Bankruptcy in Maine
Living paycheck to paycheck in Maine and still falling behind? When debt keeps piling up and there’s no end in sight, it’s easy to feel like you’re out of options. Whether it’s credit cards, medical bills, or past-due mortgage payments, unmanageable debt doesn’t just strain your wallet—it drains your peace of mind.
Bankruptcy might be the solution you didn’t know you had. Maine law provides strong protections to help you hold on to essential assets. From your home and vehicle to retirement accounts and household goods, Maine’s exemption laws can help you protect what matters most.
A skilled Maine bankruptcy attorney can help you understand your rights, file with confidence, and guide you toward long-term financial stability. Request a referral today and take the first step toward reclaiming control.
Types of Bankruptcy in Maine
Bankruptcy is a legal option designed to give individuals and businesses in ME the chance to recover from serious financial setbacks. By eliminating or restructuring debts, it offers a way to stop the spiral and regain control.
If you’re exploring bankruptcy, your financial goals, income level, and the assets you want to keep will help determine the right fit. Chapter 7 may offer quick relief through liquidation, while Chapter 13 allows for a structured repayment plan. Chapter 11 is typically used for businesses or individuals with complex assets or debts. Since each chapter comes with its own rules and benefits, consulting a bankruptcy attorney can help you navigate the options and make the most informed decision.
In Maine, bankruptcy cases are handled by the United States Bankruptcy Court for the District of Maine. The court has locations in Portland and Bangor and oversees all Chapter 7, 11, and 13 filings across the state.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy can be a practical solution for many people in Maine who need a fresh start. It’s often a good fit for individuals with limited or no disposable income who are unable to keep up with their financial obligations.
But before moving forward, it’s important to take an honest look at your income, debts, and the assets you might be required to give up. A conversation with a local bankruptcy attorney can help you weigh the pros and cons and decide if Chapter 7’s liquidation process makes sense for your situation.
Most people who qualify for Chapter 7 have either experienced a major drop in income or are dealing with debt that has become too large to manage. This type of filing can clear unsecured debt like credit cards and medical bills, but it may come at the cost of certain non-exempt property.
Once your case is filed, the court issues an automatic stay, which temporarily stops most collection efforts—including wage garnishments and foreclosure. Keep in mind, though, that not all debts are covered. Payments like child support and criminal restitution remain enforceable, even after your bankruptcy is complete.
To qualify for Chapter 7 bankruptcy in Maine, you’ll need to pass the means test—a calculation that determines whether your income is low enough to be eligible. The first step compares your household income to the state median. If you earn less than the median, you can typically file without further review.
As of the latest data, the median income in Maine is $63,307 for a single filer, $79,055 for a household of two, $94,005 for three, and $113,674 for a family of four. Households with more than four members can add $9,900 per additional person. If your income exceeds these thresholds, you’ll need to complete additional forms.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is a more involved process, typically reserved for businesses or individuals with complex financial situations and substantial assets. Rather than wiping out debt immediately, it focuses on restructuring what you owe through a reorganization plan that’s approved by the court.
This plan often spans several months—sometimes more than a year—and is designed to make repayment manageable without forcing the sale of your property. One of the key advantages is that it allows you to continue operating your business or maintaining control over your assets while working out new terms with your creditors to stay on track.
Filing for Chapter 11 bankruptcy in Maine requires a detailed overview of your financial condition and a clear plan for how you intend to reorganize your debts. This chapter involves more complexity than others, so the documentation must be accurate and thorough from the start. To begin the process, you’ll need to file several forms with the court, including:
- Voluntary Petition (Official Form 101)
- Schedules A/B through J – listing all assets, liabilities, income, and expenses
- Statement of Financial Affairs (Official Form 107)
- Creditor Matrix – a complete list of creditors with current contact information
- Summary of Assets and Liabilities
- Attorney Disclosure Statement – if you’re working with legal counsel
- Recent business or personal financial statements – such as profit-and-loss statements or balance sheets
- Proposed Reorganization Plan and Disclosure Statement – typically filed after your case begins
Chapter 13 Bankruptcy
Chapter 13 bankruptcy, often called a wage earner’s plan, gives individuals in ME the chance to reorganize their debts without giving up important property. Once your petition is filed, the court appoints a trustee to review your income, debts, and assets to determine what you can reasonably afford to repay.
From there, you’ll follow a court-approved plan that typically lasts three to five years. This plan is tailored to your financial situation and allows you to catch up on past-due obligations over time. If completed successfully, the remainder of certain unsecured debts may be discharged, giving you a clean slate to move forward.
The process also comes with more long-term oversight. After filing, you’ll begin making monthly payments to a court-appointed trustee, who then distributes those funds to your creditors. The plan usually lasts three to five years, and during that time, you’re protected from most collection actions.
The Bankruptcy Process in Maine
Deciding to file for bankruptcy rarely feels like perfect timing—but if your financial obligations are more than you can realistically repay within five years, it may be the most responsible move. Bankruptcy can pause collections, offer protection for key assets, and provide a structured way to reset your financial path.
To get started in Maine, you’ll need to compile a full and accurate breakdown of your finances. This includes your current income, regular expenses, outstanding debts, and a list of all property you own. If anything is missing or inaccurate, it can delay your case—or cause it to be dismissed entirely. Thorough preparation is key.
In Maine, bankruptcy follows the federal process, but the state requires you to use its own exemption laws to protect property during your case. These exemptions determine what assets you’re allowed to keep through Chapter 7 or Chapter 13. If you’ve lived in Maine for at least two years before filing, the following exemptions may apply:
- Homestead exemption: Up to $80,000 in equity in your primary residence (or $160,000 if you are elderly or disabled)
- Vehicle exemption: Up to $7,500 in equity in one motor vehicle
- Personal property: Up to $200 per item, with a total of $5,000 for household goods, clothing, and furnishings
- Tools of the trade: Up to $5,000 in professional tools or equipment
- Wages: A portion of earned but unpaid wages is protected
- Public benefits: Fully exempt, including Social Security, unemployment, and workers’ comp
- Retirement accounts: Most tax-deferred retirement plans and pensions are fully protected
Work With an Experienced Maine Lawyer
Maine’s state-specific exemptions help ensure that you can keep essential property while getting your finances back on track. But the process can be complex—and every decision you make along the way matters. To protect your interests and get the outcome you need, consider speaking with a knowledgeable bankruptcy attorney.
Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!
About the Author
Aaron is a professional legal writer with a B.S. in English Education from Southern Illinois University – Carbondale. He has written, published, and edited thousands of legal articles for RequestLegalHelp, which has connected over 5 million people to legal help in the United States.
With over five years of experience writing thousands of legal articles for law firms across the U.S. and Canada, Aaron specializes in covering federal, state, and city-level legal issues ranging from auto accidents to wrongful terminations.
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