Maryland bankruptcy helps consumers to prevent foreclosure. However, the chapter they choose dictates how long they are protected from this action. With chapter 13, the automatic stay remains in effect for up to five years. Chapter 7 offers a limited automatic stay that lasts up to six months only.
How to Stop Foreclosure
After a bankruptcy claim is filed, the consumer’s creditors are notified. With this notification, the automatic stay comes into effect. However, the consumer must complete the qualification process and attend a credit-counseling program. For chapter 13, they must have an income above $50,667. After they qualify and pay the fees required to start their claim, their bankruptcy lawyer in Baltimore files a motion to stop the foreclosure. The claimant must complete all requirements for the bankruptcy case to prevent a discharge of their claim.
The Next Step
After the creditors are notified, a meeting of the creditors is scheduled. The creditors must approve the inclusion of their debt into the claim. Any debts that aren’t allowed into the claim remain the responsibility of the consumer.
Following the Liquidation or Payment Plan Guidelines
Consumers who choose chapter 7 undergo liquidation. They are required to surrender the title or deed to assets or property included in the claim. The items are sold to produce funds to pay off the debts. The consumer cannot interfere with the sale or distribution as outlined in their case. A trustee oversees the entire process.
Consumers who choose chapter 13 submit payments according to the repayment plan. They cannot miss any payments. They cannot start new lines of credit or utilize disposable income for anything other than additional debts. If consumers in either chapter fail to follow these guidelines, the court may discharge their claim. This makes them responsible for all debts immediately.
Filing for bankruptcy stops the foreclosure process. However, the consumer must follow all rules of their case as directed by the court. If they fail, any discharged debts are restored. They will lose any fees they’ve utilized for these efforts, and they could lose their property. To discover how bankruptcy works, contact a bankruptcy lawyer in Baltimore today.
