When a person or couple has reached the end of their financial rope, there are few other options available to them other than filing for bankruptcy. It can be a sobering and difficult time. However, even in this tumultuous time, there is light at the end of the tunnel, and that light can be provided by bankruptcy. There are, however, some practical things that need to be worked out when filing for bankruptcy is a serious consideration. One of the first things that need to be addressed is consulting with a Bankruptcy Law Attorney in Baltimore.
It’s important to consult with an attorney because there are many different types of bankruptcies that a person can file for. For issues that revolve around personal finances, the two main types of bankruptcy are chapter 7 and chapter 13.
This often takes people by surprise because many people aren’t aware that there are different types of bankruptcies available. Chapter 7 is a type of bankruptcy where the courts will discharge most or, in some cases, all of a person’s debt. However, to file for that type of bankruptcy, a person will need to fall into a particular income bracket, typically pursuant to the state’s median income for the amount of people living in the household. If a person falls under those income brackets, they’re eligible to file for chapter 7. If they exceed the median income, they would have to file for chapter 13
Chapter 13 is a court-ordered repayment plan that allows the filer to pay back either all or a portion of their debt to a court-ordered repayment plan. These repayment plans typically last for 3 to 5 years.
In any case, to determine eligibility, the courts will require a means test before the bankruptcy can proceed. Speaking with a bankruptcy law attorney in Baltimore will help a person understand this process and can give the individual or couple a good idea as to which bankruptcy they will qualify for.
There are many other questions that people have about bankruptcy, which is why it’s important to speak with an attorney.
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