Bankruptcy can be a solution for some who struggle with overwhelming debt. In Maryland, you can file for bankruptcy within a bankruptcy court in the judicial districts. You may not file a bankruptcy petition in state court.
Bankruptcy is intended to help individuals and business owners get a fresh start when they lose control of their finances. People may liquidate their assets through Chapter 7 bankruptcy or opt for a repayment plan through Chapter 13 or other forms of bankruptcy.
The benefit of bankruptcy is that it doesn't require anyone to start over from scratch. There are many things that are exempt from liquidation, for instance, if you choose Chapter 7 bankruptcy. On top of this, filing for bankruptcy will immediately stop collections along with collections calls. This gives many people the break they need to reduce their stress and approach the bankruptcy with a fresh mind.
In many cases, unsecured debts, e.g., credit cards, can be fully dismissed in bankruptcy. After the initial liquidation of any assets the person has, the companies receive a portion of the profits. Then, any remaining debts are forgiven.
Not all debts can be forgiven. Responsibilities like student loan debts, taxes and child support obligations and arrearages are all types of debts that are non-dischargable during bankruptcy.
No bankruptcy comes without adverse consequences, like negative impacts on your credit score and making it harder to obtain credit or a mortgage in the near future. However, in the long-term, it can be a helpful tool for those who are struggling with their finances and need help.