Maine Bankruptcy Laws should be known by every resident of the state of Maine. For many Maine citizens, the only option they usually consider when they are undergoing financial ruin is bankruptcy protection that’s why changes made to the federal bankruptcy laws issued in 2005 require every bankruptcy applicant to undergo a credit counseling program. Maine bankruptcy laws also use this same requirement to screen its debtors before they apply for bankruptcy protection program.
If you are still wondering why a debtor in dire financial needs who wants to avail of the bankruptcy protection rights will still be required to take the counseling program, the answer is: to advice the debtor on how to handle his salary or income and how to manage his debts. The representative of the program will also orient the debtor on how to make a budget. The program administrator should be an organization accredited by the federal court. The credit counseling program should be completed 6 months prior to the formal petition of bankruptcy protection and should have all the necessary certification that you have completed said program.
Having sufficient knowledge about the basic laws of the whole bankruptcy process will prove advantageous to you. For those who are not familiar with the basic bankruptcy laws and you’re interested to file for bankruptcy, it’s high time you start reading now. Knowing the difference between Chapter 7 and Chapter 13 bankruptcy is important. For Chapter 7 or the liquidation bankruptcy program, your non-exempt will be in danger of being confiscated by the court’s trustee for payments to your creditors. During bankruptcy application, you will be asked to provide an itemized list of all your belongings. This list will be used by the trustee to choose between assets to dispense.
However, applying for Chapter 7 may be harder than you think. Not all applicants will be eligible for Chapter 7; only those with monthly income below the median income level of the state of Maine are guaranteed a slot. The median income level is based on the newest statistics of the US Census Bureau you can view on their website. If this won’t work out for you, another option is open. Your last six months worth of income will be computer from which household expenses will be deducted. Should your dispensable cash not reach than the court required $100 per month to pay your debt, then you can apply for Chapter 7.
Chapter 13 on the other hand, does not eliminate all your debts at one time, but helps you repay it back through a debt restructuring plan. It is your responsibility as a debtor to suggest a repayment plan that the court has to approve. Once this is okayed by the court, you will start paying all creditors by giving your monthly stipulation to the trustee who in turn, will pay the money to the creditors through the priority structure set by the court. Rest assured your assets will be protected from creditors while you are in the process of paying your debts for a three to five-year period.
Maine bankruptcy laws have specific state exemptions that are protected by the court against your creditors. Although there are exemptions set by the federal laws, the state laws offer more lenient exemptions. These include:
• Home worth $47,500 and increased for up to $90,000 if you have dependents, are 60 years old and above, handicapped, or with handicapped dependents;
• A vehicle worth $5,000;
• Household items amounting up to $200 each;
• Tools of trade worth $5,000;
• Food supplies worth 6 months; and
• Other benefits that include your unemployment compensation, public benefits, and child support.
The application for bankruptcy does not end here; this is just the beginning of a complex process that will have your head spinning if you do it yourself. A lawyer is an utter necessity for cases like bankruptcy application. Lastly, a debtor should put in mind that bankruptcy protection is not the be-all and end-all to all financial worries.