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Would I lose my home and pets if I file bankruptcy in Maryland?

Silver Spring, MD |

I have $40K in CC debt. I'm currently not behind on payments, but I won't be able to keep that up any longer.

Attorney Answers 7

Posted

What you are able to keep in a bankruptcy depends on whether you can pay the debt on the property (such as your mortgage) & what exemptions are allowed in your state to protect any equity you may have.

As someone with 4 Papillons, I can tell you that I have never seen a Bankruptcy trustee take a family pet, so don't worry. Livestock & breeding animals could be at risk,however.

You can look at the Maryland law providing the exemptions available to you in bankruptcy. They probably are posted at the state's website. Look for Cts & Jud Proc section 11.504 to review the available exemptions. An experienced bankruptcy attorney in your community will be able to advise you on how these exemptions work.

Good luck & Happy New year!

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Posted

Exemptions are basically property you can keep when you file bankruptcy. You'll need to look at Maryland law to see how much equity you can keep in your home. If your home has no equity or is upside down, the point is probably moot. Try Googling "Maryland bankruptcy exemptions."

As far as your pets go, you needn't worry unless they have significant monetary value, i.e. expensive/rare show or breeding dogs, racing grayhounds, etc. Even then, they may fall under some bankruptcy exemption provided by Maryland law.

Good luck!

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Posted

Unless your pets are thoroughbred race horses, I'm betting they are safe. As to the house, whether or not bankruptcy filers can keep any individual piece of property depends on many factors, including how much property is owned and what exemptions are available to cover the property.

Volumes are available on the subject, so here's a summary in response to your general question. In 2005 Congress amended the bankruptcy laws, imposing a "means test". If your household's average monthly income over the last 6 calendar months is less than the census bureau's statistics for current monthly income in your state, then you qualify for a chapter 7 discharge. If not, then you need to look at the means test form, deduct certain IRS allowances for living expenses and some of your actual living expenses to determine whether you pass the means test, qualifying you for a chapter 7. If you do not pass, then you would likely qualify for a chapter 13, which requires that you pay a certain percentage of your debts in a "plan" over the next three to five years.

Even though bankruptcy law is federal, the next question is whether all of your assets, including any equity value in your real estate, car(s) or other property is protected by exemptions available under your state law.

Bankruptcy requires review of your entire financial situation including all debts, income and assets. I highly recommend that you retain an experienced bankruptcy attorney in your jurisdiction to guide you through the complexities of bankruptcy law and procedure.

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This answer is provided for informational purposes only. Actual legal advice can only be provided in an office consultation by an attorney licensed in your jurisdiction, with experience in the area of law in which your concern lies.

http://bankruptcyattorneynh.com/Bankruptcy.asp

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Posted

I just want to add that even if your dogs are rare/show/breeding dogs, it is HIGHLY unlikely that a trustee would seize them. This is also true for horses and most livestock (unless you have beef cattle or the like), because the market for all animals, especially dogs, cats, and horses, is abysmal. The unspoken rule is that trustees don't take anything that eats. Of course, there are exceptions, but it would only be under very unusual circumstances.

I also want to add that you should NOT try and file bankruptcy without an attorney. Bankruptcy law is very complex and highly technical and you can do more harm than good going it alone. The Maryland State Bar Association: http://www.msba.org/, can give you a referral.

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Posted

Here's the problem with Avvo - you have 4 answers so far, all from lawyers not practicing in Md., who therefore have no idea about what you can and can't keep in a Chapter 7 bankruptcy. I'll try to fix that.

First, I am going to assume that Maryland exemptions will apply - which would be the case if you have lived in the state for at least 2 years before filing. If not, you need to determine what exemptions do in fact apply.

Maryland has no specific exemption for pets. However, you can exempt up to $11,000 in pretty much whatever you want (a "wildcard" exemption) - available for any property you own. Most pets have no or minimal economic value, so you can almost certainly exempt them without seriously impacting your ability to exempt other assets.

As of 10/1/10, Maryland has a "homestead" exemption, allowing you to exempt up to $21,625 of equity in your house. You can also use up to $6000 of the "wildcard" on the house, giving you a maximum exemption of $27,625. If you are current on your mortgage (so that you don't lose the house to foreclosure) and after costs of sale there would be less than $27,625 in equity in your house, it should be possible to keep it. Maryland also recognizes tenancy by the entireties, so if you are married, own the house with your spouse, and have no joint unsecured debt, you should be able to keep it.

In any event, the application of these exemptions can be complicated, so make sure you work with an experienced bankruptcy lawyer.

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Posted

Under Maryland law there is a homestead exemption to exempt equity in your home up to approximately $21,000. If there is no equity or equity of less than $21,000 and you can continue mortgage payments to your lenders, you can keep your home. If you cannot continue to make mortgage payments you can do some planning to stay in your home as long as possible. Pets are generally not an asset in bankruptcy and are not something of interest to a chapter 7 or chapter 13 Trustee, unless there is some special value in the pet. Contact a Maryland Bankruptcy Attorney to discuss bankruptcy and your rights in detail.

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Posted

I am unfortunately seeing more and more clients who are concerned about housing their pets. It is so sad. Thankfully filing for bankruptcy should not affect your ability to keep your pets, however filing for bankruptcy is a good time to stop and really think about the cost of your current living situation and if it is affordable. Best of luck to you and please feel free to call me if I can be of further assistance.

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