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Chapter 13 Bankruptcy Lawyers in Maryland
Looking to File Chapter 13 in Maryland?
Due to the poorly conceived “Means Test,” which is supposed to rule out persons who are seeking to misuse the bankruptcy system, many Marylanders have been compelled to file a Chapter 13 bankruptcy (rather than a Chapter 7) since 2005. Many individuals who might and should file a Chapter 13 bankruptcy, on the other hand, discover that they couldn’t make the monthly payments required to keep it going. To avoid making uninformed decisions, it is smart to get the services of a reliable bankruptcy law firm in Towson, Maryland. With the help of competent Chapter 13 bankruptcy lawyers, you will be more guided in choosing the bankruptcy petition that is suitable for your financial situation. In the meantime, allow us to share with your our take on the following questions commonly asked about Chapter 13 bankruptcy:
- What is Chapter 13 Bankruptcy?
- How to File Chapter 13 Bankruptcy in Maryland
- Locate a Chapter 13 Bankruptcy Lawyer to Guide You
Most of the folks who come to see us want to avoid Chapter 13 bankruptcy because they believe this “repayment plan” isn’t as favorable as Chapter 7. But that isn’t the case. A Chapter 13 bankruptcy may be the best choice for certain individuals.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is often referred to as a wage earner’s plan. It allows people with a regular source of income to create a repayment plan for all or a portion of their obligations. Under this chapter, debtors offer a way to settle debts to creditors in the form of installment payments over a three- to five-year period. If the debtor’s current monthly income is less than the appropriate state median, the plan will last three years unless the court grants an extension “with reason.”
Advantages of Chapter 13
Chapter 13 bankruptcy is a three- to five-year payment schedule. For others, the duration of the payment plan may be depressing, and Chapter 7 bankruptcy may first seem to be a better option. However, Chapter 13 offers several benefits, some of which are not accessible in Chapter 7, and it may be the best long-term financial answer for you.
Several benefits of Chapter 13 bankruptcy include the following:
- enabling you to pay just what you can afford
- discharge obligations you cannot pay in full
- preventing your property from foreclosure, and
- eliminating a larger second mortgage.
Chapter 13 Bankruptcy Qualification
So long as the total debt is below the threshold, anybody with a steady median income may declare bankruptcy under Chapter 13. The individual’s earning level influences the payback schedule.
If your salary surpasses the state median income, you’ll pay off your obligations in five years. If your salary is below the median, you will be repaid over 3 years.
Here are some requirements for filing a bankruptcy under Chapter 13:
- A regular income
- Up-to-date tax returns and payments
- Personal and unsecured credit card debts can’t exceed $394,725.
- Secured debt that does not exceed $1,184,200 (mortgage or auto loan).
- No bankruptcy was dismissed for failing to attend or cooperate during the last 180 days.
- No discharge from a Chapter 13 bankruptcy during the last two years, or from a Chapter 7, Chapter 11, or Chapter 12 bankruptcy within the last four years.
How to File Chapter 13 Bankruptcy in Towson
At the Grafton Firm, you’ll always meet with an attorney who will go over your financial situation with you and help you come up with the finest solutions for getting out of debt.
If Chapter 13 is your best choice:
- We’ll start with your Petition and Schedules.
- We’ll then collaborate with you to craft the best possible plan for the Court. The Court must approve the scheme.
- After all the paperwork is completed, we will sign and e-file your bankruptcy.
This process may take two sessions. We’ll decide and plan the remainder of the process during our first meeting. Your Chapter 13 Bankruptcy Attorneys will require various documents and paperwork to draft your Bankruptcy Schedules. Don’t worry, we’ll walk you through it all and give you a checklist.
Life after a Chapter 13 Bankruptcy
Once a repayment plan has been approved by the United States bankruptcy court, the debtor is solely responsible for making the budget work. Defaulting on agreed-upon payments might result in the debtor’s property being sold to cover their obligations, which could lead to additional court proceedings. As an alternative, the trustee might ask for a dismissal of the lawsuit.
It’s possible to get a break from creditors by filing for bankruptcy, but there is a price to pay on a credit report. Chapter 13 bankruptcy will remain on a credit record for seven years under the Fair Credit Reporting Act. Creditors in this circumstance may have difficulty obtaining more credit for years.
Some individuals fear losing their homes to foreclosure because of struggling with debt, in which case Chapter 13 bankruptcy may be a viable option. A bankruptcy attorney should be consulted before embarking on this path.
Courses and Fees for Filing Are Both Required
While filing for bankruptcy, you’ll be required to provide proof of mandated credit counseling from an organization certified by the United States Trustee’s office, as well as pay a bankruptcy filing fee. An evaluation of your financial situation might be made throughout the session. Your case will be followed by a second “debtor education” session.
There is a price of between $25 and $35 for each course since providers are required to give counseling for free or at reduced rates if you can’t afford to pay, but Chapter 13 filers are seldom eligible for the reduction. A list of authorized credit counseling and debt education companies may be found on the website of the U.S. Trustee.
When Will I Be Free of My Debts?
On average, it takes four years to dismiss all outstanding debts in Chapter 13 bankruptcies since repayment programs might take up to five years to complete.
If you lose your employment, you may be able to negotiate a change in your strategy. The trustee must be informed before you miss a payment, otherwise, you risk having your case thrown out.
You may be eligible for a hardship discharge if you suffer a significant accident or sickness while enrolled in Chapter 13. Only if the hardship was beyond the debtor’s control do creditors get at least as much as they would under Chapter 7, and altering the plan is not conceivable.
Locate a Chapter 13 Bankruptcy Lawyer to Guide You
There is minimal space for mistakes in Chapter 13 plans, hence they are the most challenging. A Towson bankruptcy attorney is crucial in this situation. In the event that you’re drowning in debt and can’t keep your head above water, filing for Chapter 13 bankruptcy may be the solution. Learn more about the Grafton Firm’s services by contacting us now and getting the legal aid you need.