Bankruptcy is a legal procedure allowing a person or business to have their debts discharged, in part or in whole. It is usually treated as a last resort, because, while it can prevent financial catastrophe, it has some major long-term consequences. This warrants careful consideration of the costs and benefits. Being a product of federal law, bankruptcy will go through federal courts. Accordingly, the procedure for filing for bankruptcy in Maryland is basically the same as the procedure anywhere else in the United States. However, individual courts in Baltimore, Maryland will have individual rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Baltimore, Maryland
There are 2 main types of consumer bankruptcies in Baltimore, Maryland: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 requires that a certain percentage of the debtor's property be liquidated to pay off at least a small part of their debt. However, many types of property are exempt, and do not need to be liquidated, such as cars, homes, insurance policies, and retirement accounts.
Once the non-exempt property is sold, the rest of the dischargeable debt is absolved. Some types of debt, however, is non-dischargeable, including student loans, criminal fines, and others. If most of your debt in Baltimore, Maryland is not dischargeable, Chapter 7 may not be the best option.
Chapter 13 Bankruptcy in Baltimore, Maryland
Chapter 13 Bankruptcy in Baltimore, Maryland differs significantly from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 Bankruptcy involves a court setting up a adjusted payment plan, which allows the debtor to pay off most or all of his debts over a longer period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.
Which Type of Consumer Bankruptcy Should I File in Baltimore, Maryland
The answer to this question depends heavily on your individual situation. If you have enough steady income to manage a payment plan, and a lot of non-exempt property that you are unwilling to part with, Chapter 13 might be a good option. If you don't have much steady income, and most of your property is exempt, Chapter 7 might be better.
In any case, it would be a good idea to consult a local bankruptcy attorney in Baltimore, Maryland. Your attorney can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).