What Should I Know About Chapter 7 Bankruptcy?
February 6, 2026
Chapter 7 bankruptcy can be a very helpful tool when you find yourself trapped by debt and despairing about your financial future. This process can lead to the discharge of some of your debt and a stop to creditor phone calls. There are some costs and trade-offs that you need to know about before you file for bankruptcy, and not every debt is subject to discharge. The best thing that you can do in your situation is to contact a bankruptcy lawyer who can review your circumstances and advise you on a legal path forward. In the meantime, here is what you need to know about Chapter 7 bankruptcy in Maryland.
Your Creditors Must Stop Calling You
One of the biggest forms of relief that you get from Chapter 7 bankruptcy comes right at the beginning of the process. A key feature of all types of bankruptcy cases is the automatic stay. The law demands that your creditors stop all efforts that they were taking to collect on the debts that you owe. This means that they can no longer call or try to contact you. It certainly means that they cannot garnish your wages or attempt to collect on a judgment. There are serious consequences for creditors who violate the automatic stay, meaning that it should keep them from contacting you.
You Can Get Some Debts Forgiven
Chapter 7 bankruptcy has a very crucial form of relief that you need to get a fresh financial start in life. Your unsecured debts could be discharged entirely at the conclusion of the bankruptcy process. These debts may include:
- Credit card balances
- Outstanding medical bills
- Judgments against you for other reasons, such as personal injury damages
- Older tax debts
- Unsecured personal loans
Not every debt is subject to discharge in Chapter 7 bankruptcy, meaning that you should not expect the process to be a panacea. For example, if you owe money in child support or alimony, that debt is not part of the bankruptcy process. The same thing goes if you have a tax debt that is less than three years old. An experienced bankruptcy attorney will explain ahead of time what types of debt you can expect to have discharged at the conclusion of the bankruptcy process.
There Are Some Tradeoffs Involved
Although you get some debt forgiven as part of the Chapter 7 bankruptcy, it does not come without a cost. You do not get something for nothing as part of a Chapter 7 bankruptcy. The specific cost is that you must surrender personal property to the bankruptcy trustee, who would then sell it and use the proceeds to pay your creditors.
Maryland law provides for exemptions that could allow you to keep some of your property. While there is a possibility that you may have to surrender some property, you would not be emerging from the bankruptcy process with nothing.
You Can Begin to Rebuild Your Credit Afterward
Some people may be afraid to seek Chapter 7 bankruptcy protection because they think that the effects will remain with them permanently. It is true that a Chapter 7 bankruptcy will remain a part of your credit record for seven years. However, that is not the end of the story. You may even begin to notice some minor improvements to your credit score within a year after the bankruptcy process is complete. Over time, you can begin to slowly take out new credit loans and rebuild your score. You can expect that the effects of bankruptcy on your credit history will dissipate over time, especially if you maintain a record of on-time payments.
Baltimore Bankruptcy Lawyers at LeViness, Tolzman & Hamilton Will Explain Your Options
If you are in financial distress and you feel like you have no way out, speak to the Baltimore bankruptcy lawyers at LeViness, Tolzman & Hamilton. We can evaluate your situation and let you know whether Chapter 7 is the right option for you. Schedule a free initial consultation by filling out an online contact form or by calling us today at 800-547-4LAW (4529). Our offices are in Baltimore and Owings Mills, Maryland, and we serve clients in the surrounding areas.