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Filing Bankruptcy in Maryland: A Comprehensive Guide
Understanding Bankruptcy
Filing for bankruptcy in Maryland is a legal process that helps individuals or businesses eliminate or repay their debts under the protection of the bankruptcy court. It is designed to give you a fresh financial start. However, it is not a decision to be taken lightly.
Types of Bankruptcy
There are several types of bankruptcy, but the most common for individuals are Chapter 7 and Chapter 13.
- Chapter 7: Known as 'liquidation bankruptcy,' it involves the sale of a debtor's non-exempt assets to pay off creditors. It's usually suitable for those with limited income.
- Chapter 13: This is a 'reorganization bankruptcy' where debtors create a repayment plan to pay back all or part of their debts over three to five years.
The Filing Process
Eligibility Criteria
Before filing, it's important to determine your eligibility. For Chapter 7, you must pass the means test, which compares your income to the median income in Maryland. Chapter 13 requires a regular income to support a repayment plan.
Steps to File
- Credit Counseling: Complete a credit counseling course from an approved provider within 180 days before filing.
- Documentation: Gather all necessary financial documents including income, debts, and assets.
- File the Petition: Submit the bankruptcy petition, schedules, and other required forms to the court.
- Meeting of Creditors: Attend the 341 meeting where creditors can ask questions about your financial situation.
- Discharge or Repayment: Receive a discharge of debts or begin the repayment plan under Chapter 13.
Legal Assistance
It's highly recommended to consult with a bankruptcy attorney who can guide you through the process. Finding low income bankruptcies lawyers near me can be a good starting point for those who may not afford high legal fees.
Impact on Your Financial Future
Bankruptcy can significantly impact your credit score and remain on your credit report for up to ten years. However, it also provides an opportunity to rebuild your finances.
Rebuilding Credit
After bankruptcy, consider these steps to improve your credit:
- Pay bills on time.
- Use a secured credit card responsibly.
- Regularly check your credit report for accuracy.
Frequently Asked Questions
What debts are not discharged in bankruptcy?
Certain debts such as student loans, child support, and taxes are typically not discharged in bankruptcy.
Can I file for bankruptcy more than once?
Yes, but there are time restrictions. For Chapter 7, you must wait eight years from the date of your previous filing. For Chapter 13, you must wait two years between filings.
Will I lose my house if I file for bankruptcy?
It depends on the type of bankruptcy and your specific circumstances. Chapter 13 can help you keep your home, while Chapter 7 may require the sale of non-exempt assets, including your home.
For further details on bankruptcy laws and processes in other states, you might consider researching filing bankruptcy in ma as it provides a comparative perspective on different state regulations.
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