When dealing with significant, uncontrollable debt, many people turn to filing for bankruptcy as a solution. Often times, bankruptcy is a way to stop a foreclosure on a house, a repossession on a car, or wage garnishment. If you’re in a troubling financial situation and are looking into your options, you’ll want to know what the advantages are of filing for bankruptcy in Maryland.
State laws on bankruptcy vary, which is why it’s important to understand your legal rights and obligations regarding bankruptcy as a resident of Maryland. When you work with Belsky & Horowitz, LLC, we’ll be sure to go over your options and help you determine if the benefits of filing for bankruptcy outweigh the disadvantages and potential consequences.
Determining If Bankruptcy Is Right for You
While some people associate bankruptcy with reckless spenders or poor budgeting, this is not always the case. In fact, most people in troubling financial situations are victims of uncontrollable circumstances. According to Consumer Affairs, the leading cause of bankruptcy is unexpected medical bills for people with low income.
While bankruptcy is often filed for failed businesses, personal petitions have far outpaced those submitted by businesses. Depending on your situation, there are different bankruptcy options available to you. If, for example, you believe you have sufficient income to repay your debts, but you only believe it’s possible to do so over the span of months or years, you could consider filing Chapter 13 bankruptcy. If your debts significantly outweigh your income and you believe the only way to pay your debts is to liquefy some of your assets, you’ll want to consider Chapter 7 bankruptcy.
The Benefits of Filing for Relief from Debt
Filing for bankruptcy ensures you’ll be able to regroup financially and chart a more positive future. Not only will you no longer have to deal with harassing creditors’ phone calls, letters, and emails, you’ll also be able to maintain a certain baseline for your life. This is because bankruptcy protects assets like your home and vehicle. This way, you won’t have to worry about your basic needs or being unable to travel to work.
When you file for bankruptcy, your debts will be discharged. This means that your legal obligation to pay them will be eliminated. Depending on your situation, you may also be able to challenge the claims of creditors who you believe have committed fraud or are trying to collect more than what you really owe.
Your situation will determine which type of bankruptcy you file. If you’re uncertain which is the right path for you, it’s in your best interests to consult an experienced bankruptcy lawyer.
Reasons to Not File Bankruptcy
While petitioning for bankruptcy can give you a clean slate, it’s not the right decision for everyone. According to the Maryland Legal Aid, you may want to seek different legal options if any of the following situations apply to you:
- Your income is protected from creditors (like Social Security or most pensions) and the value of all your property is less than $12,000. Even if you don’t file for bankruptcy, creditors cannot legally take anything from you.
- If you are likely to fall deeper into debt, you may want to consider waiting to file bankruptcy—as filing will not wipe out your responsibility for future debt.
- If most of your debt is not dischargeable, like with alimony or child support, you will not benefit from filing for bankruptcy.
- If you only owe a small amount of debt, you’ll want to consider working out a payment plan with your creditors first.
Speak with an Experienced Bankruptcy Attorney
While you are not legally required to have a lawyer to file for bankruptcy, working with one will help you understand your legal rights and options and avoid any mistakes that could harm your financial future further. Your attorney will also ensure the assets you are allowed to protect remain in your possession.
While there are a number of bankruptcy preparer services available that can help you prepare and file your petition, it’s important to note that they are prohibited from providing you with any legal advice, nor can they represent you if a problem develops during the course of the filing process.
At Belsky & Horowitz, LLC, we recognize that considering filing bankruptcy can seem intimidating and embarrassing. However, it’s important to remember that the system exists to help people recover from significant debt. If you’re dealing with debt you can no longer control, bankruptcy might not be your only option to recover financially. When you consult with one of our Baltimore attorneys, we’ll review your situation and provide you with guidance on how best to proceed based on your unique circumstances. Contact us today for more information.