Chapter 13 bankruptcy, commonly called reorganization bankruptcy, is a process that allows you to repay your creditors over time. It’s unlike Chapter 7, which dissolves your debt but requires you to give up many of your assets in the process, because you keep most (or even all) of your assets after creating a repayment plan.
After you file for Chapter 13 bankruptcy in Maryland, a series of events takes place. That’s why many people choose to turn to a Maryland attorney for Chapter 13 help—while it’s not an incredibly complex process, it’s a very involved one, and having an experienced Maryland and D.C. bankruptcy lawyer on your side can make the entire process easier.
First Things First: File Chapter 13 Bankruptcy
A Chapter 13 bankruptcy begins when you or your attorney files a petition with the Maryland Bankruptcy Court. You or your attorney will file a handful of documents at the same time, including:
- Schedules of assets and liabilities
- Schedule of current income and expenditures
- Schedule of executory contracts and current leases
- Statement of financial affairs
You’ll also have to put together:
- A list of creditors and how much you owe them
- The source, amount, and frequency of your income
- A list of all your property
- A detailed list of all your monthly living expenses
When those documents are turned in the court, the court opens your case.
The Automatic Stay After You File Chapter 13 Bankruptcy in Maryland
First—and for most people, this is a huge relief—the courts issue what’s called an automatic stay. The automatic stay stops your creditors from harassing you and asking you for money, which gives you some breathing room so you can create your plan and figure out how to repay the creditors you owe.
Repayment Plans After You File Chapter 13
A crucial step you must take after filing Chapter 13 in Maryland or elsewhere in the U.S. is to come up with a repayment plan. Your repayment plan must account for all your priority claims, which are those granted special status by the bankruptcy law (such as taxes, child support and alimony, and the costs of filing Chapter 13).
You also need to plan to repay secured debt and unsecured debt, although you don’t need to plan to repay all of your unsecured debt in full as long as you agree to pay your “disposable income” over an appropriate amount of time.
How Long Does it Take to Repay Creditors After You File Chapter 13?
Your repayment plan really depends on how much money you make and how much money you owe. If your average income over the past 6 months is higher than Maryland’s median income (or D.C. or Virginia’s, depending on where you live), you’ll have to propose a 5-year plan. If your income is lower than the median, you can propose a 3-year plan.
Do You Need to Talk to a Lawyer to File Chapter 13 Bankruptcy in Maryland?
If you’re like many people, you’ll be more comfortable with your bankruptcy case if you’re working with a skilled, knowledgeable Maryland Chapter 13 attorney.
We may be able to help you.
Call us at 301-933-2595 for a free Chapter 13 bankruptcy consultation. We’ll be happy to provide you with case-specific legal advice that you can use to make the best possible decision for your situation.
The sooner you call us, the sooner we can begin helping you on the path toward financial freedom.