What are My Options for Filing for Bankruptcy?
If you have decided to file for bankruptcy, you’ve made the first step by realizing you need help with your debts. But you have other important decisions to make, most importantly what bankruptcy structure you should file. But before you decide on a debt relief structure, you need to understand how your debts are discharged. Below are your choices for filing for bankruptcy in Maryland:
For individuals:
Chapter 7
Chapter 12
Chapter 13
For businesses:
Chapter 11
How Does Each Bankruptcy Structure Work?
Chapter 7- Chapter 7 bankruptcy is also known as liquidation and is appropriate if you don’t have income. When you file for Chapter 7, a trustee is appointed to oversee the surrender and sale of your valuables. It’s important to note you may need to sell your home or car to pay for debts and this structure won’t work if are trying to avoid foreclosure. The proceeds of the sales will go towards paying off debtors, after which qualifying debts will be discharged. Chapter 7 bankruptcy takes several months to conclude.
Chapter 12- This bankruptcy structure is like Chapter 13, but it applies to family farms and family fishermen.
Chapter 13- Chapter 13 bankruptcy is a process that allows you to pay off your debts over a long period. For this debt relief structure, you must have a regular income that can be used to pay your debts. A judge determines the amount paid to creditors and must approve of your monthly budget. The entire process can take three to five years. After you emerge, the remaining balances on your debts will be discharged. Chapter 13 is an effective wat to avoid foreclosure.
Chapter 11-This structure is used for businesses that are allowed to continue operations throughout the bankruptcy process. Your repayment plan must be approved by a judge and your creditors. Trustees are not assigned in all Chapter 11 cases, but a judge can appoint one. If a trustee is assigned your case, they will be in charge of the budget and operation of your business.
Why Should I Hire a Bankruptcy Lawyer?
There are many reasons why you should hire a bankruptcy lawyer in Maryland and learn if bankruptcy is the right plan for you. USAttorneys.com can connect you with a local attorney who can help decide which debt relief structure is right for you.
US Bankruptcy Court in Maryland
101 W Lombard St # 8308, Baltimore, MD 21201
