Chapter 13 of bankruptcy is similar to Chapter 11, which is for businesses. In both chapters, you submit a restructured payment plan that protects your assets and requests discharging of a few debts. Both chapters are different from Chapter 7, which is more extreme, as it liquidates your assets, except those that are under special protection.


People who can show they have enough income to pay debts qualify for Chapter 13. You must disclose your income sources honestly.

It is smart to hire a reputable chapter 13 bankruptcy lawyer in Maryland. He/she will guide you in each step of filing. For example, you must submit your income information documents to the court within two weeks of filing a bankruptcy petition.

Your lawyer knows what and when to do and will guide you accordingly.

Moreover, you must submit proof of filing federal and state tax returns for the last four years. The absence of this proof can delay your case and even dismiss it.

How the bankruptcy court works?

When you submit your income, debts, and tax information, the bankruptcy court reviews the information and schedules a meeting with your creditors.

Then, the court schedules a hearing that reveals whether your restructured payment plan is acceptable.

Once all your repayments are done, your case is discharged. This usually takes 3-5 years.

This is enough time apparently to take hold of your financial life.

One of the best things about this chapter is that you get to keep the house. A major relief for many. However, you must live under trustee’s supervision. The trustee is appointed by the court to ensure you have an even distribution of your payments.

About debt elimination

Your personal bankruptcy attorney in Maryland will inform you about debts that get wiped off under Chapter 13 and those that remain.

Debts that remain are:
• Alimony
• Child support
• Unpaid taxes
• Student loans

Good thing, bad thing

The good thing is: filing for bankruptcy helps to wipe off many debts.

The bad thing is: it becomes tougher for a bankrupt person to borrow money later in life, as bankruptcy stays in your record for several years.

Suspension of foreclosure proceedings

When you file for Chapter 13, it suspends payment of debts and current foreclosure proceedings. This buys you time, although it does not remove the debt. Yet, the reorganized plan under the chapter lets you have enough money left in your income to make regular mortgage payments. This saves your house.

A fresh start

Your Chapter 13 bankruptcy lawyer in Maryland sits with you and charts out a fresh plan for repaying the debts, based on your income from various sources.

Once your plan gets approved in the court, it is your responsibility to keep up with the plan. You cannot be lax in this regard. If you fail to make payments as per the new plan, your case goes to court. You might need to sell your property to repay debts.

This is an extreme situation and lawyers advise against behaving in a manner that arises this situation. Be responsible and serious about your new payment plan.

You cannot have the excuse that you cannot pay because the new plan is prepared based on your current financial position.

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