Which Chapter of Bankruptcy Is Best for Me?
Facing financial hardship can be overwhelming—but filing for bankruptcy might be the right solution. At Chambers Law, we help clients throughout Maryland determine whether Chapter 7 or Chapter 13 bankruptcy is best for their unique situation. This post will walk you through the key differences and how Maryland laws affect your options.
What Is Chapter 7 Bankruptcy in Maryland?
Chapter 7 bankruptcy allows individuals to discharge most unsecured debts, including:
Credit card balances
Medical bills
Personal loans
To qualify, you must pass the means test, which compares your income to Maryland’s median income level. If you qualify, your case usually takes around 4–6 months.
What Property Can You Keep?
Maryland law protects essential assets through exemptions, such as:
- Up to $6,000 in cash or property through Maryland’s “wildcard” exemption
- Up to $5,000 in property through Maryland’s “personal property” exemption
- Up to $1,000 in household goods through Maryland’s “household goods” exemption
- Up to approximately $30,000 in home equity
Exception: if property is titled as tenants by the entirety and debts are individual
- Most household goods, retirement accounts, and vehicles
Is Chapter 7 Right for You?
Chapter 7 may be appropriate if you have:
- Below median household income
- Few assets
- Moderate to high unsecured debt
- No recent large asset transfers
For more information, read our full guide to Chapter 7 bankruptcy in Maryland.
What Is Chapter 13 Bankruptcy in Maryland?
Chapter 13 bankruptcy is a court-supervised repayment plan that lasts 3 to 5 years. It allows you to catch up on secured debts (like a mortgage or car loan) and may help protect property that you could lose in Chapter 7.
Chapter 13 is Ideal If You:
Are behind on mortgage or car payments
Have steady income but too much debt for Chapter 7
Own non-exempt property
Owe recent taxes or domestic support obligations
Under Chapter 13, you make monthly payments to the Chapter 13 trustee based on your income and allowed expenses. If your plan is successful, remaining unsecured debts are discharged at the end of the term.
To learn more, visit our detailed page on Chapter 13 bankruptcy in Maryland.
What About Chapter 11?
Chapter 11 is mainly used by businesses or individuals with debts exceeding Chapter 13 limits. It’s more complex and expensive, so it’s rarely the best option for consumers in Maryland. That said, high-asset individuals or business owners may benefit from its flexibility.
If your situation is more complex, contact Chambers Law for a case-specific analysis.
How to Choose the Right Bankruptcy Chapter in Maryland
Here’s a side-by-side comparison:
Situation | Recommended Chapter |
Low income, mostly unsecured debt | Chapter 7 |
Want fastest relief with no repayment | Chapter 7 |
High equity in home or assets | Chapter 13 |
Need structured repayment over time | Chapter 13 |
Still unsure? The best way to choose is with guidance from an experienced bankruptcy attorney in Annapolis, MD.
Speak with a Maryland Bankruptcy Lawyer Today
At Chambers Law, we offer personalized guidance and flat-fee pricing to help Marylanders find financial relief. Whether you’re exploring Chapter 7 for a fresh start or Chapter 13 to save your home, we’re here to guide you every step of the way. We proudly serve clients throughout the state of Maryland.
Schedule your free consultation today:
- Call: 410-650-4446
- Visit: https://chamberslawlawyers.com
- Or book online now
