What Is Chapter 7 Bankruptcy In Maryland
A Chapter 7 bankruptcy in Maryland involves a liquidation of the debtors assets that are not protected in the exemption list to repay creditors. A debtor filing for a Chapter 7 bankruptcy in Maryland may retain exempt property. However, all other assets shall be gathered and sold by the trustee to pay debts to the extent that the debts can be paid. A Chapter 7 bankruptcy discharges most debts once a debtor goes through it. It allows the debtor to restart financially with the exempted assets. Courts try to ensure that Chapter 7 bankruptcy filings are not abusive. Therefore, if the debtors income is above the median in Maryland, the court would use a means test to determine if the bankruptcy filing should be upheld.
A Chapter 7 bankruptcy begins with the debtor filing a bankruptcy petition to the bankruptcy court serving the area the debtor resides or principally carries on business. In accordance with 11 U.S.C. § 521, the debtor would be required to file the following with the court.
- A list of the debtors current assets and liabilities
- A list of unexpired leases and executory contracts the debtor has agreed to
- A statement of the debtors financial affairs
- A schedule of the debtors current income and expenditures
There are additional filing requirements if the debtor is an individual with majorly consumer debts, such as:
What Is The Downside Of Filing For Bankruptcy In Maryland
A primary downside of filing for bankruptcy in Maryland is that the debtor may lose their assets. In some bankruptcy cases, all assets not under the exemption list shall be liquidated to pay off the creditors. In some others, the debtors power over their assets becomes limited. A repayment plan is decided upon and the debtor becomes unable to do anything with their assets outside of the repayment plan. There are some other downsides to filing for bankruptcy in Maryland besides loss of assets. These downsides include:
- The debtor may experience a fall in their credit score. This may affect their ability to secure loans in the future.
- The bankruptcy proceedings may remain on the debtors credit report for up to ten years. The credit report shall be available to financial institutions.
- Bankruptcy does not lead to a discharge of all debts. Some taxes, penalty payments, and some mortgages may still remain.
- The debtor who successfully files for bankruptcy shall be unable to file for another bankruptcy for some years.
However, there are still some reasons why a debtor should still consider filing for bankruptcy despite the downsides, such as:
Why File For Chapter 13 Bankruptcy In Maryland
A Chapter 13 bankruptcy in Maryland allows the debtor the opportunity to come up with a repayment plan for debts. New due dates can be decided upon for debts and the debts may even be reduced in some cases. Once a bankruptcy has been filed, the creditors become unable to enforce collection outside the repayment plan due to the automatic stay order issued by the court.
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Can A Bankruptcy Be Expunged In Maryland
Bankruptcy cases are public records, and the information is not subject to the state expungement process. Bankruptcy filings form part of the credit report of an involved party. These filings may remain active for up to 10 years, but federal records can receive expungement if there has been a case of impersonation, bankruptcy filing under duress, or a case that has been dismissed. Also, there is privacy protection for filing parties for the following information:
- The last four digits of the social security number
- The year of an individual’s birth
- Then last four digits of the financial account number
- The initials if there is an involved minor
The court can issue an order to place a filing under seal for a good cause. By doing so, the court limits or prohibits public access to the document.
Keeping Property When Filing Bankruptcy In Maryland
You won’t lose everything in bankruptcy. You’ll use your state bankruptcy exemption laws to protect your property. We list the significant exemptions below, but first, understanding the following will help you maximize what you’ll keep in your case.
- Exempt and nonexempt property. You can keep property protected by an exemption or “exempt” property. When a bankruptcy exemption doesn’t cover the property, you’ll either lose it in Chapter 7 or have to pay for it in the Chapter 13 repayment plan.
- Choosing state or federal exemptions. Unlike some other states, you can’t choose between the state exemption list and the list of federal bankruptcy exemptions. You must use Maryland’s exemptions. But you can use the federal nonbankruptcy exemptions.
- Doubling exemptions. Spouses filing together can double the exemption amount if both own the property unless noted otherwise.
- COVID-19 recovery rebate exemption. You might be able to protect stimulus payments, tax credits, and child credits in bankruptcy with the federal recovery rebate exemption.
- Retirement accounts all filers can protect. You can protect tax-exempt retirement accounts, including 401s, 403s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans and traditional and Roth IRAs to $1,512,350 per person .). .) Learn more about retirement accounts in bankruptcy.
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Chapter 1: Large Reorganization
Bankruptcy laws in Maryland state that large corporations or some individuals with extremely large debts can file for reorganization bankruptcy, as defined in Chapter 11 of the U.S. Bankruptcy Code. This is the most complex type of bankruptcy in which the trustee restructures the debts while allowing business to continue as usual. By doing so, organizations have a chance to survive as healthy businesses. However, the debtor will still need to pay creditors their outstanding debts through the companys future earnings. If the business emerges as unsuccessful, it will need to file for liquidation bankruptcy, selling its assets to pay off any outstanding balances.
Chapter 1: Repayment Plan
Chapter 13 bankruptcy, known as repayment plan bankruptcy or debt adjustment bankruptcy is the third type of case according to Maryland bankruptcy laws. This is a great alternative to Chapter 7 bankruptcy for any individuals or businesses wishing to keep their property. When filing for this type of case, a payment plan is set up detailing when and how you will pay off any outstanding debts. The plan, and therefore the debts, will last anywhere from three to five years. However, following the repayment plan, the debtor can keep all exempt and non-exempt property.
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Citing Resources In The Web Archive
Citations should indicate: Archived in the Library of Congress Web Archives at www.loc.gov. When citing a particular website include the archived website’s Citation ID . Researchers are advised to follow standard citation guidelines for websites, pages, and articles. Researchers are reminded that many of the materials in this web archive are copyrighted and that citations must credit the authors/creators and publishers of the works. For guidance about compiling full citations consult Citing Primary Sources.
What Is The Difference Between Chapter 7 And Chapter 13 Bankruptcy In Maryland
The primary difference between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy is that while a Chapter 7 bankruptcy involves liquidation, a Chapter 13 bankruptcy only involves a repayment plan. In a Chapter 7 bankruptcy, the debtors nonexempt assets are liquidated to pay creditors. A Chapter 13 bankruptcy involves a repayment plan to determine how creditors may be paid within three to five years. Also, a Chapter 7 bankruptcy may be filed for regardless of the amount of debt. There is a limit to the amount of secured and unsecured debt a Chapter 13 bankruptcy filer can have. A Chapter 7 bankruptcy is open to individuals, couples, partnerships, and corporations. A Chapter 13 bankruptcy is only open to individuals and couples.
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What Is Bankruptcy Law In Maryland
Bankruptcy laws in Maryland define the legal process that reduces, restructures, or eliminates overburdening and unpayable debts. According to the laws, a person, two spouses, or an organization struggling with their financial repayments can declare bankruptcy and go to U.S. federal court. The judge and an assigned court trustee will look over the assets and debts to find the best course of action for all parties involved. In most cases, the court will dissolve the debtors assets to pay the creditor and dismiss any remaining debts. In other cases, detailed repayment plans are agreed upon, specifying when to make payments over the next three to five years.
Series Title List Maryland
U.S. District Court for the District of Maryland. 9/24/1789-3/21/1892?
Series: Bankruptcy Act of 1800 Case Files, 1800-1803, Textual National Archives Identifier: 587348
Series: Bankruptcy Act of 1841 Case Files, 1842-1843, Textual National Archives Identifier: 651921
Series: Bankruptcy Act of 1867 Case Files, 1867-1878, Textual National Archives Identifier: 562746
U.S. District Court for the District of Maryland. ca. 1952-10/1994
Series: Bankruptcy Act of 1898 Case Files, 1898-1961, Textual National Archives Identifier: 563746
U.S. District Court for the District of Maryland. Baltimore Term. 3/21/1892-ca. 1952
Series: Bankruptcy Act of 1898 Case Files Transmitted to the Court by Referees of Bankruptcy, 1926-1939, Textual National Archives Identifier: 3021180
U.S. District Court for the District of Maryland. Cumberland Term. 3/21/1892-ca. 1952
Series: Correspondence Relating to Bankruptcy Cases, 1933-1935, Textual National Archives Identifier: 3333912
Series: Bankruptcy Act of 1898 Case Files, 1907-1951, Textual National Archives Identifier: 563747
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What Is The Purpose Of Bankruptcy Law
The primary purpose of bankruptcy law in Maryland is to define the legal process of debt collection. It principally helps the debtor, whether an individual or a corporation, by acting as a legal structure to settle debts. However, creditors also benefit from these laws. As such, they help to serve three main objectives:
1) To help creditors and debt collectors deal with debtors that cant pay their outstanding debts, offering them help in collecting the outstanding balance through other means. For example, through the sale of assets or a detailed repayment plan.
2) To help individuals that are burdened with debts gain access to a fresh start in life through discharge of their debts and relief of the legal obligation of repayment. It provides them with freedom from creditors chasing them and ensures the U.S. court handles the loan repayments fairly.
3) To offer corporations and firms the chance to overcome their financial distress via reorganizing their debts rather than being forced into liquidating their assets. This benefits businesses in debt while often giving creditors better returns than they would receive from the company going into liquidation.
Is A Court Appearance Mandatory
Just because you file for bankruptcy, doesnt mean you have to appear in court. In fact, most bankruptcy cases proceed without court appearances. Even complex credit problems can be resolved without court dates. Maryland bankruptcy court even has a provision for filing electronically. Learn more about whether or not you have to appear in bankruptcy court here. You can also refer to our in-depth guide to filing for bankruptcy in Maryland Bankruptcy courthouses also function as offices where you can obtain and submit forms.
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Filing For Bankruptcy In Maryland
You can file a petition for bankruptcy with the local U.S. Bankruptcy Court, District of Maryland. Depending on where you live , you may file in Greenbelt or Baltimore. Electronic Filing is also available. You must show:
- you live in Maryland or
- you had a business or most of your assets in Maryland.
If you cannot show you live or had a business/assets in Maryland for the last 180 days, you can show you were in Maryland more than any other judicial district over the last 180 days.
If you are filing for a business bankruptcy, you can also file wherever a partner or affiliate of your business has already filed for bankruptcy. 28 U.S.C. § 1408
What Is Chapter 11 Bankruptcy In Maryland
A Chapter 11 bankruptcy in Maryland allows a debtor to remain in possession of assets, continue to operate its business, and potentially borrow more money with the courts permission. A debtor that successfully files a Chapter 11 bankruptcy has the powers and duties of a trustee in relation to the assets.
A Chapter 11 bankruptcy starts with the debtor petitioning the bankruptcy court serving the area the debtor resides, is domiciled, or carries on business principally. Chapter 11 petitions may be voluntary or involuntary. A voluntary petition is usually filed by the debtor pursuant to 11 U.S.C. §§ 301. An involuntary petition is filed against the debtor by the creditors if they satisfy certain conditions pursuant to 11 U.S.C. §§ 303. A voluntary petition should be in accordance with Form B 101 of the Official Forms prescribed by the Judicial Conference of the United States. The debtor would also file the following with the court.
- A list of assets and liabilities for the debtor
- A financial statement of affairs
- The debtors current income and expenditures
- A list of executory contracts and unexpired leases the debtor is bound by
If the debtor is an individual or couple rather than a business, the debtor would also be required to file:
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Where Do I File For Bankruptcy In Maryland
Anyone facing a personal debt crisis might consider filing for bankruptcy. In many cases, this is the best legal option to get back on track financially. Maryland bankruptcy court is actually a division of the United States Bankruptcy Court. There are 94 federal judicial districts in total, including the district of Maryland.
What Are Maryland Bankruptcy Exemptions
Maryland bankruptcy exemptions are the property that the debtor may keep after filing for a Chapter 7 bankruptcy. In Maryland, the debtor is required to use only the exemptions in the state. provides for such exemptions. They include:
The value of the property used to determine whether or not it is exempt is the fair market value on the date the debtor files for bankruptcy and not the original purchase price. Also, even though the debtor cannot rely on federal bankruptcy exemptions in Maryland, they can rely on federal nonbankruptcy exemptions.
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Are Bankruptcy Records Public Information
Bankruptcy records are, for the most part, public records. At the point of filing, records are categorized into regular and Highly Sensitive Documents . Separate from records that are under a seal, sensitive documents bear information that pertains to one of the following:
- Foreign sovereign interests
- Investigation of public service
- Interests that border on the reputation of the federation.
HSDs are filed separately and restricted to paper formats only. In other words, they are not available in electronic form. It limits the risk of unguarded dissemination. Also, they do not belong under sealable documents.
Record seekers looking for an alternative to government sources may obtain bankruptcy records from third-party websites. These non-governmental websites often come with tools that help simplify the search for single or multiple records. However, record availability on third-party sites tends to vary because theyre independent of government sources. To obtain bankruptcy case information using third-party sites, record seekers may need to provide:
- A complete name of the debtor involved in the record
- A bankruptcy case number
Electronic Filing Of Claims
- Electronic Filing
Effective February 11, 2013, claims in all cases, in all chapters can be filed electronically using CM/ECF or through the Courts website without a login. The Court strongly encourages the e-filing of claims. The name and complete address of the creditor must appear on the claim form. If an attorney is filing the claim on behalf of a creditor, the attorney should also enter his/her name and address. The name and title, if any, of the person authorized to file the claim is required on the claim form. Penalty for filing fraudulent claim: Fine of up to $500,000 or imprisonment for up to 5 years, or both. 11 U.S.C. §§ 152 and 3571.
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Take A Debtor Education Course
Just as the law requires everyone to take a credit counseling course before they can file bankruptcy, the law also requires everyone to complete a debtor education course before they can get a bankruptcy discharge. This second course, which is sometimes called a financial management course, covers smart financial tactics that will help you make the most of your fresh start after bankruptcy.
Like the credit counseling course, you must take the course from a state-approved provider. Most providers offer debtor education online, by telephone, or both. When you finish the course, the provider will send you a certificate of completion. Some providers will also file your certificate for you in bankruptcy court. If your provider doesnât file your certificate on your behalf, youâll need to download and complete Form 423, then file it with the court.
You can take the debtor education course any time after filing your case, but no later than 60 days after your 341 meeting. If you donât file your Form 423 within 60 days after your 341 meeting, the court can close your case without a discharge â meaning you still owe your debts.
Print Your Bankruptcy Forms
When youâre finished filling out all the necessary forms, youâll need to print them out for filing. Keep this checklist on hand to make sure you have every form you need in the correct order. Print your forms using black ink on regular, letter-size white paper. There will be a lot of pages to print, but donât use double-sided printing. Forms printed on both sides of the paper canât be easily scanned into the bankruptcy courtâs electronic system.
Sign your printed forms in each place a signature is required, using blue or black ink. The Maryland bankruptcy court urges debtors to print out one original and one copy of each form. The court clerk will file the originals and return the copies to you, stamped with your bankruptcy case number and filing date.
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