Maryland Bankruptcy Law and New Rules
Major changes swept through the Code in late 2005. These changes affect all Maryland residents who consider filing Chapter 7 and Chapter 13. The law for qualification for Chapter 7 bankruptcy in Maryland now includes a new test requirement based on disposable income. If a debtor earns more than the Maryland state median income, only Chapter 13 is available. Under previous editions of the Code, almost anyone could file Chapter 7. Additionally, qualification is further predicated upon proof of total debts and claims above a statutorily crated minimum threshold. These laws are designed specifically to severely limit access to Chapter in all but the most extreme circumstances.
But as with any law, legislators seldom close all loopholes in the first draft. Attacks upon the constitutionality of the new Maryland bankruptcy law are already underway, as well as conservatives claiming the law does not prevent enough Chapter 7 cases. Loopholes in the new Maryland law are now the centerpieces for disputes about the purpose of reform, and allegations target large credit card companies for receiving a disproportionately large advantage over other creditors. Eventually, these disputed legal issues will be settled, and expect all residents to need legal counsel to determine the availability of chapters.
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