Maryland residents have a couple of options to help them get out of debt. The first method is to ask a creditor to forgive a debt or put a debtor on an alternate payment plan. However, there is no guarantee that a creditor will agree to do either of these things. There is also a chance that an individual will have to pay taxes on any portion of a debt that is forgiven.
The other option that a debtor may have is to file for Chapter 7 bankruptcy. Filing for bankruptcy allows someone to reduce or eliminate a debt balance, which can make it easier to save money. It is possible for an individual to start rebuilding his or her credit as soon as a case has been resolved. By having debts discharged through bankruptcy, a borrower is likely to have a lower debt-to-income ratio.
Therefore, credit card companies are more likely to approve requests for secured lines of credit. Bankruptcy filers may be able to restore their credit in about two years after their cases are discharged. Financial professionals encourage those who are curious about their debt relief options to speak with an attorney before filing for bankruptcy or seeking a debt settlement. Generally, a debt settlement may be easier to obtain with the help of legal counsel.
Filing for Chapter 7 bankruptcy may allow a person to eliminate unsecured debts without making payments to creditors. This may be true if a person’s assets are exempt from liquidation under state or federal law. A lawyer may explain the liquidation process and other details related to a Chapter 7 case. Those who qualify for a liquidation bankruptcy may have their debts discharged in a matter of weeks.