When you are in a serious debt situation and a resolution looks unlikely, then filing for bankruptcy is the only available option. Make sure you have exhausted all possible options before you take this big step because the consequences of filing for bankruptcy can be far-reaching and can impact many aspects of your life for a long time to come.

Always make sure that you hire the services of a Maryland lawyer with expertise in bankruptcy law although it is not mandatory. You are allowed to file for bankruptcy on your own but it a pretty complex process and a small unintentional error can throw the whole thing out of gear, sucking you into a deeper mess.

Which Type of Bankruptcy Will Best Serve Your Needs

Once you have taken the final decision to go for bankruptcy, you will need to decide which type of bankruptcy is best suited for your financial situation. Chapter 7 bankruptcy Maryland is also known as liquidation bankruptcy. This type of bankruptcy discharges most of your unsecured debt including credit card debt, medical bills, and personal loans. Chapter 13 bankruptcy requires you to repay your creditors through a repayment plan drawn in consultation with all the affected parties.

So Should You File For Chapter 7 Or Chapter 13 Bankruptcy? 

You are eligible to file for Chapter 7 if your disposable income is less than the median of your state, or if you can pass the means test (Explained later in this blog). If you qualify, the Chapter 7 bankruptcy will discharge most types of unsecured debt. 

Your nonexempt property might be sold and the money will be used to repay your creditors. However, you are likely to retain most of your significant properties. It must be noted that this type of bankruptcy takes around three to four months to complete.

Key Conditions That Make Your Qualification For Chapter 7 Clear

• The sum total of your debts is more than half your annual income.
• Even if you put in your best efforts, it would take five years or more to clear off all your debts
• Your income is not a steady one
• Your monthly income is below the median level in your state

The means test is a process that you must submit to if you have decided to file for Chapter 7 bankruptcy. The test will examine your financial records in great detail. This includes:

• All your income and expenses
• All your secured and unsecured debts
• Specific credit purchases that are non-essential (luxury items for instance)

If your bankruptcy lawyer feels that you will fall short of fulfilling the qualifying conditions for Chapter 7 bankruptcy Maryland, then the next option is to try for Chapter 13 bankruptcy. In this type of bankruptcy, you can repay your creditors over a period of three to five years depending on your income. At the end of the bankruptcy, you will be discharged from most of your unsecured debts.

The Law Office of Rowena N. Nelson is your best option for finding highly experienced and qualified lawyers for filing Chapter 7 bankruptcy Maryland. You can call the law firm for a free consultation and know whether you qualify for Chapter 7 or Chapter 13 bankruptcy.