Maryland Bankruptcy Laws should be known by every resident of the state of Maryland. It has always been a fact that when you ignore the credit card bills you receive and avoid receiving phone calls from collection agencies you are inviting trouble. Sometimes we do not realize that the credit card bills we have been continuously ignoring have reached a staggering amount prompting the creditors to take legal action. If worse comes to worst, the only choice left open for a debtor is bankruptcy protection.
Maryland bankruptcy laws state that it is your right to invoke bankruptcy protection, and together with this right is the awareness of every citizen to know the responsibilities that come with it.
Filing for Maryland’s bankruptcy is not as easy as you think. To make sure that you are in the right track, an expert lawyer should be consulted. The lawyer should be licensed to practice in the state of Maryland and most of all, should know about the intricacies of the federal and state-specific bankruptcy laws. For debtors who won’t elect professional help, all the more reason for you to study the local rules.
Of the two bankruptcy protection programs, the more popular is the Chapter 7 program. A lot of citizens would want to avail of the easy way out of their debts by eliminating all of these at one time. This may be the case for Chapter 7; however, the downside of the program is the changes made to the regulations that impose stricter screening of bankruptcy applicants. As much as every debtor would like to avail of the Chapter 7 protection, the only ones who can apply are those whose monthly income is lower than the median income level of the state of Maryland based on the current US Census Bureau data. Alternatively, those who do not have the dispensable fund of $100 per month can also avail of the program.
For those whose application of Chapter 7 has been denied, the only other option left is to file for Chapter 13. While this bankruptcy program does not liquidate your debts by selling of your non-exempt assets, it helps you restructure your existing debts through a repayment plan. This plan needs the approval of the court, and should be presented by the debtor who is also the author of the said plan. The trustee assigned to the case is there to help out the debtor devise the restructuring. The implementation takes effect immediately and the monthly debt payments should be given to the trustee who will distribute the funds accordingly. This should put a stop to all creditors calling and sending past due bills within the 5-year repayment period. This is called an automatic stay.
As it is, the only consolation in filing for bankruptcy is you get to keep certain properties. These are called exemptions and federal laws have provided a list of exemptions that debtors can choose. However, Maryland bankruptcy laws have also specified a list of exemptions to give debtors an allowance on the exemptions. The following is a list of Maryland’s asset exemptions:
• Real estate or personal property for up to $5,000;
• Any property amounting to $6,000 including cash;
• Items needed for your work like tools of trade for up to $5,000;
• Personal belongings like furniture, pets, books, and clothing up to $1,000;
• 75% of disposable wages; and
• Other benefits like public benefits, health aids, and insurance proceeds.
Before you think about all these, there’s also a court-mandated credit counseling program you have to attend before you can file the necessary paperwork and granting that you can pass the criteria specified for each bankruptcy protection program.