Looking to File Chapter 13 in Maryland?
Since 2005, many Marylanders have been forced into filing a Chapter 13 bankruptcy (instead of a Chapter 7) due to the poorly designed “Means Test,” which is meant to weed out people who are looking to abuse the bankruptcy system. On the other hand, many people who could and should file a Chapter 13 bankruptcy find that they can’t afford the necessary payments to maintain it.
Most of the people who consult with us want to avoid Chapter 13 because they think this “repayment plan” bankruptcy is not as good as a Chapter 7. But, that’s not accurate. For some people, a Chapter 13 Bankruptcy is the best option. Chapter 13 offers some great advantages over Chapter 7. A Chapter 13 allows you to “cram-down” some secured debts, which means that you can reduce the amount you owe to the actual value of the asset (picture your car that’s worth $10,000, but you owe $20,000). It also allows for the discharge of certain debts that Chapter 7 cannot. We call that the “super discharge.” Chapter 13 Bankruptcy even allows for, in some jurisdictions, the stripping of liens and discharge of junior mortgage liens — this means that in some cases we can get rid of your 2nd mortgage altogether!
So, if you are going to file Chapter 13 in Maryland, what are you getting yourself into? Well, that all depends. You’d think if you were voluntarily pursuing Chapter 13 instead of Chapter 7 you could skip the Means Test, but…..no. It is as important or more in this context, because it determines you time commitment. If you pass the Means Test, you can choose your time commitment. If you fail, you’re in a mandatory 5 year Chapter 13 Plan.
Chapter 13 Plans are the hardest to complete, because you have little room for error. This is where a Skilled Maryland Bankruptcy Attorney is essential. When properly designed and maintained, a Chapter 13 Bankruptcy can be very successful. To keep your Plan working for you, you must let us know of major changes in your life after your plan is confirmed (started). So, if you have a new child, a new job, or the unfortunate loss of a job, call us. All of these things could change the status of your Chapter 13 and could raise or lower your required plan payments. If you fall behind on Chapter 13 plan payments and don’t tell us, we will only know that your in trouble when we receive a Motion to Dismiss your plan from the Trustee. When this happens, we have limited time and options to help you. But, if you call us right away when something happens we can help with the strategic planning, modifications, or conversions necessary to deal with the changed circumstances.
How Does The Grafton Firm Handle Chapter 13 in Maryland?
At the Grafton Firm, you will always meet with an attorney who will review your circumstances with you to craft the best options for getting you out of debt. If that option is Chapter 13, we will start with preparing the basics of your Bankruptcy Petition and Schedules. From there, we will work with you to determine the best Plan to present to the Court. The Plan must be something that the Court will Confirm. Finally, once all documents are completed, we will sign and e-file your Bankruptcy.
This process may span 2-3 separate meetings. We will make that determination and schedule the entire process at our first meeting. You will need to gather all of the necessary documentation and complete some paperwork for the Attorneys to complete your Bankruptcy Schedules. Don’t worry…we’ll walk you through it and give you a checklist.
If you are struggling to pay your bills every month, a Chapter 13 bankruptcy may be the answer to allow you to get your head above water while still keeping your possessions. Contact the Grafton Firm today for a free consultation to learn more.