subject: Know The Essentials Before Filing For Bankruptcy [print this page] When it becomes difficult to arrange for the repayment of your debts, individuals often resort to the last available option filing for bankruptcy. The Annotated Code of Maryland provides the guidelines to this legal proceeding. Thorough knowledge of the federal and state laws is important. Therefore, it is advisable that you avail help from a bankruptcy lawyer if you are planning to file for it.
As a resident of Maryland, you have the right to file for bankruptcy under either Chapter 7 or Chapter 13. The first question that pops up is how exactly these schemes work. Well, here is a brief overview of the procedure.
Categories of bankruptcy filing in Maryland
Chapter 7: There is no clause of repayment in this category. After you file for bankruptcy, the court-appointed trustee assesses your property and sells it off. This sum is used to pay the court fees and charges and the remaining is used to pay off your creditors, according to priority.
It seems to be an easy way out to solve your problems; however, the truth is not that simple. Filing for this type of bankruptcy in Maryland has an important consequence as well the loss of property. Certain items are, however, exempt from liquidation. Consult with a competent bankruptcy lawyer to know what you may lose and what you may keep.
Chapter 13: Also called the wage earners plan, this type of bankruptcy gives you a chance to repay your debts, full or partial, within a certain span. The plan may be of 3-5 years, according to the difference between the individuals income and the applicable median income in Maryland.
Usually, the repayment scheme is of 3 years if the individuals income is less than the state median income. It extends over 5 years if the individuals income is more than the state median income. (Note: The state median income in Maryland was $70,482 in 2008, as per US Census Bureau)
Why do you need a lawyer?
Before you take any decision regarding the filing, it is best to talk to a Maryland bankruptcy lawyer. The initial question is whether bankruptcy is the only solution. If yes, which category of filing suits your situation? Whether you opt for Chapter 7 or 13, you need to ascertain your eligibility first. You also require finding a certified agency for credit counseling.
You may find your filing application rejected if you do not pay heed to the legal guidelines. And, it is to understand these that you require legal help. Bankruptcy is not an easy thing to go through. It becomes even more difficult if you get in a legal mess. Your lawyer has the legal expertise to foresee problems and prevent any errors. You need to consult a bankruptcy lawyer to know your rights and responsibilities.
