Bankruptcy in Baltimore, MD
Are you contemplating bankruptcy or hiring a bankruptcy attorney in Baltimore, Maryland? Are you tired of creditors calling for payments you can’t make? Maybe looking for a way to get out of debt and have you exhausted all other options? Then bankruptcy might be the solution you seek. It is a legal option that can erase a portion or all of your debts.
Types of Bankruptcy in Baltimore, Maryland
Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. In Baltimore, MD to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11 or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. You should also consider working with an experienced bankruptcy attorney.
Residents of Baltimore must file for bankruptcy in the U.S. Bankruptcy Court for the District of Maryland.
Chapter 7 Bankruptcy
Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in Baltimore who can help you to decide if a liquidation plan is right for you.
Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car or some other assets. However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.
The Maryland State Bar informs that a chapter 7 filing generally stays open for a period of six months. During this time-period it is illegal for a creditor to try and solicit payment from you. However, it is worth noting that chapter 7 does not wipe away all debt. Student, loans, alimony, child support, and back taxes must all be paid, even if your debt is discharged.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is more complex than other types of bankruptcy. It is often used by businesses and certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, usually four to 18 months. The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.
The U.S. Courts give an overview of chapter 11, although it is mainly used by businesses that desire to pay their debts, but do not want to liquidate their business in order to do so. Under this restructuring of debt, the debtor is allowed to develop a new timeline for repayment without closing the business. The debtor may also be allowed to borrow new money.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Baltimore, MD after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also give you the opportunity to have some or most of your debts discharged.
Maryland Bankruptcy Law states that individuals who do not pass the means test for chapter 7 must file under chapter 13. Chapter 13 bankruptcy is more commonly referred to as debt adjustment, and allows a debtor to file a plan as to how they will pay off the debt from their current income within a given 3 to 5-year time frame. An experienced attorney in Baltimore can be beneficial to helping restructure your debt.
The Bankruptcy Process in Baltimore, Maryland
There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.
In Baltimore to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.
Baltimore residents filing for bankruptcy are required to file the appropriate forms and pay the accompanying fees. You’ll have to decide if bankruptcy can actually alleviate your debt, and which particular type of bankruptcy you will pursue. This is best done with the help of an experienced Baltimore attorney. Then you’ll need to stop paying qualifying debts and file for your exemptions. Remember, for anything to be exempt during the bankruptcy process you must file the appropriate forms. Federal Bankruptcy Law lays out a timeline for these requirements.
Additionally, Maryland has a relatively new homestead exemption which stands at $25, 150, as well as a wild card exemption of $6,000. You can exempt tools of the trade for up to $5,000. You can also protect any animal kept as a pet, up to $1,000.
At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course, usually online or over the phone. Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate of completion from the credit counseling course that you took, the courts will reject your bankruptcy petition.
Work With an Experienced Baltimore, Maryland Lawyer
Hiring a local bankruptcy lawyer in Baltimore during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case, especially which debts that can be discharged or can’t be discharged. An experienced Maryland attorney can also offer you guidance to improve the outcome of your case.
Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy, such as debt consolidation. Though bankruptcy is an attractive solution, it is best as a last resort. Do you need immediate help? Then one of our experienced lawyers in Baltimore can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Maryland state lines.