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Bankruptcy and debt law in Maryland is designed to help individuals and businesses manage or eliminate overwhelming debt, offering a fresh financial start. Bankruptcy is a court-managed process that can involve liquidating assets to pay back creditors, organizing payment plans, or discharging certain debts entirely. In Maryland, both federal bankruptcy laws and state-specific regulations work together to provide various options for debt relief, such as Chapter 7, Chapter 13, and, for businesses, Chapter 11 bankruptcies. Alternatives to bankruptcy, like debt settlement or consolidation, may also be available depending on one's circumstances.
Navigating bankruptcy and debt-related matters can be complex and stressful. Many people seek legal advice for:
In Maryland, bankruptcy procedures mostly follow federal law, but important state-specific factors apply:
The most common types are Chapter 7 (liquidation), Chapter 13 (reorganization for individuals with regular income), and Chapter 11 (primarily used by businesses or individuals with significant debt).
No. Most unsecured debts such as credit cards and medical bills may be discharged, but certain debts such as child support, alimony, many taxes, and student loans are generally not dischargeable.
You may be able to keep your home or car depending on the type of bankruptcy filed and the available Maryland exemptions. However, you must continue to make payments on secured debts if you wish to keep the property.
Bankruptcy is a negative mark on your credit report and can remain for up to 10 years for Chapter 7 and up to 7 years for Chapter 13. However, many people are able to rebuild their credit over time.
Maryland allows exemptions for certain property, such as a limited amount of equity in your primary residence, retirement accounts, wages, and personal property. The specifics depend on current exemption amounts, which may change periodically.
The means test determines if your income is low enough for Chapter 7 bankruptcy. It compares your household income to Maryland's median income for a household of your size. If you exceed the limit, you may have to file under Chapter 13.
Once you file, an automatic stay goes into effect that stops most collection actions, including phone calls, lawsuits, wage garnishments, and foreclosures.
In most cases, you will need to attend a meeting of creditors, also known as a 341 meeting. You may need to appear at additional hearings if complications arise.
Yes. Alternatives include debt consolidation, debt settlement, negotiating directly with creditors, or enrolling in a credit counseling program.
Look for attorneys who specialize in bankruptcy law, are licensed in Maryland, and have experience with cases similar to yours. Consultation with local bar associations or legal aid organizations can also help.
For more information or assistance, consider these resources:
If you are struggling with debt or considering bankruptcy in Maryland, begin by gathering your financial records and understanding your full debt situation. Consider speaking with a certified credit counselor to explore all your options. If bankruptcy seems like the best route or if creditors are suing or harassing you, consult with a qualified bankruptcy attorney who can guide you through your specific circumstances and ensure you understand your rights and responsibilities under Maryland law.
You can also contact Maryland's local legal aid resources for free or low-cost assistance if you are unable to afford an attorney. Make sure to act promptly, as waiting too long may limit your options or put your assets at risk.
