What You Should Know About How to File for Chapter 7 Bankruptcy in Maryland or Washington DC
Are you afraid to open your credit card statement because you are delinquent on several payments and the late fees are piling up? Are you in danger of having your paycheck garnished or is it being garnished right now? Do you cringe when the phone rings because you know it is a harassing creditor?
At the Law Firm of Kevin D. Judd, our Maryland and Washington DC Chapter 7 bankruptcy lawyer can provide you with workable options to stop creditor harassment and eliminate your debt. We can help you relieve yourself from overbearing debt and give you a fresh start.
Eliminate Your Debt and Get on the Path to Financial Freedom
Although new bankruptcy laws have made it more difficult to file for Chapter 7 bankruptcy, it is still possible for many people. Bankruptcy attorneys can evaluate your situation to see whether bankruptcy will help you and your family to eliminate your debt and stop garnishments.
Chapter 7 Bankruptcy Explained
When you file bankruptcy, you receive an “automatic stay” that prevents creditors from taking any further collection activity. You will then work with your bankruptcy attorney to differentiate between your dischargeable debts and your non-dischargeable debts. Although non-dischargeable debts cannot be eliminated, eliminating the dischargeable debt reduces your financial burden, allowing you to pay for the non-dischargeable debts.
- Dischargeable debts: Include credit cards, medical bills, and judgments.
- Non-dischargeable debts: Include student loans, taxes within the previous three years, alimony support payments, child support payments, and criminal restitution.
Is Chapter 7 Bankruptcy Right for Me?
Chapter 7 bankruptcies are the most common form of bankruptcy among consumers. The most common causes for consumer bankruptcy include:
- Large medical expenses or other unexpected expenses
- Over-extended credit
Partnerships, sole proprietorships and corporations also have Chapter 7 eligibility. However, this form of bankruptcy is less common amongst business entities because, following liquidation, the business must dissolve. Many businesses wishing simply to reorganize debt obligations while continuing operations often file for Chapter 11 bankruptcy instead.
While your level of debt may tempt you to file for bankruptcy, there are negative aspects to filing for bankruptcy, such as a decreased credit score and difficulty obtaining loans in the future, that you must consider when making the decision whether to claim bankruptcy. A Chapter 7 filing is often appropriate in circumstances where the debtor:
- Earns less than the median income for his or her geographical region
- Does not have a steady flow of income
- Has very little non-exempt assets
- Owes a large amount of debt that cannot feasibly be repaid within a reasonable period of time
For more information on alternatives to bankruptcy, see “Alternatives to Chapter 7 Bankruptcy.”