How Does The Bankruptcy Process Work?

The last debtor’s prisons in America were closed more than 150 years ago, but their existence influenced the creation of modern bankruptcy laws. According to the U.S. Supreme Court, the purpose of bankruptcy is to give “the honest but unfortunate debtor a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.”

The goal of bankruptcy is to give debtors a fresh start.

Attorney John Hanrahan has focused on bankruptcy law for more than 35 years. If you are considering bankruptcy, he will take the time to explain your options and determine which form of bankruptcy is right for you. You will get personal attention, and we will keep you updated on the progress of your case.

Bankruptcy Court In Maryland

The Maryland bankruptcy court is a separate institution from civil and criminal courts, and its processes are different than other courts.

There are two bankruptcy courts located in Maryland; one is in Baltimore, and the other is in Greenbelt.

While a bankruptcy court judge will ultimately decide whether your debt will be discharged, you may not have to go to the actual court building. Administrative duties in bankruptcy cases are carried out by court-appointed trustees outside of the court.

Chapter 7 applicants are usually only required to go to court if there are objections to the court discharging specific debts for fraud, etc. Chapter 13 applicants usually appear in court only one time for the bankruptcy plan confirmation hearing.

The Bankruptcy Process In Action

The initial step in bankruptcy is to seek approval from the court to file a bankruptcy petition. Once filed, the court immediately issues an automatic stay. This is a protective order that prevents creditors from making collection calls, contacting you, or taking any adverse actions (garnishments, repossessions, foreclosure sales, lawsuits) against you. The bankruptcy court has sole authority to lift the automatic stay.

Approximately 45 days after the automatic stay is issued, we will attend what is known as a “meeting of creditors.” This is a short meeting, typically held in various locations throughout the state, where the court-appointed trustee and your creditors can ask questions about your assets, liabilities, income and expenditures.

After the meeting, the discharge of debt for a Chapter 7 filing usually takes six to eight weeks to process. For Chapter 13, any discharge of debt happens after your payment plan is completed and your debt discharge request affidavit is filed.

The complete process typically takes four to six months for Chapter 7 and three to five years  for Chapter 13. More complex bankruptcies take longer.

How Do I Pay For My Bankruptcy Filing?

If you are filing for Chapter 13 bankruptcy, attorney fees can be rolled into the payment plan. You can also pay upfront, if you prefer.

For Chapter 7 bankruptcy, there are ways to find money to pay the fees that we can help you with, but we do require a partial payment in order to begin. We often recommend that you stop paying credit card debt and put that money toward bankruptcy costs. Credit card debt is wiped out by Chapter 7 bankruptcy, so it does not make sense to continue making those payments. We understand our clients are having financial difficulties, and offer many flexible options  to pay your legal fees.

Contact Bankruptcy Attorney John C. Hanrahan For A Fresh Start

If you are considering bankruptcy, we can assess your situation and help determine which form of bankruptcy is right for you. Call the Law Offices Of John C. Hanrahan, LLC at 301-228-0787 or fill out our online contact form to set up an initial consultation.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.