Bankruptcy: What is it and how does it work?

As a Maryland bankruptcy lawyer, I have many clients that know very little about the bankruptcy process when they come in for a consultation. It is important that anyone considering filing for bankruptcy to have a basic understanding of the process before they make the decision to file. Everyone has a right to know what their options are and how these options can affect their future, especially when dealing with a bankruptcy.

Types Of Bankruptcy

There are two types of bankruptcy and each carry different qualification standards. Filing for Chapter 7 bankruptcy produces a debt elimination at very little out of pocket cost to the debtor. However, a debtor must have a reportable income less than the median income level of their state of residence in order to qualify. This rule prevents abuse of the system by weeding out anyone who may be able to afford to repay their debts rather than have them eliminated.

Filing for Chapter 13 bankruptcy allows a debtor to develop a repayment plan that better suits their budget. Those whose income is greater than the median income level of their state of residence would qualify for Chapter 13. In general, qualifying for Chapter 13 is much easier than Chapter 7 and is open to virtually anyone who owes less than $360,475 in unsecured debts and less than $1,081,400 in secured debts. The idea is to allow those who can repay their debts to do so without the hassle of threats, repossessions or creditor harassment.

Navigating The Process

Once a debtor has decided which type of bankruptcy they wish to file the first step to initiate their case is to complete a bankruptcy petition. This document details their financial information such as debts, assets, income, bank accounts and spending habits. The court uses this document to determine how the debts will be managed and whether any payments can be made to creditors. It is extremely important that debtors complete this document accurately and honestly.

Debtors will also be required to complete several steps before their debts can be discharged. The first is a Meeting of Creditors, which allows the creditors and debtor to meet for the purposes of clarifying information. The debtor will also be required to pay the necessary filing fees with the court. The final step is to complete a debtor education course through a credit counseling agency. Any failure to complete any of these steps could result in the case being delayed or even dismissed.

The Maryland Bankruptcy Center helps people throughout Baltimore and Maryland file Chapter 7 and Chapter 13 Bankruptcy. We file cases to stop wage garnishments and judgments and to eliminate credit card debts, medical bills and to prevent foreclosures and save homes. We believe that our attorneys and staff provide the best and most affordable bankruptcy services for a high volume bankruptcy practice in the state of Maryland. Because we have such a high volume, we are able to price lower prices than most other firms, but at the same time we provide top quality, courteous and professional service. Call us today and you’ll see what we mean.

Our lawyers represent bankruptcy client’s throughout Baltimore, in Glen Burnie, Columbia, Towson, Owings Mills, Reisterstown, Pasadena, Annapolis, Ellicott City, Catonsville, Linthicum, Brooklyn Park, Severn, Odenton, Arnold, Hanover, Arbutus, Timonium, Parkville, Essex, Dundalk, Rosedale and Middle River. Call us today for a free consultation on the phone, by e-mail or in person, your choice. We can meet you during the day, in the evening or on weekends. We are here to serve you. Call (410) 766-4044 today.

David L. Ruben