In Maryland, bankruptcy is an effective option for settling debts without incurring more fees. Once the claims are started, the claimant is also protected against legal action by their creditors. A chapter 7 bankruptcy attorney in New Market helps claimants start a case and become debt-free.
Who Is Eligible for Chapter 7?
Any consumer or business owner who has enough assets to pay off significant debts are eligible for chapter 7. It is also the alternative option for claimants who aren’t eligible for chapter 13. Claimants must have an income that is greater than the household income for their area to qualify for chapter 13.
How Is the Process Completed?
The claimant files a motion for chapter 7, and the claim is reviewed by the court. All assets and debts are listed in their claim. The court must notify all creditors about the bankruptcy as they have the right to approve or deny their account for inclusion in the bankruptcy.
After the claim is approved, a trustee collects deeds and titles from the claimant. All assets are sold through auctions or direct sales. The proceeds are collected and distributed to the creditors as directed by the court. The claimant receives any exempted values for the debts out of the proceeds.
What Are the Advantages Over Chapter 13?
The major advantages of chapter 7 over chapter 13 are the shorter duration and that the claimant won’t lose assets purchased after the claim is filed. The claims last up to six months, and the claimant could become debt-free quicker than with chapter 13. The claimant won’t have to use their disposable income to pay off other debts during the case. The drawback is that the automatic stay only lasts a maximum of six months.
In Maryland, bankruptcy cases help consumers avoid serious financial risks such as lawsuits filed by creditors. The cases help the consumer settle their debts through liquidation or a new payment plan. With chapter 7, the claimant utilizes liquidation in which assets are sold to pay off debts. Claimants who need help can contact a chapter 7 bankruptcy attorney in New Market or click here for more information now.
