Filing Chapter 13 Bankruptcy in Maryland: What You Need to Know
Let’s be honest—just saying the word “bankruptcy” can feel overwhelming. If you’re living in Maryland and struggling to keep up with debt, you may have heard of Chapter 13 bankruptcy. It’s not a magic wand that makes debt disappear overnight, but it can give you the breathing room you need to get back on track—without losing your home or car.
So, what exactly is Chapter 13, and how do you file in Maryland? Let’s break it down step by step—plus some real-world tips for making it through the process.
What Chapter 13 Really Means
Think of Chapter 13 as a debt reorganization plan. Instead of wiping everything clean immediately (like Chapter 7 might), you work out a repayment plan over three to five years. The best part? You usually get to keep your house, your car, and other important stuff while catching up on overdue payments.
In short:
It can stop foreclosure.
It can pause repossession of your car.
It bundles your debt into one manageable plan.
It gives you time to breathe and rebuild.
Step 1: Gather Your Financial Picture
Before you file, you’ll need to know exactly where you stand financially. That means writing down:
What you owe (credit cards, mortgage, car loan, taxes, etc.).
What you own (house, car, retirement accounts, personal property).
How much money you make each month.
How much you spend on essentials (rent, food, gas, utilities).
Tip: Think of this as creating a “financial inventory.” The more organized you are now, the smoother the process will be later.
Step 2: Take a Credit Counseling Class
Don’t worry—it’s not as scary as it sounds. Federal law says you have to take a short credit counseling course (usually online) before filing. It’s meant to show you your options and prepare you for the bankruptcy process.
Step 3: Filing Your Case in Maryland
You’ll submit your paperwork with the U.S. Bankruptcy Court for the District of Maryland (Baltimore or Greenbelt division depending on your county).
When you file, the automatic stay goes into effect. Think of it as a giant pause button—creditors have to stop foreclosure, repossessions, wage garnishments, and those stressful collection calls.
Step 4: Creating Your Repayment Plan
This is the heart of Chapter 13. You’ll propose a plan to pay off debt over 3–5 years. Typically:
Priority debts (taxes, child support) get paid in full.
Secured debts (like your mortgage) can be caught up.
Unsecured debts (like credit cards) may only get partial repayment.
Tip: Be realistic when building your plan. Don’t underestimate your living expenses—if your budget is too tight, it’ll be harder to keep up.
Step 5: The Meeting of Creditors
About a month later, you’ll attend a 341 meeting with your bankruptcy trustee. It’s usually quick, and most creditors don’t even show up.
Step 6: Court Approval
The judge reviews your plan at a confirmation hearing. Once approved, you’ll start making payments to the trustee, who distributes them to your creditors.
Step 7: Making Payments
This is where the rubber meets the road. For 3–5 years, you’ll make regular payments. It’s not always easy, but every payment brings you closer to a fresh start.
Budgeting Tip:
Treat your Chapter 13 payment like your top priority bill. Pay it before anything else.
Build a small emergency fund (even $25 a month adds up) so life’s surprises don’t knock you off track.
Cut non-essentials temporarily—streaming services, dining out, etc.—but don’t cut everything. Leave room for small joys so the plan feels sustainable.
Step 8: The Finish Line—Debt Discharge
If you stick to the plan, the court wipes out remaining eligible debts at the end. That usually means credit cards, medical bills, and other unsecured debts are gone for good.
The Emotional Side of Chapter 13
Filing bankruptcy isn’t just about numbers—it’s emotional too. Many people feel guilt, shame, or fear at first. That’s normal. Remember: bankruptcy laws exist to give people a second chance.
Emotional Tips:
Don’t think of Chapter 13 as “failure.” Think of it as a reset button.
Be honest with close family so they understand your financial changes.
Celebrate small wins (like finishing your first year of payments).
Common Mistakes to Avoid
Falling behind on plan payments. If you miss payments, your case could be dismissed. Set reminders and automate payments if possible.
Taking on new debt. You’ll usually need court approval, so don’t open new credit cards or loans without asking first.
Not filing taxes. The trustee will require up-to-date tax returns. Stay on top of this each year.
Forgetting lifestyle balance. Cutting every single “fun” expense makes plans harder to stick to—build in small rewards to stay motivated.
A Maryland-Specific Note
Maryland follows federal bankruptcy exemptions but has its own protections too—so you may be able to protect equity in your home, retirement accounts, and some personal property.
The filing fee is around $313, but you can sometimes pay in installments.
Final Thoughts
Filing Chapter 13 bankruptcy in Maryland is no small step, but it can be the lifeline that helps you stop foreclosure, catch up on debt, and finally breathe again. It’s a commitment—but with the right mindset, smart budgeting, and some emotional resilience, you can come out the other side with a fresh start.
Remember: you’re not alone, and bankruptcy is not the end of your financial story—it’s the beginning of your comeback.
Take the First Step Today
You don’t have to face financial hardship alone. Bankruptcy may feel like the end, but with the right legal help, it can be the beginning of a brighter financial future.
Call Atkinson Law at (410) 882-9595 or contact us online to schedule your free 30 minute consultation. Let’s talk about how we can help you find relief and move forward.