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If you are a recently divorced single mother in Maryland struggling to handle bills and keep up with debt payments in spite of working a a full time job with decent pay, filing for bankruptcy may be an option to consider. There are three main chapters of the federal Bankruptcy Code, 7, 11 and 13. There is also a Chapter 12, which is essentially Chapter 13, but solely for family fishermen and family farmers.

Chapter 7 and Chapter 13 are the two options for consumer bankruptcy. Chapter 7 is simpler, quicker and generally the one more suited for aiding single parents with low or moderate income.

What is Chapter 7 bankruptcy?

The government assigns you a trustee. He or she takes control of your nonexempt property, liquidates it and uses the resulting proceeds to pay off your creditors. This method may clear your debt within months.

What is the bankruptcy means test?

If you make more than the average income for Maryland households the same size as your own, then you have to complete the Maryland means test calculation. Its results determine whether or not you are able to partially cover your debts through a Chapter 13 bankruptcy instead. If your household income is below the median, your debts are not mostly composed of consumer debt or you are a veteran and acquired them while on active duty or during a homeland defense activity, you do not have to fulfill this requirement.

What are Maryland bankruptcy exemptions?

In Maryland there are certain exemptions/property protected from seizing. This is only up to a certain value amount. These are separate from federal exemptions.

Bankruptcy has a bad reputation. However, filing for bankruptcy may help lighten your debt burden (some debts are not affected).