Bankruptcy Statistics

With today’s decline in both the national and global economy, consumers, more than ever, are finding themselves facing difficulty in repaying credit card bills, car payments, medical bills and other similar debts. Many homeowners are faced with possible foreclosure as well. Job security is at an all time low and the unemployment rate continues to climb. What many consumers don’t realize is that there is help available to them in the form of a bankruptcy filing.

The decision to file bankruptcy is never an easy one. By educating yourself on the facts behind bankruptcy however, you can discover that many of the stigmas that were once tied to the process no longer exist. In fact, in today’s economic turmoil, filing for bankruptcy may be the best alternative for your particular financial situation. The increase in bankruptcy filings over the past few years has also led more and more individuals to consider this option as a potential relief from financial burdens.

To begin with, you must decide which type of bankruptcy filing is best for you. The two filing options for consumers are Chapter 7 and Chapter 13.

If you would prefer to work with your creditors to develop a repayment plan over a period of time, then Chapter 13 may be the best for you. It allows you to repay your debts in manageable payments divided over three to five years. During this process, you are allowed to retain all of your assets. The Bankruptcy Court will appoint a trustee to work directly with you and your lawyer to develop a fair and flexible plan based on repayment priorities, available income and other expenses. A Chapter 13 filing will remain on your credit report for a period of 7 years.

Chapter 7 filings involve qualifying debts potentially being discharged as opposed to having to be repaid. Most credit card debt, unsecured loans and similar debts will be wiped out once your filing has been approved by the courts. When filing Chapter 7 bankruptcy, Maryland law allows individuals to retain the following items:

• Most household items up to $1,000 in value
• Disability benefits
• Disability or health benefits
• Professional tools up to $5,000 in value
• 3/4 of disposable wages
• Property or cash equivalent of up to $6,000

In most cases, you will be able to keep your home and car as long as you agree to continue to make payments on them after the bankruptcy has been completed. Chapter 7 bankruptcy essentially creates a clean slate for you to make a fresh start with. A Chapter 7 filing will remain on your credit report for 10 years.

While many of the numbers and facts may seem confusing, there is help available. If you feel bankruptcy may be an option for you or if you just want to request more information please feel free to contact our law form for a free evaluation.