There are three main chapters of bankruptcy that bankruptcy lawyers in Germantown can assist you in preparing and filing for. Chapter 7 is for individuals that pass the Means Test and show that their income for the six months previous to the filing for bankruptcy is less than the median income of the state. Chapter 11 bankruptcy is typically employed by businesses that need to continue to operate their business while restructuring their debts and Chapter 13 is for individuals planning to repay their debts over the course of three to five years.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy filing causes the sale of your property and assets and the proceeds are turned over to the court appointed Trustee for distribution to your creditors. Individuals may only receive a discharge chapter 7 bankruptcy once every 8 years. It is possible to retain some of your personal items and assets under the statutory exemptions of the state of Maryland and the Federal Government. It is essential that you consult with bankruptcy lawyers in Germantown to determine your best course of action through a Chapter 7 bankruptcy.
Chapter 11 Bankruptcy
The Chapter 11 is most often chosen by businesses that desire to keep operating their business during the restructuring and repayment of outstanding debts. The Federal Bankruptcy Court decides whether a Trustee needs to be appointed or not. If the Court appoints a Trustee, the Trustee then takes control of the property owned by the business, and the business itself. If not, the Court and the Creditors must approve your repayment plan to proceed.
Chapter 13 Bankruptcy
Under a Chapter 13 bankruptcy, individuals typically can retain their property. However, you must be able to prove regular income and earn wages to support your repayment plan. The Court must approve your budget and repayment plan to proceed. A court appointed Trustee will be assigned to the case and will collect your monthly payments towards your debts and then divvy them out to the creditors. A Chapter 12 is a similar, however is only for family farmers and family fishermen.
In bankruptcy, regardless of chapter, all debts may not be discharged. Bankruptcy Courts, not state or other local jurisdictions hear all bankruptcies in the United States. Non-dischargeable debts include most student loans, most taxes, and debts that were incurred because of fraud and other criminal activity. Personal property, household items, vehicles, retirement accounts and real estate may be protected up to a certain figure depending on your situation. It is important that you speak with bankruptcy lawyers in Germantown to determine the debts that will be discharged and the property you will be allowed to retain.
Only debts that are incurred before the date you file for bankruptcy are dischargeable. Understand your rights and responsibilities as outlined in the U.S. Bankruptcy Law with the assistance of expert bankruptcy lawyers in Germantown. Contact an attorney today to start the process of getting your financial freedom back.