What types of bankruptcy are available in Maine?

If you are considering declaring bankruptcy and you live within the state of Maine, it is important to understand the different options available to you. There are actual several different types of bankruptcy available, but only two really apply to individuals. The third type, chapter 11, is a restructuring bankruptcy for businesses and is not generally filed by an individual except in very rare instances.

So, what are the differences between the two main types of bankruptcy that are available in Maine and which one should you file?

• Chapter 13 bankruptcy is available to almost all debtors in Maine, as there are no income restrictions. As long as you are not disqualified on the basis of having filed too recently or for some other specific reason, like a bankruptcy that was dismissed due to fraud, you should be able to file a chapter 13 to help you take care of your debt.  If you file a chapter 13 bankruptcy, you will create a plan wherein you make monthly payments based on your income. The payments will be distributed to your creditors by a trustee and the repayment plan will go on for between 3 and 5 years. There is no requirement that you turn over assets in a chapter 13
• Chapter 7, on the other hand, is available only to those who qualify. To qualify, you must show one of two things: that your income is below the median in Maine or that a means test shows you don't have sufficient income to pay anything towards your debts. If you file chapter 7, there are both advantages and disadvantages: the advantage is your debt is wiped clean or discharged at the end. The disadvantage is you have to have many of your assets sold in order to make some money to pay back your creditors. 

To get help deciding which chapter is the best option for you based on your income and assets, you should contact a bankruptcy attorney in Maine.