I want you to understand the difference between a bankruptcy dismissal and a bankruptcy discharge.  When you’ve filed for bankruptcy, whether in Maryland, Pennsylvania or elsewhere, discharge is the desired outcome of your filing.

A bankruptcy discharge occurs when you have done everything you’re supposed to do.   The court enters a discharge once:

• you have confirmed a bankruptcy plan,

• you have made all of the payments under a plan, or

• when nobody objects to your bankruptcy in a Chapter 7 case,

Once your discharge has been entered, your creditors

1. can’t sue you,

2. can’t get judgments, and

3. cannot enforce their rights against your post-bankruptcy earnings.  I like to call this the “pot of gold at the end of the bankruptcy rainbow.”

Once you have filed a bankruptcy case, the court has jurisdiction over you and your property.  If the court decides that it no longer has jurisdiction, your case is dismissed.

Dismissal occurring after discharge can end up being a favorable development for you.

If dismissal occurs before discharge, you don’t qualify for a discharge.  Dismissal occurring before discharge usually is not a favorable development for you. For more information, read How Does a Maryland Bankruptcy Dismissal Differ from a Discharge?

If you have questions about a bankruptcy being dismissed or discharged, please pick up the phone and call me at telephone number 410-484-9000.  I’d love to hear from you.

The post The Difference between a Maryland Bankruptcy Dismissal and Discharge appeared first on Baltimore Bankruptcy Lawyer.

Former Miss Pennsylvania USA Sheena Monnin claimed that the 2012 Miss USA beauty pageant was rigged.  An arbitrator has disagreed and she has been ordered to pay pageant organizers $5 million for defamation.  Under the Miss USA pageant agreement signed by Ms. Monnin all disputes were to be resolved by an arbitrator, not the courts.

Apparently the former Ms. Pennsylvania did not participate in the arbitration.  This was a grievous mistake. [Ms. Monnin has claimed she was not even aware of the hearing.] By refusing to participate the beauty queen gave up her right to cross examine witnesses and introduce her own evidence in defense of her position.  It is also possible that by participating she may have been able to negotiate a settlement prior to entry of the award. At this point, the pageant organizers may enroll the arbitration award as an enforceable money judgment under either state or federal law, and then begin to seize Ms. Monnin’s assets and earnings.

Ms. Monnin will almost certainly live to regret her ill-chosen words and cavalierly ignoring the arbitration proceeding.  There will be no easy escape from the pain of this award.  Defamation is an intentional tort, and under the federal bankruptcy laws damages arising from intentional torts are not dischargeable.  Therefore the pageant organizers will be able to pursue any recovery from Ms. Monnin’s modeling contracts or any other funds that come her way and she will not be able to find shelter in bankruptcy court.  Her best bet may simply be to take a wage-paying job in Pennsylvania or deposit her earnings in a bank account in Delaware.  Wage garnishments are not available under Pennsylvania law and bank account seizures are prohibited in Delaware.

The post Beauty Queen Cannot Discharge $5 Million Defamation Award In Bankruptcy appeared first on Baltimore Bankruptcy Lawyer.

Frequently, however, the creditors are not circling overhead, just making you uncomfortable. Or else you may have decided to let go of a certain financial lifestyle and you want to finally move on with your life. It takes a lot of soul-searching and sleepless nights  to get to that point so the desire to put the painful past behind is understandable. However, if one of these situations apply to you you may do much better to plan carefully, wait out the storm and file on your own terms:

•  You owe significant taxes.  Income taxes are generally nondischargeable in bankruptcy but there are critical exceptions as you can see in this video. You may have to wait a year or 2 or 3 so that taxes may become dischargeable. If you can hang on during the wait the ability to get rid of the IRS once and for all may completely change your life.
• You have too many assets. In Maryland bankruptcies individual debtors may claim exemptions and keep approximately $21,000 in the equity in their home, $1,000 in household goods, $5,000 in tools of the trade and approximately $11,000 in everything else. (IRAs, 401(k)s, life insurance policies, cash recovery on account of personal injuries are not subject to any limitations).If your assets are worth substantially more than this you may have to take the time to  spend down excess cash or transfer property outright. If that happens you may have to wait up to 3 years to file that bankruptcy case. If you plan properly it will be worth it.
• You have unnecessarily transferred property–cash, stock, or vehicle–to a trusted friend or family member to keep it out of the hands of creditors. This frequently happens when individuals are afraid that the creditors will seize their property but are not aware that they are legally entitled to keep it. If that happens you will have to wait at least a year before filing for Chapter 7 or else you will not get a discharge in bankruptcy.

There are ways to hang on while you wait for the time to pass and be ready to file. If there’s a reason to rush into bankruptcy, you should get it done without procrastinating. But just as frequently, the better course is to calmly survey the landscape and file the case when you and your lawyer have considered all the possibilities.

The post Plan Your Bankruptcy Carefully: 3 Reasons To Wait Before Filing appeared first on Baltimore Bankruptcy Lawyer.