There are two main categories of bankruptcy available to individuals who deal with different types of debt situations. The typical Chapter 7 debtor has less assets and considerable debt associated with credit cards, store purchases, hospital bills and other dischargeable debts. Creditors are paid, if at all, from anything that the debtor currently owns that cannot be claimed as exempt from bankruptcy. Certain debts are not dischargeable in a Chapter 7 proceeding, but are dischargeable in a Chapter 13. If your bankruptcy is for a business or an entity other than an individual, you need to consult one of our Maryland business lawyers.

"Dischargeable" means that by filing for bankruptcy, you will not have to pay the debt if the court grants the discharge. The typical Chapter 13 debtor files because the debtor is not uptodate with rent, car loans, mortgage payments and/or other types of secured debt; because the debtor has substantial debts which cannot be discharged in a Chapter 7 bankruptcy; or has some assets which cannot be claimed as exempt.

One other reason for a Chapter 13 is to protect someone else who may be liable for your debts, such as a co-signer or spouse. In Chapter 13, creditors are paid out of the debtor's future income and a plan is proposed to pay the creditors. In order to quality for a Chapter 13 bankruptcy the debtor must be an individual with regular revenue. This revenue or income can consist of wages, commissions, rents, public benefits, social security, unemployment compensation, alimony, child support, pensions or other types of income which can be estimated. In a Chapter 13 bankruptcy, taxes are paid first. Next, landlords, mortgage holders and other secured creditors are paid in full over the 36-60 month period of the Chapter 13 plan if the debtor wants to keep the asset securing the debt.A good Maryland real estate lawyer knows how to settle this part of the case best. in the end, other unsecured creditors will receive whatever remains after the other secure debt creditors are paid. Unsecured creditors do not have to be paid in full. If the unsecured debts are greater than $250,000 or the secured debts are greater than $750,000, the debtor is not eligible to file a Chapter 13 proceeding. Generally, if all of your debts are dischargeable, a Chapter 7 would be advisable. However, if your financial situation is clouded by rent or mortgage arrears, tax debts, student loans or substantial assets, a Chapter 13 might be advisable.

in any case you need a skillful maryland bankruptcy lawyer to defend your rights in front of a judge and get you the best possible solution to settle your debts with the creditors.