Bankruptcy in Maryland
Tired of juggling bills that never seem to shrink? If you’re living in Maryland and can’t keep up with debt—whether it’s credit cards, medical expenses, or loan payments—you’re not alone. When financial pressure becomes constant, it can impact every part of your life, from your home to your health.
Bankruptcy might be the lifeline you need—not a last resort, but a fresh start. Filing can put a stop to collection calls, wage garnishments, and foreclosure threats.
Guidance makes all the difference. A Maryland bankruptcy attorney can explain your options, help you navigate the filing process, and make sure you take full advantage of your rights. If you’re ready to explore a smarter path forward, request a referral today.
Types of Bankruptcy in Maryland
Bankruptcy offers individuals and businesses in MD a legal path toward financial recovery when debt becomes unmanageable. It can eliminate many types of financial obligations, giving you a clean slate to rebuild. You must have a genuine hardship, such as job loss, medical expenses, or other financial strain.
There are multiple types of bankruptcy available, and the right option depends on your unique financial situation. Chapter 7 is designed for quicker relief through asset liquidation, while Chapter 13 offers a structured repayment plan. Chapter 11 is generally used by businesses or individuals with substantial assets or complex debt.
To decide which path best aligns with your income, goals, and the property you want to keep, it’s wise to speak with a qualified bankruptcy attorney. They can help you evaluate your options and make a decision that puts you on solid financial ground.
In Maryland, bankruptcy cases are handled by the United States Bankruptcy Court for the District of Maryland. The court has locations in both Baltimore and Greenbelt, serving residents across the state for Chapter 7, 11, and 13 filings.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy can offer a fresh financial start, particularly for Maryland residents facing debt they can no longer manage. It’s best suited for individuals who don’t have the income or resources to maintain ongoing payments. Before filing, take a close look at your income, expenses, and any assets that might be affected.
This type of bankruptcy is typically available to those with limited or inconsistent income who’ve experienced a financial disruption, such as job loss or medical hardship. While Chapter 7 can wipe out unsecured debt, it may also require you to give up non-exempt assets.
Filing triggers an automatic stay, which puts a temporary hold on collections like garnishments and foreclosure actions. That said, some debts—like child support, criminal fines, or restitution—remain enforceable and must still be paid.
To qualify for Chapter 7 bankruptcy in Maryland, you’ll first need to pass the means test—a screening tool designed to ensure that this form of relief is reserved for those who truly need it. The process starts by comparing your household income to the state median. If your income falls below that line, you’re typically eligible to file.
As of the most recent data, Maryland’s median income levels are $77,955 for a single filer, $96,739 for a two-person household, $117,343 for a family of three, and $138,061 for a household of four. If you earn more than the median, you’ll need to complete a second part of the test.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is a more advanced legal option, typically used by businesses or individuals with substantial assets or complex debt obligations. Rather than wiping out debt entirely, it focuses on reorganizing what’s owed into a manageable payment structure. This plan is developed and proposed by the filer, then reviewed and approved by the court, often covering a period of four to eighteen months.
One of the biggest advantages of Chapter 11 is that it allows you to keep operating or maintain ownership of your property while negotiating new terms with creditors. Instead of liquidating assets, you work toward a plan that brings your accounts current and supports long-term financial stability.
Filing for Chapter 11 bankruptcy in Maryland requires a full financial disclosure and a clear plan to restructure your debts under court supervision. Because this process is more involved than other types of bankruptcy, you’ll need to provide detailed documentation from the start.
The following forms are required:
- Voluntary Petition (Official Form 101)
- Schedules A/B through J – detailing your assets, debts, income, and monthly expenses
- Statement of Financial Affairs (Form 107)
- Creditor Matrix – a full list of creditors and their mailing addresses
- Summary of Assets and Liabilities
- Disclosure of Attorney Compensation
- Recent financial statements – including profit/loss and balance sheets for businesses
- Reorganization Plan and Disclosure Statement – usually filed early in the process
Chapter 13 Bankruptcy
Chapter 13 bankruptcy—often called a wage earner’s plan—gives individuals in MD the chance to reorganize their debts while protecting essential assets. After your case is filed, the court appoints a trustee who reviews your financial situation, including your income, debts, and property. From there, you’ll propose a repayment plan that typically spans three to five years.
The structure of your repayment plan will depend on how much you earn and what you’re trying to keep, such as a home or vehicle. If the plan is completed successfully, some remaining unsecured debts may be discharged.
The oversight involved in Chapter 13 is also more extensive. Unlike Chapter 7, which is typically resolved in a matter of months, Chapter 13 requires consistency and long-term commitment.
The Bankruptcy Process in Maryland
There’s rarely a perfect moment to file for bankruptcy. However, if your debt is growing faster than you can manage, it may be time to consider your options. Bankruptcy can pause collections, protect your property, and give you a structured path forward.
To begin the process in Maryland, you’ll need to organize all relevant financial details. That includes your monthly expenses, total debts, annual income, and a list of all assets. The court uses this documentation to assess your eligibility.
In Maryland, bankruptcy filers must use the state’s exemption laws to protect certain property during the process. These exemptions determine what assets you can keep, whether you’re filing under Chapter 7 or Chapter 13.
If you’ve lived in the state for at least two years before filing, you may be eligible to protect the following:
- Homestead exemption: Up to $25,150 in equity in your primary residence
- Personal property: Up to $1,000 in household furnishings, clothing, appliances, books, and pets
- Wildcard exemption: Up to $6,000 in any property of your choosing
- Wages: Up to 75% of earned but unpaid wages
- Tools of the trade: Up to $5,000 in tools or equipment needed for work
- Public benefits: Fully exempt, including Social Security, unemployment, and veterans’ benefits
- Retirement accounts: Most tax-qualified pensions and retirement accounts are fully protected
Work With an Experienced Maryland Lawyer
If you’re a Maryland resident overwhelmed by debt, bankruptcy may offer the relief and structure you need to move forward. Whether you’re considering Chapter 7 to wipe the slate clean or Chapter 13 to catch up while protecting your home and assets, the right approach can stop collections and give you breathing room.
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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