Bankruptcy is a legal procedure allowing a person or business to have their debts excused, in part or in whole. It is typically treated as a last resort, because, while it can prevent financial catastrophe, it has some influential 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 Seat Pleasant, Maryland will have distinct rules for exemptions, so you should speak with a local attorney before filing.
Chapter 7 Bankruptcy in Seat Pleasant, Maryland
In Seat Pleasant, Maryland, there are 2 commonly-used forms of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 involves liquidation of some of a debtor's assets. It requires that a certain percentage of the debtor's property to be sold to pay off as much debt as possible. The majority of property that most people own, however, is exempt. This typically includes homes, vehicles, retirement accounts, and others. These are not available to creditors.
Once the appropriate property is sold, and the funds transferred to the creditors, the dischargeable debt is absolved. Some types of debt, however, can't be excused in Chapter 7 Bankruptcy in Seat Pleasant, Maryland. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be excused, Chapter 7 might not be the best choice for you.
Chapter 13 Bankruptcy in Seat Pleasant, Maryland
Chapter 13 Bankruptcy in Seat Pleasant, Maryland is very different from Chapter 7. Whether or not it is a better option is highly dependent on the facts of each distinct case. Chapter 13 bankruptcy does not absolve debt, it restructures it. This involves a court coming up with an adjusted repayment plan designed to be manageable for the debtor. This new plan sets aside the terms of the original arrangements that created the debt in the first place. This creates a new payment structure, typically involving a single monthly payment, that the debtor should find manageable.
Which Type of Consumer Bankruptcy Should I File in Seat Pleasant, Maryland
The answer to this question depends heavily on your distinct 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 Seat Pleasant, 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).