The sense of anxiety that comes with mounting debt burdens can be difficult to confront. For many Maryland residents who find themselves in this type of situation, it may seem like there are few options – or, that the options that are available aren’t any good.
Bankruptcy, for example, is an option that most people probably think of as a “last resort.” However, bankruptcy can be a useful tool for those who are looking for a real and oftentimes conclusive path toward dealing with debt.
Bankruptcy basics
So, what is bankruptcy all about? The basic concept of bankruptcy is to allow debtors to get a “fresh start” and honestly deal with the accumulated debt that is burdening their financial situation. To the extent that some assets may be sold off and creditors paid, at least partially, with the proceeds of those sales, that fresh start can be realized.
For most individuals and families, Chapter 7 bankruptcy is the first bankruptcy path to consider. This form of bankruptcy, commonly referred to as “liquidation” bankruptcy, is the option whereby assets are sold off and proceeds go to creditors.
Then, if there is any remaining debt, it is discharged – although certain types of debt may be excluded under the law. And, many types of assets are exempt from the liquidation process. Additionally, there are income thresholds involved in this type of bankruptcy.
In short, if a person doesn’t qualify for Chapter 7 bankruptcy, another form of bankruptcy might be an option. In other forms of bankruptcy, debt may be restructured and paid off over time as part of a comprehensive plan.
The reality is that Maryland residents do have options for addressing debt and getting relief. That is what bankruptcy is all about. If you have what feels like a spiraling debt situation, it may be beneficial to get more information about your bankruptcy options.