Chapter 7 Maryland Bankruptcy or Chapter 13 Maryland Bankruptcy?

Bankruptcy may provide some relief to a borrower under financial stress and overwhelmed with debt. Typically, there are two types of bankruptcy available to a debtor, Chapter 7 bankruptcy and Chapter 13 bankruptcy. The requirements and benefits offered by the two types of bankruptcy differ greatly. A Maryland bankruptcy attorneycan explain the differences between the two chapters in detail and help ensure a successful bankruptcy filing. It is highly recommended that a debtor consult a bankruptcy lawyer for help determining which bankruptcy chapter is best suited for their situation. An incorrect or incomplete bankruptcy petition can create long-lasting consequences for the debtor.

Chapter 13 is considered a restructuring bankruptcy because the debtor continues to make payments to their creditors according to a court approved payment plan. The payment plan outlines how the income the borrower receives will be used to pay off the debts owed. Once the payment plan is confirmed by the court it will bind the debtor and each creditor included in the bankruptcy. A debtor should always seek the aid of a Maryland bankruptcy attorney when submitting a payment plan. An unsatisfactory payment plan can cause delays and unnecessary hardship for a debtor.

Unlike Chapter 13 bankruptcy, Chapter 7 does not involve a payment plan. Instead of making monthly payments to creditors, the bankruptcy trustee will liquidate a debtor’s assets and use the proceeds of the sale to pay the creditors included in the bankruptcy.  Fortunately, not all of a debtor’s assets will be subjected to liquidation by the bankruptcy trustee. Maryland bankruptcy law provides exemptions for many assets a debtor might own. If an asset is exempt from the bankruptcy the creditor will not be able to liquidate or garnish the asset. Thus, the more property that is exempt, the more property the debtor will continue to own after the bankruptcy.

Most states allow a debtor to exempt at least a portion of household goods, pension accounts, automobiles and real estate owned as a primary residence. Fortunately, Maryland bankruptcy law is very generous with its exemptions, which may benefit debtors seeking Chapter 7 protection in Maryland. Maryland allows more types of property and higher portions of the property to be exempt than most other states.  For more information on which assets may be exempt from a Chapter 7 liquidation you should contact a Maryland bankruptcy attorney in your area.

Bankruptcy law can be very confusing and intimidating. If you are considering seeking bankruptcy protection you should contact an experienced Maryland bankruptcy lawyer for legal advice. A Maryland bankruptcy attorney can answer your questions and provide you with sound legal advice.

The Maryland Bankruptcy Center provides Chapter 7 and Chapter 13 bankruptcy services for Maryland residents who reside in Baltimore, Columbia, Dundalk, Essex, Glen Burnie, Pasadena, Annapolis, Catonsville, Ellicott City, Towson, Owings Mills, Timonium, Pikesville, Reisterstown, Arbutus and many other areas.  Call today for a free consultation.  Our phone number is 1-800-NEW-START and our e-mail address is  We are available 24/7 and as I said, all consultations are free.

David L. Ruben, Esquire

Maryland Bankruptcy Lawyer