Filing for Bankruptcy was something that I never dreamed would “happen” to me.  I worked hard to pay my bills and seldom even had a late payment.  My husband made a good salary.  Life was good.
Then one day I found myself in the middle of a messy divorce and learning about my soon to be ex-husband’s gambling problem.   I ended up with $15,000 in credit card debt (my half) and only one income.  I had 2 small kids and made just enough to pay the mortgage, utilities and keep food in the house. 

Practicing bankruptcy law in the greater Washington, DC area, we often get this question from nervous government employees and defense contractors: "If I file bankruptcy, will I lose my security clearance?"

The answer is: It's not the bankruptcy itself that is the problem. It's the underlying circumstances leading to the bankruptcy that is the determining factor.

 
 
Filing bankruptcy will not, in and of itself, cause a person to lose his/her security clearance.

Tis the time for resolutions. As an attorney specializing in the financial woes of small businesses and the self-employed in DC, VA and MD and drawing from my 22 years of experience, here are three tips to consider as you draw up your list for 2012:

Second Mortgage “Stripping”

One of the advantages of filing bankruptcy under Chapter 13 is that an entirely unsecured second mortgage, or other junior mortgage, can be “stripped” from your homestead or other real estate.  This mortgage is then treated by the Chapter 13 plan as an unsecured claim, the same as a credit card or other unsecured debt.  Consequently, it only has to paid in part rather than being paid in full as for most mortgages.

The answer to whether or not unemployment benefits are dischargeable in bankruptcy hinges on the following:  1) whether the state receives adequate notice of the bankruptcy filing; 2) whether the state upon proper notice brings a timely complaint (adversarial proceeding) in the bankruptcy court, and 3) whether the state wins its complaint and proves that the debtor obtained the unemployment overpayment by fraud or theft as opposed to having made a reasonable mistake.

Various "Robo-Signer" class action suits have been filed across the country. The case of Geoffrey Huber, et al. vs. GMAC, LLC, n/k/a Ally Financial, Case 10-2458-SCB was filed in the Federal District Court of the Middle District of Florida on November 2, 2010.

When you file for Chapter 7 bankruptcy, an automatic stay is put in place.  This is the legal mechanism that stops foreclosure, repossession and collection efforts including wage garnishments. This can be a great relief for you. You can take a breath and work on reorganizing your priorities and assets.