File Bankruptcy in Maryland | Everything You Should Know
The psychological burden of living with bad debt deprives you of your sleep, peace, and joy. When you spend time with your family, show up at work, and walk in the streets, the looming cloud of unpaid debts lingers above you. When you get to that point where creditors are breathing down your neck, you’re facing entrepreneurial loss, and you’re barely getting by, it may be time to consider filing for bankruptcy in Maryland. While filing for bankruptcy is often portrayed negatively, it’s a wise and legal option to avoid further debt, repay what you can, and keep providing for your dependents.
It’s crucial to remember that declaring bankruptcy affects your credit report. As such, it’s best to consider filing for bankruptcy in Maryland when you risk losing all your assets and have debts that you cannot repay. The US Bankruptcy code regulates all processes to be taken when filing for bankruptcy as an individual or business. We recommend hiring a bankruptcy attorney from Bankruptcy Done Right to navigate complex legal terms and file the right paperwork.
Bankruptcy Done Right- Serving Maryland & DC
When dealing with bankruptcy, it’s easy to feel overwhelmed. If you need support to file bankruptcy in Maryland, Bankruptcy Done Right (BNR) attorneys are ready to get you through it. Our firm has helped hundreds of clients make informed financial decisions and overcome debts. When you choose to partner with us, we create a personalized plan and support you until you successfully resolve your financial problems.
Putting Our Clients’ Needs First
We proudly serve residents in Maryland and DC from our office in Bethesda. Our clients are important to us, which is why we focus on a customer-centric approach in all our bankruptcy services. When you reach out through a call or our website, our customer support responds as fast as possible to ensure that you receive the response you need. Customer testimonials evidence our proven track record of excellent customer service.
What’s more, we understand the urgency and the challenge of hiring a Maryland bankruptcy lawyer, which is why we provide free initial consultations. We also know that you’re busy, which is why we are responsive over phone calls to facilitate your decision-making process.
Feel free to reach out at (866) 246-7690 with no obligations.
The Bankruptcy Process In Maryland
If you choose to undergo the bankruptcy process in Maryland, you’ll interact with two chapters – Chapter 7 and Chapter 13.
Chapter 7
Under Chapter 7, you sell your assets and use the proceeds to repay creditors. For business owners, this means liquidating your business. However, this petition process isn’t immediately available to any individual or business that wishes to file for bankruptcy. To qualify for bankruptcy under Chapter 7, the courts analyze your expenses and income for the past six months and compare it to Maryland’s median income. If your income is below the median, you can use Chapter 7. If not, you can file for bankruptcy but under Chapter 13.
After filing your petition, most creditors will freeze collections against you. However, this is a temporary stay as the creditors review your petition and gather before the judge to determine if your petition should proceed. Should your petition succeed, you’re discharged from your debts (except non-dischargeable debts and secured debts), you enjoy protection from collectors and garnishment, and you keep property and wealth you accumulate after bankruptcy.
Unfortunately, you lose most of the property not covered under the Maryland exemptions. Your loan-co-signers may also be stuck with debt unless they seek bankruptcy protection, and if you become bankrupt once again, you’re only allowed to file eight years after the prior filing.
Chapter 13
If you file for bankruptcy under Chapter 13, your bankruptcy lawyer helps you create a plan to repay creditors and avoid foreclosure. It’s an excellent option if you want to retain your property while repaying your debt. Under this process, you can reinstate your mortgage on your home and pay your debts over time.
When filing for bankruptcy under Chapter 13, you need to present a suitable repayment plan. With assistance from Bankruptcy Done Right, you can develop a plan that settles your monthly expenses and bills. Your plan should show how your remaining money is divided among non-dischargeable debts, unsecured debts, and secured debts.
Additional Requirements
If you’re an individual filing for bankruptcy, you’re required to take a credit counseling course within six months before filing for bankruptcy. After filing, you have to take a financial management course. These courses are excellent because they provide essential financial knowledge to help you understand debt, your financial situation, and your future.
To file a successful petition, you need to gather several documents, such as:
- Assets and liabilities documents
- Income and expenditure statements
- Contracts and leases
- Tax records
- Counselling course certificate
- Proof of payment from an employer
- Federal or state tuition
- A list of creditors
Your attorney from Bankruptcy Done Right helps you gather or relevant documents. You also need to determine which of your property should be protected from creditors. The Maryland exemptions charts offer a detailed list of properties up the dollar amount. Once all documents are in place, your Maryland bankruptcy attorney delivers your petition to the courts. The judge and the creditors review your petition and financial information to determine if you’re honest. If your petition raises suspicion, your file for bankruptcy may fail.
Usually, your application for bankruptcy comes with a fee, which is possible to waive under Chapter 7 or pay in installments. However, you cannot waive the fee when filing for bankruptcy under Chapter 13.
Usually, after a successful petition, the court takes charge of your assets and debts, except exempt properties. A court-appointed trustee oversees your case and ensures that your creditors are repaid as much as possible.
Non-dischargeable Debts
If your petition is successful, it’s possible to have your debts discharged. However, there are non-dischargeable debts under Chapter 7 and 13. This means that you have to pay these debts in full. They include:
- Alimony, child support, and other family-related support
- Debts incurred during a personal injury accident
- Tax debts
- Student loans
- Traffic violation debts and any obligations from criminal restitution
- Debts incurred through fraud
- Any debts you forget to list when filing for bankruptcy
