Navigating Maryland’s Bankruptcy Court System

Understanding the intricacies of Maryland’s bankruptcy court system can be pivotal for individuals and businesses facing financial difficulties. Whether you're considering filing for Chapter 7 or Chapter 13 bankruptcy, knowing the steps, requirements, and potential outcomes can significantly aid in your decision-making process.

Types of Bankruptcy in Maryland

Maryland residents typically have two primary options when it comes to filing for bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy, often referred to as liquidation bankruptcy, is designed for those who cannot afford to repay their debts. This type of bankruptcy can discharge most unsecured debts, providing a fresh financial start.
Chapter 13, on the other hand, is a reorganization bankruptcy that allows individuals to create a repayment plan to pay back their debts over a period of three to five years. This option is suitable for those who have a regular income and can afford to make monthly payments, but still require relief from overwhelming debts.

The Process of Filing

Filing for bankruptcy in Maryland begins with gathering all pertinent financial information, including debts, assets, income, and expenses. It is crucial to complete the mandatory credit counseling course from an approved provider before filing. After counseling, you can fill out your bankruptcy petition, which should be filed in the appropriate U.S. Bankruptcy Court.

The Maryland bankruptcy court system has two main divisions: the Maryland District Bankruptcy Court and the United States Bankruptcy Court for the District of Maryland. It's important to file in the correct venue, which is typically based on your residence or business location.

Filing Fees and Deferring Costs

Filing fees for bankruptcy can vary, so it's essential to check the current fee schedule published by the Maryland bankruptcy court. If you're unable to afford the fees, you may qualify for a fee waiver or be allowed to pay the fees in installments, making the process more accessible.

Creditors and Bankruptcy Hearings

Upon filing, an automatic stay is put in place, which prohibits creditors from pursuing collection efforts against you. A creditors’ meeting, also known as the 341 meeting, is typically scheduled within 20 to 40 days post-filing. During this meeting, you will answer questions under oath regarding your financial situation, allowing creditors to assess your case. It is essential to attend this meeting and be prepared to provide accurate information.

The Role of a Bankruptcy Attorney

Navigating the bankruptcy process can be complex, and seeking the counsel of a experienced bankruptcy attorney can be invaluable. An attorney will help evaluate your financial situation, determine the best type of bankruptcy for your needs, and guide you through every step of the way, ensuring compliance with all legal obligations and maximizing the benefits of filing.

Post-Bankruptcy Considerations

After the bankruptcy discharge, it's important to take steps towards rebuilding your credit and financial health. Start by creating a budget, maintaining regular payments on any remaining debts, and considering secured credit options to help re-establish your creditworthiness.

Maryland's bankruptcy court system, while daunting, offers a means to regain control over your finances. By understanding the types of bankruptcy available, the filing process, and the resources available, you can navigate this challenging time more effectively.