Law Offices of Eugene M. Zoglio, P.A.

pic03.jpg (5432 bytes) Bankruptcy is a judicial proceeding governed by federal law under which debtors (individuals or business entities) seek protection from the collection efforts of their creditors. Upon the filing of a bankruptcy petition, the "automatic stay" goes into effect, preventing creditors from taking any further action to collect the debt. As a result, the filing of a bankruptcy petition can stop lawsuits, garnishments, and even foreclosures. In Maryland, an entity seeking bankruptcy protection files its petition for relief with one of Maryland’s two bankruptcy courts (the United States Bankruptcy Court for Maryland, Baltimore Division or the United States Bankruptcy Court for Maryland, Greenbelt Division) depending upon where the debtor resides or conducts its business. While there are five (5) different types of bankruptcy cases, Chapter 7, 9, 11, 12, and 13 proceedings, most individuals seek relief under Chapters 7 or 13.

Chapter 7

pic07.jpg (6281 bytes) A Chapter 7 bankruptcy is often referred to as a liquidation. Chapter 7 bankruptcies are the most commonly filed bankruptcy cases. Under Chapter 7, the debtor is allowed to maintain a certain amount of property, depending upon the type of property and its fair market value. The debtor must surrender all other (non-exempt) property, if any, to the trustee who then sells said property and divides the proceeds of the sale amongst the debtors’ creditors. It should be noted that those debtors who possess little property of any real value, often times are not required to surrender any property. When this occurs, the debtor is said to have filed a no asset bankruptcy and creditors receive nothing.

At the completion of the bankruptcy case, the debtor receives a discharge, relieving the debtor of any further legal responsibility for those debts included in the bankruptcy proceeding. However, the discharge does not eliminate the debt. Therefore, if someone else is responsible for the debt beside the debtor, the bankruptcy will have no effect upon their obligation to pay the debt.

Chapter 13

A Chapter 13 bankruptcy differs from a Chapter 7 bankruptcy in that under Chapter 13 the debtor enters into a repayment plan which provides for the full or partial repayment of certain debts. Only debtors with regular income may receive protection under Chapter 13. In Chapter 13 proceedings, the debtor must submit to the bankruptcy court a repayment plan providing for the repayment of a certain amount of the debtor’s debts.

The debtor must obtain court approval for his or her Chapter 13 Plan. The key to approval is the recommendation of the Chapter 13 trustee. In Maryland there are two Chapter 13 trustees; Thomas L. Lackey, who is the trustee for all Chapter 13 cases filed in the Greenbelt Division and Ellen W. Cosby, who is the trustee for all Chapter 13 cases filed in the Baltimore Division. Under the Chapter 13 plan, the debtor shall make monthly payments to the Chapter 13 Trustee, who will then redistribute the plan payments amongst the participating creditors according to the terms of the approved plan. Chapter 13 Plans last for at least 36 months. However the plan cannot last any longer than 60 months. Upon successful completion of the Chapter 13 plan, the debtor receives a discharge, relieving the debtor of any further legal responsibility for those debts included in the bankruptcy proceeding.

While there are several reasons why individuals file under Chapter 13, most debtors choose to file Chapter 13 bankruptcy cases because they have valuable property which they would lose if they filed under Chapter 7. Often this occurs when the debtor has property, the fair market value of which is greater then the amount of the exemptions available to protect said property or the debtor has fallen behind in paying for debts secured by certain property and the creditor is seeking to maintain possession of said property..

Representation & Cost

The Law Offices of Eugene M. Zoglio, P.A. represents individual debtors in both Chapter 7 or 13 proceedings. Unlike many law firms representing debtors in bankruptcy, at the Law Offices of Eugene M. Zoglio, P.A., bankruptcy clients meet with an attorney at their initial interview, not a paralegal, their petition and pleadings are drafted by (or under the direct supervision of) an attorney, not a paralegal, and their questions are answered by an attorney, not a paralegal. You will have met your attorney prior to the meeting of creditors and, for those debtors who file Chapter 13 bankruptcies, the attorney who attended your meeting of creditors will normally represent you at your plan confirmation hearing.

Federal law established a filing fee for Chapter 7 bankruptcy cases of Two Hundred Dollars ($200.00) and for Chapter 13 cases of One Hundred Eighty-Five Dollars ($185.00). Please note, that at the end of your no-cost initial consultation, the attorney will advise you, based upon the facts of your case, what will be the price of your bankruptcy. You will be under no obligation to retain this office, however, if you indicate during your initial interview that you wish to retain this firm to represent you in bankruptcy, then a retainer agreement will be mailed to you at your home address.