• If you are weighing the pros and cons of filing for bankruptcy in Maine, you might just find it to be a timely and proven solution to your financial struggles. Bankruptcy doesn't need to be thought of in a negative way, especially if you remember that filing for bankruptcy was originally intended to give people facing financial struggles a clean slate. This page shows you How to File for Maine Bankruptcy.

  • Disclaimer

    The content in this page is not a substitute for professional financial advice. Please contact your financial adviser before using the information presented here.

  • Introduction

    Bankruptcy filings always take place in federal court because bankruptcy falls under the domain of federal law in every single state across America. However, Maine state law can still play a role at certain points along the way, especially when determining what assets that you own are or aren't protected from a forced sale or liquidation.

  • Step 1: What is Chapter 7 Bankruptcy?

    Chapter 7 bankruptcy is a legal procedure created to free a person from their unsecured debt obligations when they are facing serious financial challenges in the USA. However, it doesn't automatically rid the filing party of secured debt backed by collateral like car payments or mortgages. This form of bankruptcy, since it's faster and less complicated than a Chapter 13 filing, is sometimes called a liquidation or straight bankruptcy. Understandably, many people are initially against the idea of filing for Chapter 7 due to what they've been told about asset sales, but the liquidation of any personal or household items can often can be avoided if you pass the bankruptcy means test covered in the next step below. Even if you ultimately decide against a Chapter 7 filing, a Chapter 13 restructuring may still be a good fit.

  • Step 2: The Chapter 7 Income Test

    Passing the means test is required to declare Chapter 7 bankruptcy. To pass, you must prove that your total family income is equal to or less than Maine's state median. Though this median is released by the Census Bureau, it does vary depending on the size of your household. The following maximum incomes apply for cases filed after March 15, 2009http://research.lawyers.com/Maine/Bankruptcy-in-Maine.html:

    1. Single individual: $40,618
    2. Two person family: $52,065
    3. Three person family: $64,342
    4. Four person family: $69,714
    5. Five+ person family: $69,714 plus $6,900 for each extra individual over four

  • Step 3: Chapter 7 Exemptions for Maine

    When seriously considering a bankruptcy filing in Maine, it's critical that you consult with a bankruptcy attorney as soon as possible. They can help you work through which exemptions you have a right to claim. Once you have confirmed that you are allowed to declare chapter 7 bankruptcy after passing the means test discussed above, your attorney will formulate a strategy to keep as many of your assets as possible (and in many cases all of them). However, here are a just a few of the exemptions allowed in Maine under the 2009/2010 guidelines:http://research.lawyers.com/Maine/Bankruptcy-in-Maine.html

    1. Tools of the trade to $5,000
    2. One cooking stove, all furnaces or stoves used for heating and cooking and heating fuel
    3. Up to $6,000 of any unused residence exemption towards clothing, furniture, appliances, tools of the trade, legal awards and life insurance benefits
    4. One motor vehicle, up to $5,000 in value
    5. A payment to $12,500 for personal bodily injury
    6. Your residence or burial plot to $47,500 or $90,000 if minor dependents live with you or if you or any of your dependents are either at least 60 years old or disabled
    7. Professionally prescribed health aids
    8. Food for six months
    9. Alimony, support or separate maintenance necessary for support
    10. One boat, not exceeding 5 tons burden, used for commercial fishing

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