If you plan to file for bankruptcy in Maryland, one of your options may be to file for Chapter 7 bankruptcy. Chapter 7 is also known as liquidation bankruptcy. In Chapter 7 proceedings, some or all of your personal assets may be liquidated.
If you have questions about Chapter 7 bankruptcy in Maryland, or if you want to initiate bankruptcy proceedings, you can get the professional help of a Maryland bankruptcy attorney.
Understanding What Happens During Chapter 7 Bankruptcy
Once you file for Chapter 7 bankruptcy, an automatic stay will go into effect. This means that your creditors will be prevented from taking collection actions against you. In other words, once you initiate Chapter 7 proceedings, your creditors will be prevented from foreclosing on your home, repossessing your car, and garnishing your wages or bank accounts.
When this automatic stay has gone into effect, the bankruptcy court will take control of your personal property and assets. Once this happens, you cannot sell your property or pay your debts without the courts' approval. The court will appoint a bankruptcy trustee to oversee your case.
After your Chapter 7 bankruptcy trustee is appointed, they will ensure your creditors are paid as much money as possible. They do this by looking at your past financial transactions and determining if there are any overlooked sources of capital. The trustee may even choose to liquidate some of your nonexempt assets to repay your debts.
The Creditor's Meeting During Your Maryland Bankruptcy
Within two weeks of filing Chapter 7 bankruptcy in Maryland, you will receive a notice for your meeting of creditors. At this meeting, you will be asked questions about your Maryland bankruptcy by your bankruptcy trustee, who steers the direction of the meeting. Your Maryland bankruptcy attorney can help you to prepare for the creditor's meeting and answer questions you have about what property is exempt from being seized and redistributed to your creditors.
Discharging Your Debts in a Maryland Bankruptcy
At the end of your Chapter 7 bankruptcy proceeding, most of your debts will be discharged by the court. Debts that may not be discharged include:
child support; most tax debts; student loans; alimony; and debts you have incurred by fraud or "malicious acts."
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