Even though nobody wants to be in this kind of situation, legal protection and an experienced attorney can help you get back on your feet again.
How A Chapter 7 Case Begins
Chapter 7 begins when a petition is filed in one of the Maryland bankruptcy courts. As soon as the filing occurs, an automatic stay goes into effect. This means that creditors can no longer attempt to contact you or attempt to collect payment.
There are two court locations in the district of Maryland where bankruptcy petitions can be filed. You can find the addresses and phone numbers at the District of Maryland Bankruptcy Court website.
The petition must be accompanied by the appropriate forms. A good attorney can help you with gathering the information and completing the paperwork. The court requires information about:
- Assets and liabilities
- Current income and expenses
- Contracts and leases
- Current financial affairs
- Recent tax returns
The court will also ask for a:
- Certificate of credit counselling (credit counseling is required within 180 days before you file for bankruptcy)
- Copy of debt repayment plan, if any, developed through credit counselling
- Evidence of payment from your employers, if any, received within the 60 days before filing
- Monthly net income statement
- Anticipated increases in income or expenses that might occur after filing
- Interest in qualified education accounts
Finally, the following information is also required:
- List of all creditors and the amount of their claims
- Details about your income (source, amount, etc.)
- List of all your property
- Detailed list of your monthly living expenses
Chapter 7 also allows for the filing of exempt property under federal and/or state laws. This property will not be sold to pay creditor claims. Exemptions for the state of Maryland might include:
- Personal home
- Insurance policies
- Personal property (appliances, furniture, clothing, etc.)
- Trade tools
- Wages (amounts may depend on county of residence)
Meeting Of Creditors
The court appointed trustee assumes legal control over your non-exempt assets. These assets are then sold to pay the claims of creditors.
Between 21 and 40 days after the bankruptcy petition is filed, the trustee will hold a meeting where creditors are given a chance to ask any questions or present objections. In many cases the meeting is very brief and only a few, if any, creditors attend.
After the meeting of creditors, if all parties are in agreement, your debts are discharged. This means that you are released from the liabilities outlined in the bankruptcy petition. Creditors are prohibited from taking any further collection action against you regarding these debts. With good legal counsel, discharge is the end result in nearly every case.
Before your debts are fully discharged, you will also be required to attend a debtor education course. This teaches you about personal budget planning, money management, and appropriate credit use.
Disclaimer: This article is not meant to serve as legal advice. You should always consult with an experienced attorney for proper legal advice.
Contact Sirody & Associates at (410) 415-0445 for a FREE Consultation and advice from lawyers that have practiced bankruptcy law for over 20 years. Let our attorneys work to get you back on your feet.
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