Personal and Business Bankruptcy: Chapter 7, Chapter 11, Chapter 13
Bankruptcy is handled by the federal courts. This means that you will not be filing in a local courthouse. You will have hearings in either Greenbelt or Baltimore. Occasionally, the hearings in western Maryland are held in Hagerstown, and the hearings for the Baltimore cases are in Salisbury. While it may seem daunting to have to attend hearings in a federal court, your bankruptcy attorney will be well versed in the procedures.
Generally, by the time you file for bankruptcy, your credit is not in good shape. The good thing about filing for bankruptcy is that you are prohibited from filing for a bankruptcy to discharge your debts for another 8 years, so some creditors will consider you a good risk. Your bankruptcy will be expunged from your records within 10 years, and most are removed from your credit history even sooner. You may even be able to qualify to purchase a home in about 2 years.
The inflexibility of hospitals and doctors in setting up reasonable payment plans is at the base of a number of bankruptcy filings. When filing for bankruptcy, you will not only be discharging your medical debt. Medical bills are unsecured debts, the same type of debt as credit cards and personal loans. This means that all these unsecured debts either will be discharged under a Chapter 7 bankruptcy or a manageable repayment plan will be set up under Chapter 13.
In general, all debts incurred during the span of your marriage are considered joint debts. For example, if both you and your spouse are co-signers on a credit card obtained during your marriage, you are jointly responsible for the debt incurred on that card during your marriage. If your spouse is filing for bankruptcy, the creditors may go after you for the amount owed. It is in your best interest to have an experienced attorney help you keep your financial situation separate from your spouse's.
In most situations, you will not lose your car due to filing for bankruptcy under Chapter 7 of the Bankruptcy Code. You have the right to keep certain of your assets as exempt property. There are both state and federal exemptions. Your attorney will be in the best position to determine what assets are exempt and how to present this information to the court.
Including your mortgage loan in your bankruptcy filing will temporarily stop any foreclosure proceedings by the lender. The automatic stay immediately goes into effect. This stops your lender from pursuing collection activities. The bank cannot continue any lawsuit and it cannot have the house sold at a county sheriff's sale. Depending on the type of bankruptcy you file, whether it is Chapter 7, 11 or 13, you will have a property exemption or a reorganization of your loan payments.
The bankruptcy court will determine what debts can be discharged under Chapter 7. Under Chapter 13, you will be working out a payment plan with your creditors. In either case, you will still be responsible for alimony and child support; certain taxes; student loans; and debts or loans that you obtained through giving false information. There are a growing number of individual Chapter 11 bankruptcy filings. These are more complex, but often offer a better result for some of our clients. We'll be happy to work with you to determine the correct option for you.