In Maryland, bankruptcy provides consumers with a lasting solution for overwhelming debt. Filers choose between liquidation and a new repayment plan. The different chapters provide benefits and protection. However, their circumstances define which chapter is the more suitable choice. A bankruptcy attorney in Bowie, MD gives the consumer’s guidance as they make decisions.
Requirements for Chapter 13
The consumer must provide evidence of their income. The court wants the records for at least six months. The calculations that define the consumer’s income must show a value over $99,105. This is the median income for the local region. However, the claim is based on the consumer’s household size and the median income for their household. This is the lowest acceptable value.
Liquidation Through Chapter 7
In chapter 7, the consumer provides a list of all their assets. The court reviews the assets and identifies the market value of each asset. This provides the court with a projected value of potential proceeds. The proceeds are used to pay off the consumer’s debts. A trustee is assigned the case and must manage the sale of the assets and the distribution of the proceeds to the creditors. A bankruptcy attorney in Bowie, MD provides consumers with a projection of their proceeds.
Automatic Stays in Bankruptcy
The automatic stay stops all legal actions taken by creditors, and prevents foreclosure and repossession. Chapter 13 stays last up to five years, and chapter 7 stays last up to six months. The creditors cannot file a lawsuit against the consumer if their debt is included in the bankruptcy claim.
The First Step
The first step for all bankruptcy cases is to attend a credit counseling program. The program must be state-approved. The consumer won’t face any excessive costs for the program. Select programs are free of charge.
In Maryland, bankruptcy provides a clear choice for reducing or eliminating debts for bankruptcy filers. The consumer can include any approved debts in their claim. They may eliminate some debts through a discharge offered by the judge. .
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