Bankruptcy is a way for an entity – usually an individual, but it could also be a business or another legal entity – to orderly resolve a large amount of debt when there are multiple creditors that cannot all necessarily be paid out in the terms of their financial agreements. The Maryland federal bankruptcy process can be long and complicated, which is why it is beneficial to work with a capable bankruptcy lawyer. A knowledgeable attorney could devote the time and resources necessary to guide you through this process and advocate for you.
There are two types of bankruptcy: voluntary and involuntary bankruptcy. The majority of cases are voluntary. In cases involving voluntary bankruptcy, an individual or the company submits a petition to the federal bankruptcy court to commence bankruptcy proceedings. That petition is reviewed and either granted or not. If it is granted, then bankruptcy proceedings will commence.
Involuntary bankruptcy is uncommon. Creditors can essentially enforce their rights to the debt, and if that cannot be done voluntarily, sometimes a company can be forced in a bankruptcy in order to satisfy those obligations. In that case, similarly, it is referred to a federal bankruptcy court, which begins the bankruptcy process
Bankruptcy is a federal process. It is regulated by federal law that actually derives directly from the language in the Constitution. Technically, the U.S. Federal District Courts have jurisdiction over bankruptcy proceedings, and a bankruptcy can then be referred to a federal bankruptcy court but almost all district courts have essentially a standing order. There is a standing reference order that allows a person to petition directly to the federal bankruptcy court.
Due to the federal nature of Maryland federal bankruptcy process, a person cannot file for bankruptcy in the state courts. State law often plays an important role in bankruptcy proceedings due to the fact that many bankruptcy proceedings concern property and the delineation and allocation of property and other debts. Many of the specific determinations regarding property and other assets are governed by state law. However, bankruptcy itself is a federal process, governed by federal law, and proceeds in federal court.
Bankruptcy is not considered a crime. A criminal defense lawyer is for someone facing criminal charges and potentially facing criminal penalties including jail, fines, or other penalties because they have been charged with breaking a law. Bankruptcy is not a criminal act. It is authorized in the constitution and by law, so there is nothing illegal or criminal about the Maryland federal bankruptcy process. It can be and is usually a rather complicated, involved, and lengthy process to figure out all the entity’s debts and creditors, the priority of different creditors, which assets are going to be covered under the bankruptcy proceedings, and which are exempt.
The bankruptcy lawyer essentially guides, assists, and works with the entity through the Maryland federal bankruptcy process. They have the expertise, they know how to apply the laws, and they know the process to lawfully execute the bankruptcy proceedings, while also protecting your interests. There are certain assets that may be exempt from bankruptcy proceedings that you may be able to keep in the bank. The bankruptcy lawyer is going to know those laws and regulations and how to apply them to your benefit.