When you have a substantial amount of debt, declaring bankruptcy may be the ideal solution. However, the filing process can be quite confusing if you don’t know what to expect. This is why it’s a good idea to consult with an experienced attorney before moving forward, says the team at the Cantonsville-based Law Offices of Frank E. Turney, P.A. They have extensive knowledge of Maryland’s laws and filing procedures and have helped numerous clients navigate the legal system to successfully achieve debt relief. Below, they give a brief overview of petitioning for bankruptcy in the Old Line State.
A Basic Guide to Maryland Bankruptcy Laws
Types of Bankruptcies
There are two personal bankruptcy options: Chapter 7 and Chapter 13. The former provides a quick method for eliminating debt completely, but it requires non-exempt property to be sold to pay off creditors. This is typically a good choice if you have mostly unsecured debt and exempt property. In contrast, a Chapter 13 bankruptcy will allow you to devise an affordable repayment plan to pay back your creditors in three to five years. You will be able to keep all your property, and more debts are dischargeable.
Every state has its own list of property exemptions, which identifies what debtors can keep when filing a Chapter 7 bankruptcy. In Maryland, exemptions include up to $22,975 in home equity; $1,000 for clothing, household goods and furnishings, appliances, books, and pets; burial plots; public benefits; $5,000 for items necessary for work; life insurance; $5,000 in personal property other than real estate; and pensions. Exemptions can be confusing so it is a good idea to talk to an experienced bankruptcy lawyer.
Means Testing & Credit Counseling
Bankruptcy law requires individuals to pass a means test and complete a credit counseling program before declaring bankruptcy. The means test will assess your income and establish your eligibility to file for Chapter 7. The credit counseling course must be taken at a state-approved agency and finished within six months prior to filing.
The more you understand about filing for bankruptcy, the easier it will be to determine if this is the most suitable option for your financial situation. An attorney from the Law Offices of Frank E Turney, P.A. will evaluate your debt obligations and advise you on the best course of action. Should you decide to file, they will make sure you’re in compliance with the state’s guidelines to avoid any errors that could result in your case being dismissed. Contact them at (410) 788-8830, or visit their website for more information.