Maryland Bankruptcy Law: What to Do About Credit Card Debt

Maryland bankruptcy law provides individuals facing financial difficulties a structured way to manage their debts, including credit card debt. If you are struggling with overwhelming credit card bills, understanding your options under Maryland bankruptcy law can help you regain control of your financial situation.

One of the primary paths for individuals dealing with credit card debt in Maryland is Chapter 7 bankruptcy. This form of bankruptcy is designed for those who have limited income and allows for the discharge of unsecured debts, including most credit card debts. In a Chapter 7 bankruptcy, a bankruptcy trustee may sell certain non-exempt assets to pay creditors, but many individuals qualify to keep their property under Maryland’s exemptions.

To file for Chapter 7 bankruptcy in Maryland, you must pass the means test, which compares your income to the median income for a household of your size in Maryland. If your income is below the median, you can proceed with the Chapter 7 filing. If your income exceeds the median, you may need to consider Chapter 13 bankruptcy as an alternative.

Chapter 13 bankruptcy is another option for those with significant credit card debt. This type of bankruptcy allows individuals to reorganize their debts into a manageable repayment plan, typically lasting three to five years. Under Chapter 13, you can keep your assets while making monthly payments to a bankruptcy trustee, who then distributes payments to your creditors.

When filing for bankruptcy in Maryland, it’s essential to gather all your financial documents, including credit card statements, tax returns, and income information. This documentation will be necessary for your bankruptcy petition, so being organized can streamline the process.

Additionally, consider seeking advice from a qualified bankruptcy attorney who understands Maryland law. An attorney can help you navigate the complexities of the bankruptcy process, provide information about your rights and protections, and guide you toward the best option for your financial circumstances.

After filing for bankruptcy, you will receive an automatic stay, which halts most collection actions against you, including calls from creditors and lawsuits. This can provide immediate relief and allow you to focus on rebuilding your financial future.

Rebuilding credit after bankruptcy is essential. While bankruptcy will stay on your credit report for several years, many individuals start to see improvements in their credit scores soon after completing their bankruptcy repayment plan or discharge. To rebuild your credit, consider obtaining a secured credit card, making timely payments, and maintaining a budget to avoid falling back into debt.

In conclusion, if you are dealing with credit card debt in Maryland, bankruptcy may provide you with a fresh start. Whether you choose Chapter 7 or Chapter 13 bankruptcy, understanding the laws and seeking professional guidance is crucial to successfully navigate your financial recovery.