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 La Plata, Maryland will have individual rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in La Plata, Maryland
In La Plata, Maryland, there are 2 commonly-used forms of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This usually includes homes, vehicles, insurance policies, and retirement accounts. These do not need to be sold.
Once the eligible property is sold, and the funds transferred to the creditors, the dischargeable debt is excused. Some types of debt, however, can't be discharged in Chapter 7 Bankruptcy in La Plata, Maryland. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be discharged, Chapter 7 might not be the best choice for you.
Chapter 13 Bankruptcy in La Plata, Maryland
In La Plata, Maryland, chapter 13 is very different from Chapter 7, and may or may not be the best option for you, depending on your situation. Chapter 13 bankruptcy does not discharge debt. Instead, it restructures it. This involves the bankruptcy court coming up with a new payment plan that supersedes the terms of the agreements that gave rise to the debt in the first place. This results in a new payment plan that the debtor should find manageable, if he or she can make a few sacrifices.
Which Type of Consumer Bankruptcy Should I File in La Plata, Maryland
This depends entirely on the facts of your particular case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.
In any case, you should talk with a local La Plata, Maryland bankruptcy attorney. Your attorney can advise you of your options and inform you of their likely consequences. This will make it much easier for your to make an informed choice.