Significant debt can happen to anyone, for many reasons. You may have lost your job, gone through a recent divorce or incurred significant medical debt. Filing for bankruptcy may seem like a step backward, but really, it is a way to move forward while protecting the things that matter.
Filing for bankruptcy offers you many potential benefits, some of which you can take advantage of right away.
1. Filing options
As an individual consumer, either Chapter 7 bankruptcy or Chapter 13 bankruptcy may be available to you. Each has its own eligibility requirements, but you typically qualify for either one or the other.
2. Property protections
While Chapter 7 sometimes requires liquidation of property, i.e., selling assets to pay off debts, Maryland law imposes some exemptions. If your property falls under one of these exemptions, you do not have to sell it. Exempt property may include your vehicle and at least some of your equity in your home. It can also include personal property and retirement accounts.
3. Harassment prevention
When you file for bankruptcy, an automatic stay goes into effect, temporarily stopping any collection activities against you, including foreclosure. By law, when the automatic stay is in force, creditors can no longer contact you directly.
4. Assessment time
While the automatic stay is temporary, it buys you some time to assess your financial situation and figure out what steps you can take to protect your assets and move forward.
Bankruptcy can be an intimidating prospect. However, taking the first step may put you on a better financial path.