If you are struggling financially, filing bankruptcy under Chapter 7 in Maryland may be a solution. According to the United States Bankruptcy Court District of Maryland, Chapter 7 allows you to liquidate your assets in order to pay your debts. But it can be frustrating and confusing to understand how the process works and get the information you need. This may deter you from making a choice that can get rid of overwhelming debt.
Sometimes, all you need to gain confidence and begin the process is a basic understanding of Chapter 7 bankruptcy laws and requirements.
Passing the means test
In order to be eligible under Chapter 7 of the bankruptcy code, you must be able to pass a means test. Your income must be less than the average Maryland income. If you fail the means test, the court may convert your case to Chapter 13.
Counseling and education
You must complete a credit counseling course prior to filing for bankruptcy. Completion of a debt management program is required after you file. You can only take courses from providers and organizations that are approved by the U.S. Trustee Program.
Federal and state laws allow certain exemptions under Chapter 7. If any of your property qualifies as exempt, you do not need to give it up. Certain amounts and types of home equity, insurance benefits, lawsuit awards, personal property and support payments may be exempt.
Your bankruptcy filing begins when you fill out the necessary paperwork known as bankruptcy schedules. These forms require you to disclose every detail of your finances, including income, property, expenses, debt and property transactions.
This information is solely educational and is not legal advice.