Bankruptcy law in US with focus on Maryland: A preliminary guide for novice

Bankruptcy law in US with focus on Maryland: A preliminary guide for novice

Bankruptcy can occur at individual as well as at organizational level. The recent recession saw rising number of bankruptcy cases. Number of cases rose to 46% in 2008 and dropped to somewhere around 30% in the year 2009.The state is ranked 21st in terms of bankruptcy filings. Non-business filings accounted for the majority of cases for the last 12 months. Recently the numbers of bankruptcy cases have returned to the pre-2005 times. Bankruptcy is going to affect your credit scores in the end. Since, the record will remain in your credit report for at least 10 years. You can file bankruptcy under chapter 7 or chapter 13.You need to know whether you qualify for chapter 7 or chapter 13.In case you want to file bankruptcy under chapter-7 your annual income should be lower than the median income of your state or residence. This would include other income related calculations and expenses. Filing bankruptcy under chapter- 7 is beneficial for people facing unsecured debts like-medical bills, credit card debt and you have very few assets. Creditors would be able to proceed with collection efforts with your co-signers even if you are left Scott free. Chapter 13 talks about a court administered bankruptcy settlement. The repayment period may vary from 3 to 5 years. The remaining debt is discharged after successful repayment at the end of the court fixed repayment period. One of the advantage of filing bankruptcy under chapter 13 is one doesn't need to qualify any means test unlike chapter-7.American nationals often opt for chapter-13.This clause is also beneficial for people facing short term financial crisis or due to unexpected excess expenditure. One must be careful that filing bankruptcy under this clause may result in stop of mortgage foreclosures and other repossessions. Co-signers are protected if certain conditions are met.

1. In case of consumer debt;

2. Debt not incurred in normal course of business;

3. co-signers can't benefit from the proceeds of the debt;

4. Debtor sticks to chapter-13's payment agreement. The suitability of your clause will depend on your circumstance. Many people abuse these bankruptcy laws to evade taxes and other criminal intentions. As a result during the George W. Bush's reign a law was passed called The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This made it mandatory to provide additional documents while filing for bankruptcy like- debtor education course and credit counseling briefing. This is when you will require an expert advice. You will require a careful evaluation and advocate in the form of a Maryland Bankruptcy Lawyer failing which will put you neck deep in legal glitches. If you are searching for a lawyer practicing personal injury, please visit the lawyer directory to get the required information.

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