Common Questions About Chapter 7 Bankruptcy in Maryland: FAQs AnsweredJune 17, 2023
You may wonder whether filing for Chapter 7 bankruptcy makes sense. It helps to understand as much as you can about the process. You should contact an experienced attorney to learn more about how bankruptcy can impact you. In the meantime, here are the answers to some commonly asked questions about Chapter 7 bankruptcy.
Will Chapter 7 Bankruptcy Stop Creditors From Calling Me?
Yes. When you file for bankruptcy, something called an automatic stay goes into place. Creditors cannot take any steps to collect a debt you owe them, including phone calls. Creditors can get into serious trouble with the bankruptcy court when they violate the automatic stay.
What Are the Benefits of Chapter 7 Bankruptcy?
After the Chapter 7 process, some of your debts could be discharged. You would not need to pay them back anymore, meaning you would get a fresh financial start. At that point, you can begin to rebuild your financial life.
Are All My Debts Discharged in Bankruptcy?
Not every debt is discharged. Generally, your unsecured debts would be discharged. This category would include things like credit card debt and personal loans. However, other debts are not dischargeable. For example, you would still need to pay back student loans and tax debts that became due in the last three years.
What Is the Catch in Chapter 7 Bankruptcy?
You may think that the debt discharge in a Chapter 7 bankruptcy sounds too good to be true, and you wonder what you must give to get it. A Chapter 7 bankruptcy is a liquidation, meaning the court would take your assets to pay creditors back. Then, the debts that remain would be discharged.
Can I Keep My House in Chapter 7 Bankruptcy?
Maryland has a homestead exemption that may allow you to keep your home in bankruptcy if you do not have equity. If you have equity, you are limited in the amount you may retain. If the house is titled in both spouses’ names, and one spouse is filing for bankruptcy, they may keep the house if there is no other joint debt between the spouses other than the mortgage. If you are worried about losing your home, you should opt for a restructuring instead of a liquidation. Your ability to keep your home depends on your ability to make your mortgage payments on time.
Is Everyone Allowed to File for Chapter 7 Bankruptcy?
No. Eligibility for Chapter 7 bankruptcy depends on your income. A strict means test limits Chapter 7 bankruptcy to those with an income lower than a certain amount. In Maryland, Your eligibility for Chapter 7 depends on your household size and the amount of household income. Your home must earn less than the Maryland median income.
Is Bankruptcy Off Limits if I Cannot File Chapter 7?
No. You can still file for bankruptcy but would not get the discharge you would receive in a Chapter 7 bankruptcy. Instead, you would file a Chapter 13 bankruptcy. This type of bankruptcy is a restructuring that would renegotiate your debt and give you additional time to pay.
Do I Need a Lawyer for Chapter 7 Bankruptcy?
While there is no legal requirement for a lawyer, you are better off getting legal advice from an experienced attorney. Mistakes can jeopardize the potential success of your bankruptcy process. Further, you could even face criminal penalties if you violate bankruptcy law.
Contact a Baltimore Chapter 7 Bankruptcy Lawyer at LeViness, Tolzman & Hamilton for Legal Help Today
If you have questions about your eligibility or how the process works, a Baltimore Chapter 7 bankruptcy lawyer at LeViness, Tolzman & Hamilton can help. You can call us at 800-547-4LAW (4529) or contact us online to schedule a free consultation.
We have offices in Baltimore, Glen Burnie, Lanham, and Owings Mills, allowing us to represent clients in Maryland, including those in Anne Arundel County, Baltimore County, Carroll County, Harford County, Howard County, Montgomery County, Maryland’s Western Counties, Prince George’s County, Queen Anne’s County, Southern Maryland, and the Eastern Shore, as well as the communities of Catonsville, Essex, Halethorpe, Middle River, Rosedale, Gwynn Oak, Brooklandville, Dundalk, Pikesville, Nottingham, Windsor Mill, Lutherville, Timonium, Sparrows Point, Ridgewood, and Elkridge.