the answer to your prayers.

Your creditors do NOT want you to read this.

Your creditors know they are better off if they keep you in the dark. If your creditors can keep you in the dark...if they can keep you believing the lies...they can keep you and your family chained in debt. If they can keep you ‘believing’ that you have no choice, that filing bankruptcy is not a solution and that bankruptcy is ‘bad’ or ‘evil’ or ‘dishonest’, that filing bankruptcy won’t really help or that you will still owe the debts afterward, then they can keep you paying, paying, paying…month in, month out...year in, year out...for the rest of your life. Call Maryland Bankruptcy Lawyer Jack Hyatt 410-484-4900.

You deserve better, but it all starts with finding out the truth about bankruptcy.

The bottom line is this: You know all those bad things you've always heard about bankruptcy? Most of it is simply NOT TRUE. Objections to Bankruptcy

The discharge is the "heart of the fresh start provisions" of the Code. H.R. Rep. No. 595, 95th Cong., 1st Sess. 384 (1977) (reprinted in COLLIER ON BANKRUPTCY App. Pt. 4(d)(i)). A discharge under the Code releases a debtor from all debts that arose before the bankruptcy petition, with the exception of certain debts that are "nondischargeable," regardless of whether a claim is filed. See 11 U.S.C. §§ 523, 727(b). A discharge also acts as an automatic and permanent injunction against a creditor's attempts to recover those debts which were a personal liability of the debtor prior to bankruptcy. See 11 U.S.C. § 524(a).

Any creditor or party in interest may object to the entry of the discharg. See 11 U.S.C. § 727(c). Alternatively, a creditor may seek to establish that the debtor's obligation to that creditor should not be discharged. See 11 U.S.C. § 523(c).[ 1 ] Section 523(a) sets out the types of debts that are not dischargeable in bankruptcy. Section 523(c), however, provides that the debtor will be discharged from a debt of a kind specified in subsection (a)(2) (debts for false representations), (a)(4) (debts for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny), and (a)(6) (debts for willful and malicious injury) unless the court determines such debts to be nondischargeable. A creditor objecting to discharge under § 727(a) or dischargeability under § 523(a)(2), (a)(4), or (a)(6) bears the burden of proof by a preponderance of the evidence. See Grogan v. Garner, 498 U.S. 279, 2861991). "Intertwined with this burden is the basic principle of bankruptcy that exceptions to discharge must be strictly construed against a creditor and liberally construed in favor of a debtor so that the debtor may be afforded a fresh start." Hudson v. Raggio & Raggio, Inc. (In re Hudson), 107 F.3d 355, 356 (5th Cir. 1997). For questions call Jack I. Hyatt 410-486-1800

Glossary

Bankruptcy has its own language. Here is a brief definition of those terms used in this site and in the Bankruptcy Code.

Adequate protection: Payment to a secured creditor to protect the value of the creditor's lien during the bankruptcy proceeding from loss due to depreciation or non payment of a senior lien.

Adversary proceeding: A lawsuit filed in the bankruptcy court which is related to the debtor's bankruptcy case. Examples are complaints to determine the dischargeability of a debt and complaints to determine the extent and validity of liens.

Confirmation: The court order which makes the terms of the plan for repayment of debts in a Chapter 11, 12 or 13 binding. The terms of the confirmed plan replace the prepetition rights of the debtor and creditor.

Consumer Debt Debts incurred by an individual for personal, family or household purposes. Taxes are not consumer debts; neither are business loans. The means test only applies to those with primarily consumer debt.

Contingent: Used to describe debts that are not fixed in right at the time, but are dependent on some other event happening to fix the liability.

Conversion: Cases under the Code may be converted from one chapter to another chapter; for example, a Chapter 7 case may be converted to a case under Chapter 13 if the debtor is eligible for Chapter 13. Even though the chapter of the Code which governs it changes, it remains the same case as originally filed.

Assets Assets are every form of property that the debtor owns. They include such intangible things as business goodwill; the right to sue someone; or stock options. The debtor must disclose all of his assets in the bankruptcy schedules; exemptions remove the exempt assets from property of the estate.

Bankruptcy Code. Title 11 of the United States Code governs bankruptcy proceedings. Bankruptcy is a matter of federal law and is, with the exception of exemptions, the same in every state. When federal bankruptcy law conflicts with state law, federal law controls. Bankruptcy Code incorporating changes effective 10/17/05.

Bankruptcy estate: The estate is all of the legal and equitable interests of the debtor as of the commencement of the case. From the estate, an individual debtor can claim certain property exempt; the balance of the estate is liquidated in a Chapter 7 to pay the administrative costs of the proceeding and the claims of creditors according to their priority. More on the estate

Chapter 7: The most common form of bankruptcy, a Chapter 7 case is a liquidation proceeding, available to individuals, married couples, partnerships and corporations. More in Bankruptcy Basics.

Chapter 11: A reorganization proceeding in which the debtor may continue in business or in possession of its property as a fiduciary. A confirmed Chapter 11 plan provides for the manner in which the claims of creditors will be paid in whole or in part by the debtor.

Chapter 12: A simplified reorganization plan for family farmers whose debts fall within certain limits.

Confirmed: A plan of reorganization in Chapter 11, 12 or 13 approved by the court and binding on the parties is said to be confirmed.

Chapter 13: A repayment plan for individuals with debts falling below statutory levels which provides for repayment of some or all of the debts out of future income over 3 to 5 years. More in The Power of 13. Call Howard County Bankruptcy Lawyer Jack Hyatt 410-484-4900.

Charged Off: This is an accounting term that means the creditor does not expect to collect on the debt. It relates to the creditor's taxes. It starts time periods under the Fair Credit Reporting Act. It does not mean that the debt is no longer legally enforceable.

Collateral: The property which is subject to a lien. A creditor with rights in collateral is a secured creditor and has additional protections in the Bankruptcy Code for the claim secured by collateral. The measure of the secured claim is the value of the collateral available to secure the claim: it is possible to have a lien on property that is subject to a senior lien or liens such that the security available to pay the claim is really without value to the junior creditor. The general rule with respect to liens is "First in time, first in right." More on Secured Debts.

Creditor: The person or organization to whom the debtor owes money or has some other form of legal obligation.

Debtor: The debtor is the entity ( person, partnership or corporation) who is liable for debts, and who is the subject of a bankruptcy case. Call Howard County Bankruptcy Lawyer Jack Hyatt 410-484-4900.

Debtor in Possession: In a Chapter 11 case, the debtor usually remains in possession of its assets and assumes the duties of a trustee. The debtor in possession is a fiduciary for the creditors of the estate, and owes them the highest duty of care and loyalty.

Denial of discharge: Penalty for debtor misconduct with respect to the bankruptcy case or creditors as a whole. The grounds on which the debtor's discharge may be denied are found in 11 U.S.C. 727. When the debtor's discharge is denied, the debts that could have been discharged in that case cannot be discharged in any subsequent bankruptcy. The administration of the case, the liquidation of assets and the recovery of avoidable transfers, continues for the benefit of creditors. More on denial of discharge. Call Howard County Bankruptcy Lawyer Jack Hyatt 410-484-4900.

Discharge: The legal elimination of debt through a bankruptcy case. When a debt is discharged, it is no longer legally enforceable against the debtor, though any lien which secures the debt may survive the bankruptcy case.

Dischargeable: Debts that can be eliminated in bankruptcy. Certain debts are not dischargeable; that it, they may not be discharged through bankruptcy or may only be discharged through Chapter 13. Family support and criminal restitution are examples of debts which cannot be discharged. Debts incurred by fraud can only be discharged in Chapter 13. More on which debts can be discharged. Considerations in contesting discharge of a debt.

Dismissal: The termination of the case without either the entry of a discharge or a denial of discharge; after a case is dismissed, the debtor and the creditors have the same rights as they had before the bankruptcy case was commenced. Dismissal is the penalty for many essentially minor infractions of bankruptcy procedures under the 2005 amendments.

Domestic Support Obligation: Debts for alimony, maintenance or support owed to child, spouse or governmental entity that paid for the support of the child or spouse. A new term introduced by the bankruptcy amendments of '05.

Exempt: Property that is exempt is removed from the bankruptcy estate and is not available to pay the claims of creditors. The debtor selects the property to be exempted from the statutory lists of exemptions available under the law of his state. The debtor gets to keep exempt property for use in making a fresh start after bankruptcy. More on Exemptions.

Exemptions: Exemptions are the lists of the kinds and values of property that is legally beyond the reach of creditors or the bankruptcy trustee. The debtor in bankruptcy keeps the exempt property. What property may be exempted is determined by state and federal statutes, and varies from state to state. More on exemptions.

Fiduciary: one who is entrusted with duties on behalf of another. The law requires the highest level of good faith, loyalty and diligence of a fiduciary, higher than the common duty of care that we all owe one another. The debtor in possession in a Chapter 11 is a fiduciary for the creditors, owing loyalty to the creditors and not the shareholders of the debtor.

General, unsecured claim: Creditor's claim without a priority for payment for which the creditor holds no security (or collateral). If the available funds in the estate extend to payment of unsecured claims, the claims are paid in proportion to the size of the claim relative to the total of claims in the class of unsecured claims.

Indemnify: to guarantee against any loss which another might suffer. In bankruptcy, it is used to describe the undertaking of one spouse in a divorce to assume certain debts of the marriage and to see that the other spouse is not forced to pay. Also called a "hold hamrless" clause.

Lien: An interest in real or personal property which secures a debt; the lien may be voluntary, such as a mortgage in real property, or involuntary, such as a judgment lien or tax lien.

Liquidated: A debt that is for a known number of dollars is liquidated. An unliquidated debt is one where the debtor has liability, but the exact monetary measure of that liability is unknown. Tort claims are usually unliquidated until a trial fixes the amount of the liability of the tort feasor.

Means Test: Added to the Code in 2005, the means test is intented to screen out those filing Chapter 7 who are supposedly able to repay some part of their debts. The test is found in Official Form B22a. Debtors who fail the means test may convert their case to another chapter of bankruptcy. More about how the means test works.

Meeting of creditors The debtor must appear at a meeting with the trustee to be examined under oath about assets and liabilities. Creditors are invited but seldom attend. The meeting is sometimes called the 341 meeting, after the section of the Bankruptcy Code that requires it. More about "going to court".

Non dischargeable: A debt that cannot be eliminated in bankruptcy. Non dischargeable debts remain legally enforceable despite the bankruptcy discharge. The Code's list of non dischargeable debts is found at 11 U.S.C. 523. The scope of the discharge in Chapter 13 differs from the discharge in Chapter 7. Discharges compared.

Priority: The Bankruptcy Code establishes the order in which claims are paid from the bankruptcy estate. All claims in a higher priority must be paid in full before claims with a lower priority receive anything. All claims with the same priority share pro rata. Claims are paid in this order: 1) costs of administration 2) priority claims and 3) general unsecured claims. Secured claims are paid from the proceeds of liquidating the collateral which secured the claim.

Priority claims: Certain debts, such as unpaid wages, spousal or child support, and taxes are elevated in the payment hierarchy under the Code. Priority claims must be paid in full before general unsecured claims are paid. Priorities listed. Discussion of priority taxes.

Proof of claim: The form filed with the court establishing the creditor's claim against the debtor.

Perfection: When a secured creditor has taken the required steps to perfect his lien, the lien is senior to any liens that arise after perfection. A mortgage is perfected by recording it with the county recorder; a lien in personal property is perfected by filing a financing statement with the secretary of state. An unperfected lien is valid between the debtor and the secured creditor, but may be behind liens created later in time, but perfected earlier than the lien in question. An unperfected lien can be avoided by the trustee.

Personal property: Assets, such as cars, stock, furniture, etc., that is not real estate or affixed to real property,

Petition: The document that initiates a bankruptcy case. The filing of the petition constitutes an order for relief and institutes the automatic stay. Events are frequently described as "prepetition", happening before the bankruptcy petition was filed, and "post petition", after the bankruptcy was initiated.

Preference: A transfer to a creditor in payment of an existing debt made within certain time periods before the commencement of the case. Preferences may be recovered by the trustee for the benefit of all creditors of the estate. More on preferences.

Pre-petition: Claims or events arising before the commencement of the bankruptcy case, that is, before the filing of the bankruptcy petition. Generally only pre petition debts may be discharged in a bankruptcy proceeding.

Property of the estate: The property that is not exempt and belongs to the bankruptcy estate. Property of the estate is usually sold by the trustee and the claims of creditors paid from the proceeds. More on property of the estate.

Reaffirm: The debtor can chose to waive the discharge as to a debt that is reaffirmed. Generally, the parties to the reaffirmed debt have the same rights and liabilities that each had prior to the bankruptcy filing: the debtor is obligated to pay and the creditor can sue or repossess if the debtor doesn't pay. More on reaffirmation and the alternatives.

Relief from stay: A creditor can ask the judge to lift the automatic stay and permit some action against the debtor or the property of the estate. If the motion is granted, the moving party (but no one else) is free to take whatever action the court permits. Relief can be absolute, for example, permitting the creditor to foreclose on property, or limited, as for example, allowing the recordation of a notice of default. More on relief from stay.

Schedules: The debtor must file the required lists of assets and liabilities to commence a bankruptcy case, collectively called the schedules.

Secured debt: A claim secured by a lien in the debtor's property by reason of the debtor's agreement or an involuntary lien such as a judgment or tax lien. The creditor's claim may be divided into a secured claim, to the extent of the value of the collateral, and an unsecured claim equal to the remainder of the total debt. Generally a secured claim must be perfected under applicable state law to be treated as a secured claim in the bankruptcy. More at Is This Debt Secured?

Trustee: the court appoints a trustee in every Chapter 7 and Chapter 13 case to review the debtor's schedules and represent the interests of the creditors in the bankruptcy case. The role of the trustee is different under the different chapters. More on trustees.

Unsecured: A claim or debt is unsecured if there is no collateral that is security for the debt. Most consumer debts are unsecured. See Is This Debt Secured?

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