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How To File For Bankruptcy?

Understanding the Bankruptcy Process in Rockville, MD

Have you ever played the game of Monopoly and found yourself in a situation where you were forced to mortgage your properties and sell your houses to pay off your debts? In the real world, bankruptcy is a similar concept – a legal process that provides relief for individuals and businesses struggling with overwhelming debt. If you are wondering how to file for bankruptcy, Kurland Law Group is here to help. Our knowledgeable and experienced law practitioners are always ready to provide the best legal assistance. 

In this article, we are going to discuss the following topics for you to have a better understanding of how the bankruptcy process works:

  • What is Bankruptcy?
  • What is the Process of Filing Bankruptcy?
  • Bankruptcy Exemptions in Maryland

 

What is Bankruptcy?

Bankruptcy is a legal process in which individuals and business owners facing financial woes who can no longer pay for their debts can get relief. Declaring bankruptcy is one step towards liquidating assets and paying debts in a comprehensive manner.

There are several types of bankruptcy, such as Chapter 7 bankruptcy, which is the most common type for individuals, and Chapter 11 bankruptcy, which is commonly used by businesses. The specific rules and procedures for bankruptcy can vary depending on the jurisdiction in which it is filed. 

If you are living in a free state, it is very beneficial to consult a bankruptcy lawyer in Maryland. At Kurland Law Group, our knowledgeable law practitioners are well-informed about the state’s bankruptcy laws. We can ensure that you can get the best guidance you need if you are planning to file bankruptcy.  

What is the Process of Filing Bankruptcy?

When it comes to filing a bankruptcy, the process is not easy. You have to prepare the necessary documents that will support that you are indeed eligible for filing either Chapter 7 or Chapter 11 bankruptcy.

Here are the process involved in filing bankruptcy:

Get Credit Counseling 

First and foremost, before filing for bankruptcy, you should undergo credit counseling from an approved or reliable credit counseling agency. The counseling session can be done online or over the phone, and it typically lasts about an hour or two to complete the process.

Determine the Type of Bankruptcy

There are three common types of bankruptcy: Chapter 7, Chapter 11, and Chapter 13. You should consult with a bankruptcy attorney to determine which type of bankruptcy is right for you.  You have to also determine the eligibility in such types of bankruptcy as well.

File a Bankruptcy Petition 

Once you have determined the type of bankruptcy you will file, you must complete the necessary forms and file a bankruptcy petition with the bankruptcy court in your district.

Here’s what you need when filing a bankruptcy petition:

  • Credit counseling certificate
  • Bankruptcy petition
  • List of creditors
  • List of assets
  • List of liabilities
  • Income and expense statements
  • Tax returns
  • Pay stubs
  • Bank statements
  • Property deeds and titles

It is important to note that the specific documents and information required may vary depending on the type of bankruptcy you are filing and the specific requirements of the bankruptcy court in your state. It is recommended that you consult with a Maryland bankruptcy attorney for guidance on what information and documents you will need to provide.

Submit Required Documents

Along with the bankruptcy petition, you must submit several documents, including a list of creditors, a list of assets and liabilities, income and expense statements, tax returns, and proof of completion of credit counseling.

Attend the Meeting of Creditors

You will be required to attend a Meeting of Creditors, also known as a 341 meeting, where you will be questioned by the trustee and your creditors about your financial situation. The length of this meeting usually lasts from 10-15 minutes but may vary according to your individual case.

Complete a Financial Management Course

After filing for bankruptcy, you must complete a financial management course from an approved agency in Maryland. This ensures that you are complying with the bankruptcy law and you have learned the financial management skills to effectively manage your finances. It is also important to know that you are responsible for your finances. After completing the course, you’ll receive a certificate that you will then need to present to the interested parties. 

Receive a Discharge of Debts

If your bankruptcy case is successful, you will receive a discharge of your debts, which means that you are no longer legally obligated to pay them. 

It is important to note that the bankruptcy process can be complex and it is recommended that you seek the advice of a bankruptcy attorney to help guide you through the process.

Bankruptcy Exemptions in Maryland

Bankruptcy exemptions refer to the property that you are allowed to keep when you file for bankruptcy. In Maryland, you have the option to use either the federal bankruptcy exemptions or the Maryland state exemptions. Here are the Maryland state exemptions:

  • Homestead – You can exempt up to $25,150 of equity in your real estate property such as co-op, condominium, house or permanently affixed home) 
  • Personal Property – You can exempt up to $5,000 of personal property, which includes household appliances, furnishings, clothing, pets and other personal items.
  • Retirement Benefits – Certain ERISA retirement accounts, such as 401(k)s, IRAs, and pension plans, are exempt from bankruptcy.
  • Public benefits, support and earnings – Public benefits, such as unemployment benefits, social security benefits, and workers’ compensation benefits, are exempt from bankruptcy.
  • Wildcard exemption: – You can exempt up to $6,000 of any property of your choice.

It is important to note that the exemptions listed above are subject to certain limitations and restrictions. For example, the homestead exemption is limited to $25,000 if you are under 60 years old and $50,000 if you are over 60 years old or disabled. 

Additionally, some of the exemptions may only apply to specific types of property or may be subject to specific dollar limits. It is recommended that you consult with a bankruptcy attorney to determine which exemptions apply to your specific situation.

Call our Rockville, MD Bankruptcy Attorney Now!

We know that bankruptcy is not an easy journey. It is very draining knowing that you are in this complicated situation.  But you don’t have to go through it alone, Kurland Law Group has years of combined experience helping clients navigate the bankruptcy process and find a path to financial freedom. 

Our Rockville legal team is trusted in providing experienced legal services for individuals and businesses. Don’t let overwhelming debt hold you back any longer. Contact Kurland Law Group today to schedule a free case evaluation with one of our experienced bankruptcy attorneys.

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