Chapter 7 Bankruptcy Lawyer in Baltimore

Life After Chapter 7 Bankruptcy

Even after successfully filing bankruptcy, a few debts may remain, depending on the situation. Chapter 7 bankruptcy can be a fresh start for some people, but it is not a get-out-of-jail-free card. There are very real consequences to filing Chapter 7 bankruptcy, and the debts that you are still responsible for differ on a case-by-case basis. In addition to potentially having some debts remain, your credit score will take a substantial hit. Depending on the situation, after filing for Chapter 7 bankruptcy, your credit score can drop anywhere between 100–200 points. The bankruptcy will also show on your credit report for the next 10 years. With a bankruptcy on your credit report, it is difficult to get a loan, to say the least — and if you do manage to get a loan, the interest rate is often very high.

You also need to consider other people when filing Chapter 7 bankruptcy. With Chapter 7 bankruptcy, your co-signers are completely unprotected. This means that even if you are no longer responsible for your debts, your co-signer still will be. Your co-signer will need to pay off any remaining debts of yours, even when you are no longer legally required to — unless they, too, are filing for bankruptcy. Take the time to make sure that you are not doing any financial harm to any co-signers by filing Chapter 7 bankruptcy, as they will be responsible for the debt you have accrued on the item they co-signed for — even when you no longer are.

Chapter 7 bankruptcy can offer a new beginning to those who need it most. However, it may not be the best fit for your situation. Consider collaborating with financial advisors post-bankruptcy to rebuild financial stability. Creating a new budget, prioritizing essential expenses, and responsibly engaging with secured credit accounts can significantly aid in recovering your credit score and ensuring long-term financial health. Additionally, educational financial seminars or workshops can provide valuable insights and strategies for effective financial management post-bankruptcy.

Who Qualifies for Chapter 7 Bankruptcy?

Not everyone meets the qualifications for Chapter 7 bankruptcy. 

If the following statements apply to your situation, please reach out to our team:

• Your debts are more than half your annual income
• It would take a minimum of five years to pay off your debt, even if you took extreme steps to do so
• Your debt has become a source of stress and has interfered with your personal life, including relationships or your ability to sleep
• You have little to no disposable income
• Your monthly income is below the average income in your state

In addition to these criteria, performing a means test can help determine your eligibility for Chapter 7. The means test evaluates your income, expenses, and family size against the median income in Maryland. This ensures that high-income earners do not take advantage of Chapter 7's debt discharge benefits. Understanding the nuances of this test with the help of a knowledgeable attorney ensures that you approach your bankruptcy filing correctly and confidently.

Who Is Chapter 7 Bankruptcy For?

Once you have decided that filing bankruptcy is the proper option for you and you have successfully filed, knowing what steps to take next can sometimes be challenging. If you are in the Baltimore area, we recommend consulting Sanchez Garrison & Associates LLC for help through your Chapter 7 bankruptcy process. Once you have successfully filed, all of your unsecured or non-exempt debts are essentially gone. This means that you avoid foreclosing on your properties, avoid your car being repossessed, and are left with no more debt.

After filing bankruptcy of this type, you must sell all of your possessions/properties that aren’t exempt to pay back your credit card debt, student loan debt, or whatever other types of debt you have acquired the best you can. You are allowed to keep things that are necessary for day-to-day life. Even though you have to sell most of your possessions, you are often left with little to no remaining debt. This is why Chapter 7 bankruptcy is known as liquidation bankruptcy. You are required to liquidate all of your assets, but you are left unburdened.

Financial counseling is an essential step immediately following Chapter 7 bankruptcy filing. These counseling sessions, which may be court-mandated, are designed to help individuals avoid future financial pitfalls and plan effectively for a stable financial future. By understanding how to manage their finances, set realistic budgets, and build savings, clients can cultivate a resilient financial foundation. This proactive approach helps ensure that the benefits of a fresh start under Chapter 7 bankruptcy are not short-lived but contribute to long-term financial wellness.

Types of debt that can be eliminated under Chapter 7 bankruptcy are:

• Medical bills
• Credit card debt
• Student loan debt
• Major tax debt
• Alimony and child support debts

There may be other debts that are covered under Chapter 7 bankruptcy. Consult your bankruptcy attorney with any questions on what debts are covered, what debts are secured or unsecured, and more. Understanding these details can help you make informed decisions about your financial strategy going forward, ensuring you take full advantage of the relief Chapter 7 offers.

What Are the Consequences Of Filing Chapter 7 Bankruptcy?

Once you recruit the help of a bankruptcy lawyer, what then? Chapter 7 bankruptcy is known as the “liquidations bankruptcy.” This means that if you successfully file, all of your unsecured/non-exempt debts are completely wiped out. In Layman’s terms, this means that your bankruptcy lawyer will help you avoid foreclosures and car repossession while helping you keep other things necessary for day-to-day life. However, you are required to sell all of your non-exempt property/items and use the proceeds to pay back as much as you can to your debtors and creditors.

You will have to sell things like:

• Valuable collections of cards, stamps, coins, etc.
• Family heirlooms
• A secondary vehicle
• A secondary home
• Recreational vehicles like RVs, ATVs, dirtbikes, etc.

This is why Chapter 7 bankruptcy is known as liquidation bankruptcy. It allows you to keep the essentials you need for daily life and sell all other non-exempt possessions to pay back the creditors and debtors. Your debts like credit card balances, medical expenses, and other debts can all be eliminated.

Anything you don’t need and any money you may have in the bank, stocks, bonds, or other investments must be used to pay creditors and lenders. Strategic planning and cooperation with an experienced legal team can help you navigate these requirements effectively, ensuring compliance with bankruptcy laws while securing your essential assets.

To learn more about the benefits of declaring bankruptcy and see what solution makes the most sense for you, reach out to the experienced Baltimore Chapter 7 bankruptcy lawyers at Sanchez Garrison & Associates, LLC by calling (410) 406-7372. We look forward to working with you.

FAQs About Chapter 7 Bankruptcy

What Is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?

Chapter 7 bankruptcy involves liquidating non-exempt assets to pay creditors and typically results in a discharge of most unsecured debts. In contrast, Chapter 13 bankruptcy restructures debt into a repayment plan over three to five years, which allows individuals to keep their assets while paying off debts over time. The choice between these types depends on individual financial situations, eligibility, and goals for debt relief. Consulting with an experienced bankruptcy attorney can help determine which option is best suited for your circumstances.

How Does Filing for Chapter 7 Bankruptcy Affect My Credit Score?

Filing for Chapter 7 bankruptcy will have an impact on your credit score, typically resulting in a drop of 100 to 200 points. However, while it remains on your credit report for up to ten years, the filing offers an opportunity to rebuild credit over time. Many individuals find that they can start improving their credit as soon as their bankruptcy discharge is completed by responsibly managing new credit accounts and maintaining timely payments.

Can I Keep My House and Car if I File for Chapter 7 Bankruptcy?

In many cases, individuals are able to keep their home and car when filing for Chapter 7 bankruptcy, especially if the equity in these assets is covered by the exemption laws in Maryland. It is important to assess the specific exemptions that apply to your property and consult a skilled attorney to protect these assets during the bankruptcy process.

How Long Does the Chapter 7 Bankruptcy Process Take?

The Chapter 7 bankruptcy process is typically faster than Chapter 13, generally taking four to six months from filing to discharge. This timeline can vary depending on the complexities of your individual case and court schedules. Working with an experienced attorney can ensure that you navigate the filing process efficiently and without unnecessary delays.

What Should I Expect from My Initial Consultation with a Bankruptcy Attorney?

At your initial consultation with a bankruptcy attorney, you can expect a thorough evaluation of your financial situation, a discussion of your debt relief options, and an explanation of the bankruptcy process. This meeting is an opportunity to ask questions about how bankruptcy will affect your assets, your credit, and your financial future, allowing you to make informed decisions with guidance from experienced legal professionals.

Contact Our Chapter 7 Bankruptcy Attorney in Baltimore Today

Filing for bankruptcy can be complex, and making mistakes in your filing could result in delays or a denial of your case. Our Baltimore Chapter 7 bankruptcy lawyers at Sanchez Garrison & Associates will assess your financial situation, decide if you qualify for Chapter 7, and help you navigate every step of the process with confidence. Together, we will explore your options and help you make the right decision for your financial well-being. Let us provide the legal support you need to move forward.

Learn more about how our Baltimore Chapter 7 bankruptcy lawyer can help by contacting us online or calling (410) 406-7372 today!