After you meet with the attorney and go through the means test, you will know if Chapter 7 or Chapter 13 is right for you. Then we will give you the financial packet, and you will have to bring us the required documents mentioned above. There are 8 steps in every bankruptcy in Maryland.
Step 1 – Credit Counseling:
You will have to take a credit counseling class, which can be done online or over the phone. We will provide you the list of approved court counselors and we can recommend a few that other clients have liked. We can walk you through this step.
Step 2 – Draft Petition:
Your Petition for Bankruptcy will be drafted which includes all of your information and is designed to show your current financial situation. A “Petition” is the name of the formal document you file with the Bankruptcy Court to start the bankruptcy process.
Step 3 – File the Petition:
Once the petition is drafted you will need come in to review it and sign it. The petition will then be electronically filed with the US Bankruptcy court in Maryland. Once the case is filed you get a case number, and the automatic stay goes into effect.
If you file a Chapter 13 bankruptcy, a repayment plan will be filed along with the Petition. Your attorney will create the plan, but in general, the plan will look at your net monthly income, subtract reasonable expenses (which are governed by the new bankruptcy statute) and see if there is income left over. If there is, that amount will go to pay your creditors.
Step 4 – Financial Management Training:
Before completing the bankruptcy process, you must take a financial management course. This is in addition to the consumer credit counseling class you already took. A Maryland bankruptcy attorney can help you set up this class as well.
Step 5 – Meeting of Creditors:
After you file your bankruptcy petition, the Trustee will hold a “meeting of creditors.” This is also sometimes called a “341 meeting” because that is the section of the code that governs it. Before the meeting you will need to provide the trustee with pay stubs, tax returns and bank statements. You will have to appear at the meeting and the Trustee will interview you. Your attorney will be present for this meeting. Your creditors are allowed to appear and ask questions, but they do not usually show up. For more details on what happens at a 341 meeting, click here.
The Trustee and the creditors will be trying to make sure you have disclosed all of your assets.The Trustee will ask you questions about your assets and debts, to confirm the information in your bankruptcy petition is true.
Step 6 – Waiting:
After the meeting, the Trustee and the creditors have 60 days to object to your right to a discharge. This does not usually happen, as long as your bankruptcy petition is accurate. Your attorney will handle it if it does happen. If there is a dispute over the plan the case may have to go to a confirmation hearing in front of a bankruptcy judge.
Step 7 – Confirmation Hearing:
For Chapter 13 cases only – If you file a Chapter 13 bankruptcy, a Confirmation Hearing will be held to determine if the repayment plan filed with your petition will be confirmed or denied. If your plan is confirmed, you will pay according to the plan and any debts left over when the plan is finally paid will be discharged. You get your discharge after you complete the plan payments. If the plan is denied, you will get a chance to amend the plan. If your plan cannot be confirmed, it will be dismissed and you will back to square one as if you never filed.
Step 8 – Discharge:
If you filed chapter 13 bankruptcy, you get your discharge when your plan payments are concluded. This could take 3-5 years, depending on how long your repayment plan lasts.
If you file Chapter 7 bankruptcy, the Bankruptcy Court will grant your discharge as long as nobody objects after your meeting of creditors, or if you get the Judge to approve it even if someone objects. This will usually happen 30 days after the creditor’s deadline to file objections, which is usually 4 months or so from the date you file the bankruptcy (as long as there are no assets for the Trustee to sell, which would obviously delay the proceedings).