June 18, 2013 0 Comments
Deciding whether or not to file for bankruptcy is a big decision, and the entire process can be confusing. Many people know nothing about what bankruptcy entails, what they have to do to prepare, and the consequences afterward. A Bankruptcy Attorney Prince Georges County MD is your best source for understanding your options under Maryland and federal law. Most attorneys will provide a free consultation so you can tell them your particular situation. Unless you are a business, you have two options actually in personal bankruptcy: filing for Chapter 7 or Chapter 13.
A Chapter 7 bankruptcy is the clean-slate version. In a Chapter 7, all of your debts that can legally be discharged will be gone. You’ll need to sit down with the attorney and do a means test to see if you qualify. Basically, this test determines your income and compares that to the amount of your debts. If you do not pass the means test, you may still file a Chapter 13. In Chapter 13, the means test has determined that your your income to debt ratio is not so bad that you can’t afford to at least pay back a portion of your debts. The trustee for the court will set you up on a payment plan that can last several years. During that time, you pay back a set percentage of each of your debts. Once you have completed the payments, your bankruptcy is considered finalized. The Bankruptcy Attorney Prince Georges County MD can better explain all the details to you.
There are some debts that cannot be discharged, as the Bankruptcy Attorney Prince Georges County MD will go over with you. For example tax debt is not nonchargeable. Neither are some student loan debts, such as loans taken directly from the federal government. Child support payments are also not able to be discharged. However, you can discharge all kinds of other credit card and other unsecured debt.
Bankruptcy is a serious mark on your credit rating, but it actually may look better in the long run than having unpaid debts following you around forever. Within a short time after your bankruptcy, you’ll be able to apply for a few carefully-selected forms of credit, such as a new car loan or a secured credit card, and making timely payments will then re-build your credit.