New to this...I have a couple of questions

[shrews228]

First, I would like to say a big "Thank you" to everyone here. I have been reading and learning so much from everyone!

My husband and I have 4 kids and live in Maryland. We were going along fine until the credit card minimums went up, now things are very tight. For example, I had less than 100.00 to buy groceries for the week for 6 people! We have 4 credit cards, totaling a little over 35K, with payments adding up to over 900.00 a month! We are facing the harsh reality that we can't go on like this anymore.

My question is hopefully a simple one... so here it goes (thanks!!).

2 of the credit cards are in my name only, totaling almost 17K.
1 credit card is in my husbands name only, totaling 4300.
1 credit card is in both our names, totaling 18K.

We own a home (deeded to both of us) with approx 17k equity, and have a 2007 honda odyssey (which is only in my husband's name). I think that our house would be exempt because MD (I think) allows 21K in equity to be exempt.

In a bankruptcy, can they only go after the assets in our home on credit that we both shared? I'm also confused about how the exemptions work. I have heard that in MD there is no homestead exemption, but also read that they allow 21K in equity to be exempt.

If this doesn't make any sense, I'm sorry. I'm really confused.

Thanks for your help!

Lynda aka Confused in Maryland

[tyson24]

Hi there! I found this for you:

Owner occupied residential property to $21,625 (husband and wife may not double)

Appliances, furnishings, household goods, books, pets, & clothing to $1000 total Clothing, books, tools, instruments, & appliances needed for trade or profession to $5,000

$6,000 of cash or any personal property; must claim exemption within 30 days of levy or attachment
An additional $5,000 in any personal property

Retrieved November 11, 2010 from http://www.legalconsumer.com/bankrup...-law.php?ST=MD

[tcreegan]

Hi shrews228, and welcome!

If you and your husband are filing together (a joint filing) it doesn't matter whose name is where. It all goes into the BK Given your post, a joint filing is the way to go. All the cc debt goes away.

Exemptions are what you get to keep in the BK, they can't take something that is exempt. If you own something that is not exempt or worth more than the exemption amount, it can be taken by the BK trustee and sold to pay your creditors.

Need some more info to help on the car....

Maryland has a $7000 motor vehicle exemption for joint filers.
If you need more, you can use any unused homestead exemption:
21,625 (homestead exemption) - 17K (your equity) = 4,165
4,165 + 7,000 = 11,165 for motor vehicle value.
Is the equity in the Honda (plus any other cars you have) over 11,165?

House:

Maryland does have a homestead exemption: $21,625 (thanks tyson!)
Your equity is 17K. Since you have less equity than the exemption, the BK trustee is not going to take your house and sell it...no profit to give creditors.

What happens to the balance of the loan? Depends....

1) Discharged w/o reaffirmation You are no longer legally liable for the loan balance. The lender lets you stay in the house and keep making payments or the lender forces a sale, if the price is over the loan amt, you get the leftovers.

2) Reaffirmation You and the lender agree to terms (usually the same as you have) and sign papers, your atty or a BK judge approves them, and now you have essentially a new, post-BK contract. You stay in the house, make payments.

(Georgia is a 'non-recourse' state, so no worries about a deficiency)

Median income in Maryland is $9725 a month, are you somewhere close to that?

Anyhow, not sure how useful any of this will be, keep posting questions...

Tom in Colo

[shrews228]

Thank you so much for the information! I appreciate it more than you know. I am a little confused about the homstead exemption, or lack thereof, in MD. In my NOLO book it states that Maryland doesn't have a homestead exemption. Is the 21K value a federal exemption?

We can't take a chance on losing our home, although I don't think we have much equity in it anyway. The only debt they could come after our equity for would be the 1 credit card that my husband and I have together, is that correct? We are deeded "tenants in the entirety".

Thanks again! You guys are awesome. Hopefully when we are through this I can learn enough to help others like you all are doing.

[tcreegan]

Hi again shrews,

Not often, but it does happen, the NOLO book is wrong....here is the relevant MD law:

Md. Code Ann., [Cts. & Jud. Proc.] § 11-504 (f)(II)

(ii) Owner-occupied residential real property, up to the amount under 11 U.S.C. § 522(d)(1), adjusted in accordance with 11 U.S.C. § 104

Basically the state says 'use the federal homestead exemption amount' hence the 21,625 amount.
(but this is just the amount, other fed rules don't apply, inc. the unused homestead wildcard)

The tenants by entirety doesn't really come into play unless one spouse files and the other doesn't

Hope this helps,

Tom in Colo