Welcome to Broumas Law Group LLC

Category: Chapter 13

How Bankruptcy Can Save Your Marriage

The Angry Spouse 

bankruptcy lawyer marylandAs a Maryland bankruptcy attorney who has been practicing for over 30 years we run across many situations that seem to repeat themselves on a regular basis. 

·         The angry spouse who cannot understand why the mortgage, credit cards, car loans were not paid on time.

·         The angry spouse who cannot understand why their partner has incredibly high credit card bills.

·         The angry spouse who is shocked that they were not informed over the course of several months that the bills were becoming unmanageable.


A Story about My Fireman Friend

bankruptcy-firemanMy favorite story is my friend the fireman. He lived in a nice home in a good neighborhood. If you look out front he had a camper, a Harley, and a four wheeler.  He prided himself on paying his bills on time, and on having excellent credit.

The farthest thing from his mind was the possibility that he might have to get help from a bankruptcy lawyer. As is often the case he felt filing bankruptcy is wrong.

My fireman friend was a hard worker, put in overtime and made great money. His spouse also worked and was responsible for the household expenses, kids’ activities and paying the bills.

When they came to see me they were several months behind on the mortgage, the credit cards were “maxed out” and husband was furious, making a scene about the state of the bills and the importance in his family of paying them on time. Filing bankruptcy resolved their financial difficulties and their conflicts.  


Bankruptcy as a Solution for Financial Problems and Personal Relationship Issues

bankruptcy-counselingThis scene repeats itself almost on a weekly basis in our office. The meeting is often more of a marital counseling session to help people who are terribly overloaded with debt to realize that the solution of filing bankruptcy makes sense and will help rebuild the credit  as well as make the family better able to communicate about the  bills and finances.

The angry spouse in most on these cases is either uninvolved with the household expenses and does not attend to all the things that need to be paid of the household. Or in some cases the household is managed with a relatively “separate” budget system when the spouse doing mostly the household chores and duties does not have enough funds to pay for all the things that need to be provided. 


Bring Your Angry Spouse to a Bankruptcy Lawyer

bankruptcy-attorney-marylandIn many cases an experienced bankruptcy lawyer can help deal with the angry spouse by helping the parties communicate better, helping the spouse who gets blamed deal with their very upset partner. A quick glance at the statements will show the cards have been used to pay normal household expenses not things the family does not need. It is usually process of educating the angry spouse so they can accept some responsibility for the problem.


Forcing A Lender to Take Title to Real Estate in Chapter 13

Does Surrendering the Property End the Ownership of the Property?

maryland bankruptcy attorneyAn experienced Maryland bankruptcy attorney can help you force a lender to take title to unwanted real estate. One serious problem some clients encounter is how to get real estate out of their name when they do not want it.  Most clients think once they file a Chapter 7 bankruptcy and express their intention to surrender their real estate that ends their ownership in the house and they are free from the obligations of homeownership. Chapter 13  bankruptcy can provide a better alternative.

There is no question the clients obligations on the mortgage will be discharged (though the mortgage will not be removed from the property) and once the mortgage company forecloses they will not owe the mortgage company a balance. What happens if the mortgage company does not want to foreclose and lets the property sit idle in the clients name for years?


Rent Free Option

Not everyone sees this as a problem. Many clients simply stay in the house until the foreclosure sale is imminent and live “rent free” for months or years. Others who are more enterprising might decide to rent the property out on a month to month basis until foreclosure and use the income to take care of upkeep and as extra income without paying the mortgage. Not everyone is happy with this. For the client who just wants all the mess to be over with and wants to be completely free, or who does not want to live in the house or rent it these options do not work.


Obligations for Real Estate Owners

bankruptcy lawyer marylandWhy should the client care? Real estate ownership carries with it multiple obligations. City water bills, taxes, city and county regulations regarding upkeep, keeping the lawn mowed, clearing trash and debris and possibly boarding the property up. What if unwanted squatters move in and use the home as a drug haven.

Then there are the HOA fees and condo fees. Those pesky HOA and condo fee obligations only are discharged up to the date of the bankruptcy filing. Post bankruptcy fees become due immediately each month until the property is not titled in the client’s name.


Condo Fees

The Bankruptcy Code allows to Court to “provide for the vesting of property of the estate, on confirmation of the plan or at a later time, in the debtor or in any other entity;” 11 U.S.C. § 1122(b)(9). Until recently the bankruptcy courts in Maryland had not had to deal with the issue. We were able to free a client from burdensome condo fees of more than $700.00 per month by providing in the plan that the confirmation of the Chapter 13 plan would fully transfer title to the mortgage company once the plan was approved. The Chapter 13 plan was approved after a hearing.


Other Alternatives

There are other alternatives to this novel procedure. A sale of the property “free and clear” of the mortgage companies interest if the client is no longer living at the property to a buyer who offers less than the amount of the mortgage can also be used to force a change of title.

This option however requires that a buyer be found at some price and often properties that lenders refuse to foreclose are not desirable at any price.


Discrimination by Public and Private Employers Based on Credit Reports and Bankruptcy


Jefferson Bankruptcy

Thomas Jefferson

Lincoln Bankruptcy

Abraham Lincoln

As a Maryland Bankruptcy lawyer I feel we are blessed to live in a country founded on principles that promote the rights of the individual, personal freedom and the right to privacy in our homes and personal lives. This country has nurtured many great political leaders, great entrepreneurs and creative geniuses. Among them one of our founding fathers and drafter of the United States Constitution, Thomas Jefferson, our countries 16th and possibly greatest president, Abraham Lincoln, who helped preserve this great country.

Bankruptcy Lawyer

Ulysses Grant

Bankruptcy Attorney

Henry Ford

Bankruptcy Layer

Walt Disney

bankruptcy attorney

Mark Twain

Our 18th President Ulysses Grant, Great entrepreneurs and businessmen like Henry Ford, who invented the automobile and revolutionized the modern factory to mass produce those cars.

Walt Disney, a brilliant creative businessman who changed the world of entertainment. Great writers such as Samuel Clemens (Mark Twain). All these great people share at least one thing in common: they all had to file bankruptcy. All of these people would be unemployed and unable to make a living in this great country if we decided whether to hire them based on a modern credit report.



business bankruptcy

Donald Trump

One of our current presidential candidates, billionaire, Donald Trump filed bankruptcy for his casino business (Mr. Trump did not file personal bankruptcy however). It is against this backdrop that we start a discussion of a new social cancer: The misuse of people’s private credit information to keep them from working and achieving the American dream. Private employers will often request a credit report as part of their pre-employment process. Most people who are in financial trouble are in that situation because of things that are beyond their control, loss of a job, illness, divorce. Why is it reasonable or fair to deny these people a chance to have a normal life?



maryland bankruptcyLeaving aside the unfairness, we have all seen people in the workplace share confidential information about co-workers with their friends. Is it right to give the clerical staff in H.R. access to information about how much you pay your mortgage company, what cars you drive, where you shop. Who wants to give these minions sitting in cubicles in the back office access to our private information? They are not lawyers, CPA’s or for that matter regulated by anyone. They don’t lose a license if they violate ethical standards. In fact the people handling these private records are not regulated at all.



maryland bankruptcyThis Orwellian practice puts many people in a terrible situation especially when their financial troubles are caused by situations that are beyond their control. Many states are enacting laws to counter this unfair practice. Maryland recently enacted the Job Applicant Fairness Act which limits access to credit reports in the context of employment to employers who are

  1. Required by state of Federal law to check credit of prospective employees;
  2. Federally insured banks;
  3. Certain credit unions;
  4. Employers who are registered as investment advisors with the SEC;
  5. An employer with a bona fide reason for requesting or using the information that is substantially job-related and disclosed in writing to the employee or applicant.

The last category will allow employers to obtain credit reports on employees who are “managerial” setting direction and control of a business, department, division etc.; persons who are fiduciaries; persons with access to expense accounts or company credit cards and persons with access to sensitive personal information.





Bankruptcy law has similar and seemingly broader protections from employer abuse. All Federal, State and local governments are prohibited from discriminating against an individual for filing bankruptcy or because that individual was insolvent before filing the bankruptcy:

a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise, or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act, or another person with whom such bankrupt or debtor has been associated, solely because such bankrupt or debtor is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act, has been insolvent before the commencement of the case under this title, or during the case but before the debtor is granted or denied a discharge, or has not paid a debt that is dischargeable in the case under this title or that was discharged under the Bankruptcy Act.

With respect to any government job it seems pretty clear that the employer cannot in any way discriminate against an employee or a prospective employee.



In 1984 Congress added a new anti-discrimination section targeting private employers. This section of the Bankruptcy code pretty clearly prohibits discrimination by private employers when dealing with employment solely because the person filed bankruptcy or was insolvent before the bankruptcy was filed:

No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt

(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;

(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or

(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.



If you walk down the street and ask passersby what the text of this section means they would tell you its obvious. The person on the street would tell you confidently the employer cannot refuse you employment for filing bankruptcy, because they would be discriminating with respect to employment.At least one Court agreed with this common sense approach. In Leary v. Warnaco, Inc., 251 B.R. 656 (S.D.N.Y. 2000) the plaintiff, Ms. Leary was denied employment based on a credit report that showed she had filed bankruptcy. Deciding in favor of Ms. Leary the court stated:

maryland bankruptcy lawThe plain meaning of the statute does not support such a gloss. Section 525(b) prohibits an employer from discriminating “with respect to employment.” Such language is clearly broad enough to extend to discriminating with respect to extending an offer of employment. Such an application of the plain meaning of the statute makes sense. The evil being legislated against is no different when an employer fires a debtor simply for seeking refuge in bankruptcy, as contrasted with refusing to hire a person who does so. The “fresh start” policy is impaired in either case. A Court should not go out of its way to place such an absurd gloss on a remedial statute, simply because the scrivener was more verbose in writing § 525(a).

Unfortunately this court is in the minority. Lawyers do not always read plain English the way everyone else does. Most courts deciding the issue have gone the other way to say that the language is only clear with regard to existing employees, not prospective employees. They reach this result because the statute that deals with governmental discrimination is very specific when it says the government shall not “deny employment” and the one dealing with private employment discrimination does not.



Despite the controversy the alternative to filing bankruptcy is in most cases much worse. At least when you file bankruptcy your credit starts to improve. The employers using credit reports will now, more than ever be sensitive to the restrictions on the use of credit reports as States such a Maryland restrict the practice.

In most cases there are no viable non-bankruptcy alternatives. If the employer is uses a credit report to make decisions about hiring the bad credit will be there forever unless the client files bankruptcy and wipes it away. Credit counseling does little to fix the problem in 99% of cases. The clients do not have money left over to pay a costly payment plan. Moreover, the plans are not only not affordable, they only deal with a small number of consumer debts, and the program is voluntary for the lenders. Because interest is often still charged by the lenders that do participate it often takes years before any noticeable balance reduction happens. At least if you file bankruptcy and are discriminated against there is a potential for liability based at least on one courts interpretation of the law.



Below is a list of other famous, successful Americans who filed bankruptcy:

cheap bankruptcy attorneycheap bankruptcy lawyerfree bankruptcyfree bankruptcy marylandJohn Connally – Former US Secretary of the Treasury and Former Governor of Texas.

Daniel Webster – Former Secretary of State

William McKinley – 25th United States President

P.T. Barnum – Founder of Barnum and Bailey Circus

free bankruptcy marylandmaryland bankruptcy lawyerbankruptcy lawyerH.J Heinz – Founder of the H.J Heinz Ketchup Company

William Durant – Founder of General Motors

William Fox – Founder of 20th Century Fox Film Corporation



A lot of people who come to our office for bankruptcy help feel very guilty about the fact that they need to go through the bankruptcy process. It is understandable and our experienced Maryland Bankruptcy attorney is here to provide our clients with different bankruptcy and non-bankruptcy options to help our clients resolve their financial mess. Allowing people to get rid of debt and have a fresh start is a great option that many other countries do not offer. You deserve a chance to fulfill your American dream and be successful. Take your first step.


Can Gambling Debts be Discharged in Bankruptcy.

Three bankruptcy Code sections are of concern if the client has incurred substantial gambling debts. The section which excepts from a discharge debts incurred fraudulently, the section barring discharge of debts for willful malicious injury and the general objection to discharge provision regarding transfers of assets with actual intent to hinder delay or defraud creditors or failure to explain loss of assets. The last, Section 727 (a) (2), (3) or (6) of the Bankruptcy Code would be a possible issue if there is a substantial depletion of the clients assets within a year before the bankruptcy filing, either as a failure to explain the disappearance of assets or just as a deliberate attempt to divest himself from the assets in contemplation of filing bankruptcy by gambling them away.

gambling-debtMost casinos will have records of the winnings and losses that were incurred by the client and it is unlikely anyone would deliberately lose substantial assets by gambling them away for the sake of harming their creditors. The Objections to discharge under Section 727 of the Bankruptcy Code are of concern but the client may weather this challenge more easily than the ones addressed below. The client should expect to provide documentation that the funds were actually used and lost. The client should also realize the Chapter 7 trustee might give them a difficult time.

The Casinos who have gambling markers will pose a greater challenge as they often have the gambler sign markers that are much like a check and often have representations by the client that funds are available to pay the marker. These false representations unfortunately might be sufficient to put the client in a bad situation. Often these markers are signed with full knowledge by the casino that the gambler in fact has no funds to cover them. This becomes a matter of proof – Showing the casino did not rely on the representations on the markers and has the gambler sign them deliberately so the casino can later bring a fraud action

The fraud action is made worse when the gambler incurs a mountain of debt far in excess of what he could possibly pay back. A person on a teacher’s salary would have little hope of ever paying back $200,000 in gambling debts. The magnitude of the debt would provide some proof that the client never intended to pay the debt back. This however has not been an insurmountable problem. There are cases where the Court has found that the gambler had an unrealistic but honest expectation that he would win and pay the money back.

gamblingThe final area of concern is the willful malicious injury section in Section 523 (a)(6) of the Bankruptcy Code. This section requires that the client have actual intent to harm the casino. The late Honorable Judge Mannes in out district wrote a helpful opinion in Desert Palace, Inc. v. Rich (In re Rich) (Bankr.Md., 2014) where the court determined that there was no subjective intent by the client to harm the casino. He just had unreal expectations that he would win.

If you have substantial gambling debts you have a serious problem. Those debts may or may not be discharged. To handle the complicated process and litigation that will likely have to be done as part of the bankruptcy you will need to consult an experienced Maryland bankruptcy attorney.

Dealing with Fines in Bankruptcy


One of the worst situations faced by clients is when their driving privileges or tags are flagged as a result of fines or other obligations due to the State of Maryland. Clients at times come to our Maryland bankruptcy attorney complaining that they cannot drive because they are unable to renew their license. This is unfortunate and in some cases may not be something that can be fixed by filing a bankruptcy. The clearest example of what can be remedied if the situation where the license is either revoked or cannot be renewed because the client was in an accident without insurance and there was damage that had to be paid by either the state of Maryland or another insurer. These uninsured motorist cases will easily be resolved by the State once either a Chapter 7 or Chapter 13 is filed.



parking ticket

More difficult are cases where the suspension or flag is due to a fine for having an insurance lapse, parking tickets, camera tickets or toll penalties. The problem discharging these obligations is that the fines are specifically excluded from being discharged in Chapter 7 cases by Section 523(a) (7) of the bankruptcy code.  This section prevents a discharge of civil fines unless those fines are designed to compensate the government entity for the damage caused by the violation. Thus parking fines, insurance lapse penalties and the like are most likely not going to go away with a Chapter 7 case.

In a Chapter 13 case the result for clients may be different depending on the nature of the fines or penalties. The discharge provisions of Chapter 13 are slightly broader than in Chapter 7. In Chapter 13 civil fines and penalties can be discharged based on Section 1328 (a) (2) of the bankruptcy Code. Interpretation of this section is not as simple as it might seem however since one still needs to determine if the fines or penalties are civil or criminal in nature or will not go away for other reasons. Criminal fines, criminal restitution awards will not be discharged under Section 1328 (a) (3) of the Bankruptcy Code.



The fraud provisions and the exclusion from discharge for “willful, malicious injury” still might apply depending on the circumstances. For example if the client is a scofflaw and has so many fines that it shocks the conscience the Bankruptcy court might have a harder time letting these debts get discharged even in a chapter 13 case.



This is a complicated area requiring careful analyses of the particular situation by an experienced Maryland Bankruptcy lawyer before any determination can be made whether the fines or penalties will be dealt with in the bankruptcy and discharged. The other consideration is can whether the State will be required to issue a drivers license or to remove flags. This again will require assistance by an experienced bankruptcy lawyer.


Chapter 7 Bankruptcy for Persons with Above Average Income

In October of 2005, Bankruptcy laws were changed with a view towards making it harder for people with above median income to file a Chapter 7 case. The law before 2005 did not set any specific income guidelines but it in many ways still restricted people with substantial incomes from discharging their debts in Chapter 7 if after deducting reasonable expenses there were funds left over in the budget. If a client does not fit the income and expense requirements they are not allowed to get a Chapter 7 discharge and if they want relief need to file a Chapter 13 bankruptcy.

To understand the difference between the two most common bankruptcy chapters, a Chapter 7 bankruptcy does not have a payment component. You file the case and if everything is in order you ordinarily will finish the process in three and a half to four months and at the end discharge most debts. Chapter 13 is not a bad alternative; it’s a restructuring with a discharge at the end of the process. Chapter 13 is an income based repayment plan. This means in its simplest form the first test for what must be paid in the Chapter 13 is 100% of all disposable income after normal expenses for the 36 to 60 month plan period. In many cases there is very little money left over in the budget and the client ends up using the Chapter 13 to catch up back mortgage and car payments and taxes. Because there are no additional funds left over in the budget the credit card, medical bills etc. get nothing and are discharged at the end of the plan.

A person with high income who wants a Chapter 7 discharge needs to show that 1. His or her reasonable expenses do not leave enough money to fund a Chapter 13 plan. 2. The monthly average of all gross income earned in the six months preceding the filing of the bankruptcy is less than the median income for that State of residence. Once the client goes over the median monthly gross income average the client is restricted to using the arbitrary monthly living expenses permitted in the statute to determine if there is money left to fund a plan.

Most of the arbitrary expenses that are used in the means test are the same ones the Internal Revenue Service uses to determine a person’s ability to pay. Other expenses are set by the bankruptcy statute. Both the arbitrary timing and arbitrary expenses lead to some absurd results in many cases. A well paid school teacher who does not receive pay in the summer might not pass the means test at the end of the school year but may pass in August when school resumes. A real estate agent who makes most of her commissions in the spring might pass in January. This area is complex and full of issues that require the knowledge of an experienced Maryland Bankruptcy lawyer. Just because the client passes on paper does not mean a high income person will be able to weather the scrutiny that will inevitably be given in a close case.

          Not only is the timing of the calculation important and arbitrary. Some of the expenses that can help beat the means test are:

1.     Very large alimony or child support

2.     You owe an enormous tax liability that will not be discharged

3.     You have a very high mortgage expense

4.     Your children have learning disabilities and you have to pay for private school

5.     You have very large car payments

These won’t guaranty that you will pass but they may help get the means test to work.

The expense side also gives rise to some absurd results. The person, who is frugal, buys a small inexpensive car and does not have a loan on that car will get almost no means test deduction for owning that vehicle. The person who bought a $50,000.00 Lexus at 24% interest and still has 50, $850.00 per month payments gets to deduct the standard ownership allowance for the car plus the car payment. Similarly, someone with a $1,000,000.00 mortgage who pays a $4,500.00 a month payment gets to deduct that payment. The homeowner with a normal $250,000.00 house gets the IRS standard allowance. Despite passing on paper however this is an area where an experienced bankruptcy lawyer will make a difference. Even if you pass the requirements on paper there will be many questions that need to be addressed before you will make it through the process. These high income cases are not simple Chapter 7 cases. They require a great deal of experience and skill before and after they are filed.

Stripping a Lien on a Principal Residence in a Chapter 13 Case.

The ability to strip off or eliminate second and third mortgages from the client’s principal residence is one of the things that makes Chapter 13 a great bankruptcy alternative. In a Chapter 13 case a property that has lost value because of the poor housing market can be made into a better more affordable investment. You own a home that is your principal residence. You owe a mortgage and a few years ago when the real estate market was good you took out a home equity line. Now the market has fallen and the value of the house is less than the amount owed on the first mortgage. Now you have a home that has very large negative equity.

In a Chapter 13 bankruptcy you can eliminate that negative equity under the right circumstances. Based on a valuation of the home, A knowledgeable bankruptcy attorney can file a motion asking the court to take that equity mortgage of the home and strip it off the real estate so you no longer have a second or third mortgage. For this to work you need a proper valuation showing that the first mortgage holder is owed more than the value of the home. At Broumas Law Group LLC our bankruptcy lawyer has extensive experience helping Maryland clients save their home, eliminating valueless mortgages and by doing this getting rid of the burdensome payment obligation of that second or third mortgage.

Chapter 13 does not let you change the amount owed the first mortgage on your principal residence. Chapter 13 does  give you the ability to take however many months you are behind with that mortgage company and force them to let you catch those arrears up over a 5 year period. Chapter 13 is an excellent tool to empower you and prevent mortgage companies who have not been cooperative with the loan modification process from taking your home away from you.

The Benefits of Filing Chapter 13 Bankruptcy

Chapter 13 bankruptcy is the way we help someone who is losing their home, car or other property that is about to be lost through foreclosure or repossession to keep those assets and restructure the debt. Chapter 13 bankruptcy differs from Chapter 7 bankruptcy by providing a payment component that allows you to force unfriendly or uncooperative mortgage companies or lenders to let you restart payments and spread the defaulted amounts over as long as 5 years or even to completely restructure the debt. Chapter 13 bankruptcy is also a tool to deal with all other debt leaving you completely current and debt free at the end of the chapter 13 plan. Usually the credit cards, medical bills and other unsecured debt is wiped out with a minimal percentage payment.

Chapter 13 bankruptcy is an alternative if you do not qualify to file Chapter 7 bankruptcy. For example if you have too much income, or received a Chapter 7 discharge within the last 8 years. There are times when life becomes tough and debt starts to mount in a hurry. No matter how bad the situation, there is always an alternative that will lead you back to better days. Filing for Chapter 13 bankruptcy in one such alternative which includes its share of benefits. Just as with Chapter 7 bankruptcy, when you file Chapter 13 bankruptcy you will immediately see an end to foreclosure actions, efforts to repossess cars or trucks, harassing phone calls, law suits, wage garnishment and every other type of collection activity. As is the case when you file a Chapter 7 bankruptcy, your credit score usually starts to improve and you begin rebuilding your credit.

One aspect of Chapter 13 bankruptcy that many consumers can take advantage of is the protection it gives friends, family members and co-workers who may have co-signed with you. Under Chapter 13 the lender cannot go after cosigners and the debt that is cosigned can be restructured and repaid over 5 years. This relief is not available in Chapter 7 bankruptcy since it does not have a payment component.

A Chapter 13 bankruptcy will also bring all your past due taxes current providing a 5 year repayment plan with no interest accruing on the past due amounts while the plan is in place. You also can discharge many old taxes, just as you can in a Chapter 7 bankruptcy case.

If you have a second mortgage on your home a Chapter 13 bankruptcy can in many cases be stripped off the house and you will no longer have to pay it. You also can “cram down” other secured loans by reducing the amount paid in the Chapter 13 bankruptcy plan to the value of the car or truck and reducing the interest paid on the loan to a reasonable amount.

These remedies and powers that you have in a Chapter 13 bankruptcy case require a solid understanding of bankruptcy law to implement and to determine if they will work in your particular case. The Maryland Lawyer at Broumas Law Group can help you determine if Chapter 13 will allow you to take advantage of these benefits in a Chapter 13 bankruptcy case. Proudly serving Baltimore and the surrounding areas, Broumas Law Group continues its commitment to excellence while upholding high standards in the practice of law.

Call Us Today (410) 840-7575