Baltimore Bankruptcy Lawyers

Filing for bankruptcy is often viewed as a last resort when managing overwhelming debt. However, bankruptcy provides a legal remedy to regain control over finances, stop creditor harassment, halt foreclosure, and discharge certain unsecured debts. In Baltimore, individuals facing financial challenges can take advantage of the protection and relief that bankruptcy offers through either Chapter 7 or Chapter 13 bankruptcy.

Understanding the differences between these two types and knowing whether bankruptcy is the right decision can help you make informed choices and move toward a better financial future.

Types of Bankruptcy: Chapter 7 vs. Chapter 13

Chapter 7 Bankruptcy:

Chapter 7 bankruptcy is the most common and quickest option for individuals looking to discharge unsecured debts such as medical bills, credit card balances, and personal loans. The process involves liquidating certain assets to repay creditors, but in many cases, the debtor retains most of their property. Key points of Chapter 7 bankruptcy include:

  • Asset Liquidation: Certain non-exempt assets may be sold to satisfy debts, but many debtors lose little or no property due to exemptions.
  • Dischargeable Debts: Unsecured debts, such as medical bills and credit card debts, are typically discharged.
  • Non-Dischargeable Debts: Some debts, including child support, alimony, certain tax debts, and student loans, cannot be discharged under Chapter 7.
  • Eligibility Requirements: Individuals must meet specific income requirements, have no prior bankruptcies in the past eight years, and complete mandatory credit counseling.

Chapter 13 Bankruptcy:

Chapter 13 bankruptcy is often called a “wage-earners plan” because it allows individuals with a regular income to restructure their debt. This type of bankruptcy creates a court-approved repayment plan to pay back part or all of the debt over three to five years. Key points of Chapter 13 bankruptcy include:

  • Debt Reorganization: Debts are reorganized into a manageable repayment plan approved by the court.
  • Retention of Assets: Unlike Chapter 7, individuals in Chapter 13 can retain their secured assets, such as a home or car, as long as they adhere to the repayment plan.
  • Protection Against Foreclosure: Chapter 13 stops foreclosure actions, giving individuals time to catch up on missed mortgage payments.
  • Dischargeable Debts: More types of debt are eligible for discharge under Chapter 13 than under Chapter 7, including certain tax debts and arrears on secured loans.
  • Protection for Co-Signers: Chapter 13 offers protection to co-signers, meaning they are not held liable for the debt while the borrower is under bankruptcy protection.

Is Bankruptcy Right for You?

Deciding whether to file for bankruptcy can be difficult, and many individuals hesitate due to the stigma associated with it. However, bankruptcy can be a responsible way to regain control over finances and avoid further financial hardship. Bankruptcy may be right for you if:

  • You have little to no disposable income left after basic living expenses.
  • Your total debt exceeds half of your annual income.
  • Your income falls below the state median for your household size.
  • You face a repayment period that exceeds five years, making debt repayment unlikely.
  • Your debt is significantly affecting various aspects of your life, including your ability to pay for necessities or causing high levels of stress and anxiety.

What Are the Benefits of Bankruptcy?

Filing for bankruptcy is not a sign of failure but rather an opportunity to reset your financial situation and regain stability. Here are the primary benefits:

  • Prevent Foreclosure and Eviction: Bankruptcy can halt the foreclosure process on your home or the eviction process from your rental property.
  • Stop Repossession: Bankruptcy prevents creditors from repossessing vehicles, which may be essential for work and daily life.
  • Cease Creditor Calls and Collection Efforts: Once you file for bankruptcy, creditors must cease calls, collection efforts, and wage garnishment.
  • Eliminate Unsecured Debt: Credit card debt, personal loans, and medical bills can be discharged through bankruptcy.
  • Protect Against Wage Garnishment: Bankruptcy stops wage garnishment for certain types of debts.
  • Remove Court Judgments: Bankruptcy can eliminate court judgments resulting from unpaid debts.
  • Stop Ongoing Legal Actions: Bankruptcy halts lawsuits and legal actions related to unpaid debts.

The Bankruptcy Filing Process in Maryland

In Maryland, bankruptcy petitions are filed in the U.S. Bankruptcy Court for the District of Maryland, which has locations in both Baltimore and Greenbelt. The process involves several key steps:

  • Filing the Bankruptcy Petition: The first step is to file the bankruptcy petition and supporting documents, which include financial disclosures, a list of creditors, and proof of income.
  • Credit Counseling: Before filing, individuals must complete credit counseling through an approved agency, which helps evaluate whether bankruptcy is the best option.
  • 341 Meeting of Creditors: After filing, the debtor must attend a meeting with creditors to provide additional financial information.
  • Financial Management Course: Debtors are required to complete a financial management course, which educates individuals on how to manage their finances after bankruptcy.

An automatic stay takes effect upon filing, preventing creditors from pursuing collection actions such as wage garnishments, foreclosures, and lawsuits.

Bankruptcy Exemptions in Maryland

Maryland’s bankruptcy laws do not permit the use of federal bankruptcy exemptions. Instead, individuals must use Maryland’s state-specific exemptions. Common exemptions include:

  • Homestead Exemption: Protects up to $25,150 in equity in a primary residence.
  • Personal Property Exemption: Protects up to $5,000 for household goods, clothing, and cash.
  • Work-Related Tools: Protects up to $5,000 for tools necessary for your profession.
  • Wages: Protects the greater of up to 75% of disposable earnings or 30 times the federal minimum wage.
  • Retirement Accounts: 401(k) accounts, IRAs, and pensions are typically exempt.
  • Public Benefits: Social Security, unemployment, and disability benefits are protected from creditors.

Do You Need a Lawyer to File for Bankruptcy?

While filing for bankruptcy without a lawyer is possible, the process can be complicated and overwhelming. Filing for bankruptcy involves navigating complex state and federal laws, completing numerous forms accurately, and meeting strict deadlines. Without the proper legal guidance, you may miss crucial details that could jeopardize your case.

The experienced bankruptcy lawyers at LeViness, Tolzman & Hamilton can assist you in several ways:

  • Assessing Your Financial Situation: Our attorneys can help you determine whether bankruptcy is right for you based on your unique financial circumstances.
  • Guiding the Filing Process: We will ensure all necessary documents are filed correctly and on time.
  • Stopping Creditor Harassment: We can stop creditor calls, collections, and lawsuits.
  • Protecting Assets: We will work to help protect your assets, such as your home and car, during the bankruptcy process.
  • Handling Debt Repayment Plans: If you are filing for Chapter 13, we will assist you with setting up a manageable repayment plan.

Filing for bankruptcy is a powerful tool for those struggling with overwhelming debt, but navigating the process without professional help can be daunting. The bankruptcy attorneys at LeViness, Tolzman & Hamilton are here to provide the support and guidance needed to get through the process smoothly. If you are considering bankruptcy, contact our office today for a consultation and take the first step toward a fresh financial start.

Contact the Baltimore Bankruptcy Lawyers at LeViness, Tolzman & Hamilton

If you are ready to explore your bankruptcy options, the experienced Baltimore bankruptcy lawyers at LeViness, Tolzman & Hamilton are here to help. Call us today at 800-547-4LAW (4529) or contact us online for a free consultation.

We have offices in Baltimore, Glen Burnie, Lanham, and Owings Mills, allowing us to represent clients in Maryland, including those in Anne Arundel County, Baltimore County, Carroll County, Harford County, Howard County, Montgomery County, Maryland’s Western Counties, Prince George’s County, Queen Anne’s County, Southern Maryland, and the Eastern Shore, as well as the communities of Catonsville, Essex, Halethorpe, Middle River, Rosedale, Gwynn Oak, Brooklandville, Dundalk, Pikesville, Nottingham, Windsor Mill, Lutherville, Timonium, Sparrows Point, Ridgewood, and Elkridge.