Maryland Bankruptcy Lawyers
Our Maryland bankruptcy lawyers help struggling consumers wipe out debt and get a fresh start by filing bankruptcy. There is nothing wrong or dishonest about filing bankruptcy. Bankruptcy is almost always the best option if you are overwhelmed by debt and you can’t afford to make all your monthly payments. If you are at the point where you have already defaulted on your payments and you are facing collection actions, repossession, or foreclosure, bankruptcy is probably your only realistic option.
How Can Bankruptcy Help You
If you are behind on bills and struggling with debt, bankruptcy is often the best choice. Our Maryland bankruptcy attorneys have extensive experience helping people use bankruptcy to reclaim their lives. Bankruptcy can be used to:
- Wipe out your credit card debt
- Save your house from foreclosure
- Stop wage garnishments and other collection efforts
- Prevent your car from getting repossessed
- Give debtors a second chance and a new start
OUR BANKRUPTCY FEES
| CHAPTER 7 | |
| OUR FEE = | $700 |
| FILING FEE (COURT) = | $338 |
| CHAPTER 13 | |
| UPFRONT FEE = | $700 |
| FEES IN PLAN = | $3,500 |
| FILING FEE (COURT) = | $313 |
Will Bankruptcy Hurt Your Credit?
If you still have a good credit score, filing bankruptcy will definitely bring it down. However, if your credit score is already low filing bankruptcy won’t really make it much worse. If you have already defaulted on some of your loans or are facing collection actions, or foreclosure, then your credit score is already very low.
When your credit score is already low, filing a Chapter 7 bankruptcy will actually help you to rebuild your credit in the long term. A Chapter 7 bankruptcy will wipe out all your debt and give you fresh start. Most people see a small increase in their credit score shortly after they get their Chapter 7 discharge.
Successfully completing a Chapter 13 bankruptcy will also help, but Chapter 13 bankruptcies involve repayment plans and take several years to complete. During that time, you actually will not have a credit score because you will have a pending bankruptcy case.
Chapter 7 vs. Chapter 13
Individual consumers can file 2 different types of bankruptcy: Chapter 7 or Chapter 13. In a Chapter 7 bankruptcy you can wipe out all of your debt without having to pay anything back to creditors. A Chapter 7 is faster, less complicated, and less expensive than a Chapter 13. However, not everyone will be eligible to file a Chapter 7. If you make too much money or have too much equity in your house, Chapter 7 will not be an option.
In a Chapter 13 bankruptcy, you will be required to make monthly payments over a period of either 3 or 5 years. These monthly payments will be collected by the bankruptcy trustee and then distributed to your creditors. You don’t have to repay all of your debt, just a small percentage. At the end of the 3 or 5 year “bankruptcy repayment plan,” the remaining balance on your debts will get discharged.
The amount of the monthly payments that you have to make in a Chapter 13 bankruptcy are based on your “disposable monthly income.” You must pay all of your disposable income into the bankruptcy plan each month. The amount of your disposable monthly income is something you negotiate with the bankruptcy trustee. You submit a budget showing your monthly income and living expenses and the leftover amount is your disposable income. The bankruptcy trustee will review the budget and will object if they think you can afford to pay more each month. See our page on Chapter 13 plan payments for more details on how this works.
Is There An Income Limit For Bankruptcy?
There is an income limit for a Chapter 7 bankruptcy, but not for Chapter 13. As explained in more detail below, a Chapter 7 lets you wipe out all your debt without paying anything back to your creditors. A Chapter 13 requires you to make monthly payments over several years to pay back a small portion of your debt. Debtors who make too much money are not eligible for Chapter 7 and will be required to file Chapter 13.
Income Limit For Chapter 7
The income limits for a Chapter 7 bankruptcy are based on your “disposable” monthly income, which basically means your net take home income. If your disposable monthly income is under $8,000, you will automatically qualify for a Chapter 7 in Maryland. If your monthly income is over $13,000, you will NOT be eligible for a Chapter 7 and must file a Chapter 13. If your monthly income is somewhere between $8,000 and $13,000, you have to do additional “means test” calculations to determine your eligibility.
The income limit to qualify for a Chapter 7 bankruptcy is based on your net “household income” which includes both spouses (even if only 1 spouse is filing bankruptcy). Certain types of income, such as social security or disability benefits, are not included. There is also a somewhat complicated formula that takes into account the number of people in your household. Another important thing to note is that this is NOT based on your gross income. It is based on your net monthly income after you deduct certain expenses such as taxes, car and house payments, etc.
Contact Us About Bankruptcy
Our Maryland bankruptcy lawyers have helped hundreds of people get through the bankruptcy process. We are not a “bankruptcy mill” that files hundreds of cases every week. We handle only a small number of bankruptcy cases so we can give clients the individual attention that they need and deserve.
If you are thinking about filing bankruptcy and have questions or concerns, contact us for a free consultation.