Relief in bankruptcy by a discharge of liability for indebtedness is designed to give a “fresh start” to “honest debtors.”  No one wants to find themselves in an insolvent or bankrupt state, and no client is ever happy about having to file for bankruptcy.  However, we have never seen a client that was not completely relieved and satisfied after receiving a bankruptcy discharge.

The decision to file for bankruptcy is often a hard choice.  In some cases, there is no satisfactory alternative.  Before filing for bankruptcy, various “non-bankruptcy” alternatives should be considered. However, an important consideration with respect to bankruptcy is that the discharged indebtedness does not have income tax consequences.   If a creditor discounts a claim or “writes it off,” you would have taxable income to the extent the indebtedness is forgiven.   By law, any debt discharged in bankruptcy is not subject to income taxes.

Filing a bankruptcy petition triggers the “automatic stay.”  Upon being advised of the filing, no creditor can contact you or otherwise attempt to collect a debt or enforce an obligation.   Lawsuits, foreclosures and wage garnishments are stayed, and permission of the Bankruptcy Court is required before the stay is lifted.  If a creditor knowingly violates the automatic stay, he can be sanctioned by the Court.

If you are currently facing financial issues, bankruptcy may be the best and most logical way to get a fresh start. Contact our law firm to assess how filing bankruptcy can impact your individual situation.

It is critical to disclose all assets, debts, sources of income, etc., for bankruptcy relief is available only for “honest debtors.”  And, severe penalties and criminal sanctions can be imposed for bankruptcy fraud in addition to a denial of the discharge.  Attorney are required to exercise due diligence to confirm the information provided by a client, e.g., examination of land records, court proceedings, etc.

After the case is filed, a trustee will be appointed and a “meeting of creditors” scheduled.  The meetings are held at the Post Office Building on Main Street in Salisbury, Maryland, and your attendance is mandatory.

The entire process takes about five months. Creditors are given notice that they must file objections to your discharge if any they have on or before a specified date.  Grounds for objecting to a discharge generally, or to the dischargeability of a particular debt, include fraud in connection with the proceedings, obtaining the credit by fraud or misrepresentation, or by incurring debt in the eve of bankruptcy evidencing an intention to “not repay” the obligation from the outset.

Robins & Robins, P.A. based in Salisbury, MD serves the Delmarva Peninsula and Maryland ‘s Eastern Shore including Wicomico, Somerset, Worcester, Dorchester and Talbot Counties.

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128 East Main Street, P.O. Box 506, Salisbury, MD 21801
| Phone: 410-749-3791

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128 East Main Street, P.O. Box 506, Salisbury, MD 21801
| Phone: 410-749-3791


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