Reviewing Possible Chapters with a Bankruptcy Law Attorney in Baltimore

Maryland consumers could utilize a bankruptcy case to eliminate their debts effectively. These opportunities allow them to choose between liquidation and a structured payment plan to settle their debts. The choice of chapter determines which structure is available to them and how the case proceeds. A Bankruptcy Law Attorney in Baltimore helps the client make this choice.

Eligibility Requirements for Bankruptcy

For Chapter 13, the individual must have an income that is larger than the average for his or her area. Currently, the average income for the Baltimore area is $70,004 per year. The consumer must provide an income statement that shows an income level that exceeds this value. If the income is below this value, the consumer qualifies for Chapter 7 only.

Payment Plans or Liquidations

Chapter 13 is a repayment plan. A consumer who qualifies for this chapter works with his or her attorney to create this plan. The consumer must define a monthly payment for each debt that reflects his or her total income, minus monthly obligations. The consumer faces restrictions with the disposable income as well. He or she must use this portion of the income to pay any debt that isn’t included in the case.

Liquidation allows the consumer to sell property to generate money to settle the debt. The court sells any property or asset included in the claim. A trustee manages the distribution of money generated from the sale to the creditor.

Prerequisites for Filing for Bankruptcy

Any consumer filing a bankruptcy claim must complete a credit counselling program. The program explains how to manage debt properly and rebuild the consumer’s credit after bankruptcy. The consumer must provide a certificate of completion to the court.

Preventing Foreclosure and Repossession

The automatic stay offered through bankruptcy prevents the lender from taking the consumer’s home. It lasts for the full duration of the case. For Chapter 13, the automatic stay lasts up to five years. It lasts up to six months.

A Maryland consumer could use a bankruptcy claim to settle debts. The opportunity is based on the type of claim filed.

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