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If you're considering filing for bankruptcy in Maryland, you may find it to be a timely solution to your financial issues. Bankruptcy doesn't need to be thought of in a bad way, especially when you remember that filing for bankruptcy was originally meant to give people facing financial challenges a clean slate. This page shows you How to File for Maryland Bankruptcy.
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The 6 Chapters of Bankruptcy
In this video, Attorney Brett Weiss talks about how there are actually 6 different bankruptcy chapters, although four of them will likely not apply to you. After briefly listing the first four, he goes into detail about Chapter 7 and 13 filings including what each one can achieve and how long they can each last.
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Introduction
Your bankruptcy is going to take place in federal court since bankruptcy falls under the umbrella of federal law right across the USA. However, Maryland law can still factor in at certain points along the way, like when determining which assets are protected from sale and what the maximum dollar value of those items can be. -
Step 1: What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a legal process created to free a person facing financial struggles from their unsecured debt obligations in the USA. However, it does not automatically get rid of all secured debt backed by collateral like a secured line of credit, mortgage or car payment. This form of bankruptcy, being faster and less complicated than a Chapter 13, is sometimes called a straight or liquidation bankruptcy. Some people are apprehensive about filing for Chapter 7 due to what they've read about asset sales, but the liquidation of any of your household items can often can be completely avoided if you pass the means test as covered in Step 2 below. Always keep in mind that a Chapter 13 filing is still a possibility if you determine that a Chapter 7 will not fit your specific circumstances -
Step 2: The Chapter 7 Income Test
Passing the means test so that you're able to declare Chapter 7 bankruptcy requires demonstrating that your total salary or income is equal to or less than the state median in Maryland. Though this median is determined 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/Maryland/Bankruptcy-in-Maryland.html:- Single individual: $55,543
- Two person family: $73,947
- Three person family: $84,952
- Four person family: $103,719
- Five+ person family: $103,719 plus $6,900 for each extra individual over four
Step 3: Chapter 7 Exemptions for Maryland
When contemplating a bankruptcy filing in Maryland, one of the first things to do is consult with a bankruptcy attorney and familiarize yourself with what exemptions you have a right to claim. Once you have confirmed that you are free to declare chapter 7 bankruptcy after passing the means test covered above, the lawyer will be able to create a strategy to keep as many of your assets as possible. However, here are a just a few of the exemptions allowed in Maryland under the 2009/2010 guidelines:http://research.lawyers.com/Maryland/Bankruptcy-in-Maryland.html- Aggregate interest in real or personal property to $5,000
- Burial plots and crypts
- ERISA-qualified benefits, except IRAs
- Wearing apparel, books, tools, instruments or appliances necessary for trade or profession to $5,000
- Household furnishings, household goods, wearing apparel, appliances, books and pets to $1,000
- Health aids
- Cash or any property to $6,000
- Life insurance or annuity contract proceeds
- Disability or health benefits
- Lost future earnings recoveries
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