Chapter 13 is a section of the Bankruptcy Code that helps individuals, or small business owners, reduce and reorganize debts with a reasonable repayment plan that they can afford. Chapter 13 bankruptcy allows you to:
- Stop wage garnishment.
- Prevent foreclosure on your home.
- Stop car repossession.
- End collections activities.
- Have a sensible debt repayment plan that increases cash flow.
- Rebuild your credit.
CHAPTER 13 BANKRUPTCY – MARYLAND OVERVIEW
Who Can Qualify For A Chapter 13 Bankruptcy?
In general, Chapter 13 bankruptcy is appropriate for individuals or small business owners who want to protect valuable property and who have more discretionary income that can be allocated to creditors. In order to qualify for a Chapter 13, you must meet the following criteria:
- Your Debts Are Not Over A Certain Limit. If your total burden of secured debt, (e.g. mortgages and car loans) and unsecured debts (e.g. credit cards and medical bills) is too high, you will not meet the criteria for a Chapter 13. The Chapter 13 limit thresholds change frequently, so it is best to consult with an experienced bankruptcy attorney to find out if you meet the qualifications.
- You Are Not A Corporation Or Partnership. Chapter 13 bankruptcy is only available to individuals; however, the repayment plan can include business related debts that you have incurred.
- You Can Meet Monthly Payment Obligations. You must be able to prove that you have a steady source of income and are able to meet the monthly payment obligations that are a part of your agreement.
What Are the Benefits of Filing for Chapter 13 Bankruptcy in Maryland?
Chapter 13 bankruptcy is a practical solution that can help you rebuild your financial future. Under Chapter 13, the courts will create a reasonable payment plan that you can afford while giving you a chance to protect your major assets. The reduction and reorganization of debt can also increase cash flow, providing an opportunity to catch up on late car loan or mortgage payments or pay off nondischargeable financial obligations. Most Chapter 13 repayment plans are spread out over a manageable 3 to 5 year timeframe.
What Is The First Step In Filing For A Chapter 13 Bankruptcy?
If you are considering filing for bankruptcy, it is important to work with an experienced Baltimore bankruptcy attorney who is familiar with state and federal bankruptcy laws. The laws surrounding Chapter 13 bankruptcy, such as income threshold limits, change frequently. An experienced attorney can help ensure that your bankruptcy petition does not get dismissed. As a first step, your attorney will review your financial information such as your income, debt and assets and will complete the paperwork necessary to file the petition. Once the bankruptcy petition is submitted, it can take anywhere from one to five months to complete the process, but you will be expected to begin making monthly payments according to the terms of your repayment plan within 30 days of filing.
What Else Can I Expect When Filing For Chapter 13?
Once your attorney official submits your bankruptcy petition, an automatic stay will take effect which will prevent any creditor from taking debt collection actions. Within days of the filing, the court will appoint a trustee to your case and you will receive a notice that includes information about Chapter 13, a creditors meeting date, a date for the confirmation hearing and a deadline for creditors who want to file claims. Creditors who wish to file a written objection to your repayment plan must do so prior to 25 days before your confirmation hearing. During the process, you will need to attend a meeting of the creditors where the trustee or creditors can ask you questions about your debts and financial situation. Prior to the meeting of creditors, your attorney and the trustee will advise you about any documentation that you may need to bring. Once a repayment agreement is put in place, you will begin making payments on your repayment plan. The payments are made to the designated trustee, who then distributes them to the creditors. You will receive regular statements from your bankruptcy trustee showing the remaining balances and payment activity.
If you are overwhelmed with snowballing debt, and are not sure what to do, take the time to meet with a trusted local bankruptcy attorney. Chapter 13 bankruptcy can provide you with a new financial start by allowing you to retain your most important assets and increase discretionary cash while reducing debt. Our reputable and experienced Maryland bankruptcy attorneys can help you navigate this complex process. Contact Sirody & Ruben Bankruptcy Center at 410-415-0445 for more information about filing for Chapter 13 bankruptcy.
UNSURE IF CHAPTER 13 BANKRUPTCY IS RIGHT FOR YOU?
Our Maryland bankruptcy attorneys can assess your financial situation and present you with all of your options. Schedule a free consultation with one of our attorneys.