Bankruptcy in Maine

Are you contemplating bankruptcy or hiring a bankruptcy attorney in Maine? 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 Maine

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 Maine, 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.

While it’s not always required, you can receive a summons to appear in court. Receiving this type of writ can mean a trip to the United States Bankruptcy Court of the District of Maine.

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 Maine 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 United States Bankruptcy Court of the District of Maine describes Chapter 7 as “straight bankruptcy.” Information you will need to include with your initial petition include:

• List of all property

• Amount, frequency, and source of income

• Monthly living expenses, including food and clothing

• List of creditors, including their addresses and nature of their claims

Before taking this step, state and federal governments require credit counseling. A non-profit organization like American Consumer Credit Counseling may have a way to merge debts. These services are usually free, so be sure that you’ve found a trusted or state-approved resource before agreeing to anything.

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 United States Bankruptcy Court of the District of Maine describes Chapter 11 as a reorganization. This type of bankruptcy gives people or businesses time to keep their financial hopes alive while paying debts. To start the process, you will provide at a minimum:

• Voluntary Petition for Non-Individuals

• Attachment for voluntary petition for periodic reports to the SEC

• List of creditors

• Mailing list for lenders

Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Maine 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.

Under federal law, applying for Chapter 13 creates an automatic stay for your debts. This step means that you have protection from lenders chasing after payments because their claims become frozen. This action does have its limitations, however, and it does not last forever. In fact, in some cases, a judge can choose to lift the stay, and the harassing phone calls can start again for Maine residents.

The Bankruptcy Process in Maine

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 Maine 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.

Maine legislation provides dozens of possible exceptions to use during bankruptcy processes. A single filer can have up to $47,500 and $95,000 for joint petitions. Other options to examine and their corresponding equity limits include:

• $750 in jewelry

• $7,500 in motor vehicles

• $5,000 in tools of your trade

• $200 in clothing and home furnishings

• Unlimited value in personal health aids like CPAP machines

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 Maine Lawyer

Hiring a local bankruptcy lawyer in Maine 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 Maine 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 Maine can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Maine state lines.

Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!