Filing Chapter 7 Bankruptcy in Maryland: A Step-by-Step Guide
Filing for bankruptcy is never an easy decision, but for many Maryland residents struggling with debt, Chapter 7 bankruptcy provides a path to a fresh start. This guide walks you through the process of filing Chapter 7 in Maryland, so you understand what to expect from beginning to end.
What Is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, often called "liquidation bankruptcy," allows individuals to wipe out most unsecured debts such as credit cards, medical bills, and personal loans. In exchange, a bankruptcy trustee may sell (or “liquidate”) certain assets to pay creditors. However, Maryland exemptions often allow filers to keep essential property like a car, household items, and retirement accounts.
Step 1: Determine Eligibility
Not everyone qualifies for Chapter 7. Maryland residents must pass the means test, which compares your income to the state median.
If your income is below the median for your household size, you automatically qualify.
If it’s above, a more detailed analysis of your expenses and debts is required.
The test ensures that Chapter 7 is reserved for people who truly cannot repay their debts.
Step 2: Complete Mandatory Credit Counseling
Before you can file, Maryland law (in line with federal bankruptcy rules) requires you to take a credit counseling course from an approved provider. This can be done online or by phone and usually takes about an hour. You’ll receive a certificate that must be included with your bankruptcy paperwork.
Step 3: Prepare Your Bankruptcy Petition
The petition is a detailed packet of forms filed with the U.S. Bankruptcy Court for the District of Maryland. You’ll need to gather:
A list of all your assets (property, bank accounts, vehicles, etc.)
All debts (creditors, balances, collection agencies)
Income and expense records (pay stubs, tax returns, bills)
Financial transactions from the past two years
Accuracy is critical—mistakes or omissions can delay your case or even result in dismissal.
Step 4: File With the Court
Once your paperwork is ready, you file it with the bankruptcy court serving your county. Maryland has two federal bankruptcy court divisions:
Baltimore Division (covering northern and central Maryland)
Greenbelt Division (covering southern Maryland and the Eastern Shore)
There is a filing fee, but if you cannot afford it, you can request to pay in installments or ask for a waiver.
When you file, an automatic stay immediately takes effect. This legally stops creditors from collecting, garnishing wages, or foreclosing on your home while the case proceeds.
Step 5: A Trustee Is Appointed
The court appoints a bankruptcy trustee to oversee your case. The trustee’s job is to review your paperwork, check for fraud, and determine whether any non-exempt property should be sold to repay creditors. In most Maryland Chapter 7 cases, people keep their property because it’s protected by exemptions.
Step 6: Attend the 341 Meeting of Creditors
About a month after filing, you must attend a short hearing called the 341 meeting of creditors. This is not held in court but in a meeting room. The trustee asks questions about your finances under oath. Creditors may attend, though in practice most do not.
As long as your paperwork is accurate and you answer truthfully, this meeting is usually straightforward.
Step 7: Complete a Financial Management Course
Before your debts can be discharged, you must take a debtor education course, also called a financial management course. This is separate from the pre-filing credit counseling. Once completed, you file your course certificate with the court.
Step 8: Discharge of Debts
If everything goes smoothly, the court issues a discharge order typically about 3–4 months after filing. This legally eliminates most unsecured debts. Some debts, such as student loans, recent taxes, alimony, and child support, cannot be discharged.
Maryland-Specific Considerations
Exemptions: Maryland law does not allow the use of federal exemptions, so residents must use state exemptions. These cover certain property like your home equity (up to a limit), retirement accounts, personal property, and some wages.
Court Locations: The Baltimore and Greenbelt divisions handle filings based on where you live.
Residency Requirement: To use Maryland exemptions, you must have lived in the state for at least 730 days before filing.
Final Thoughts
Filing Chapter 7 bankruptcy in Maryland is a serious step, but for many it provides relief from overwhelming debt and a chance to rebuild. Understanding the process—from the means test to the final discharge—can make the journey less intimidating and help you make informed choices.
Why Choose Atkinson Law?
At Atkinson Law, we’re committed to delivering honest advice, personalized service, and aggressive protection of your rights. We’ve helped countless Maryland residents escape debt and rebuild their financial lives.
Local expertise – We know Maryland bankruptcy laws inside and out.
Personal attention – We’ll guide you through every step of the process.
Affordable service – Clear, upfront pricing with flexible payment plans.
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 bankruptcy consultation. Let’s talk about how we can help you find relief and move forward.