Bankruptcy Lawyer in Bethesda, Maryland

A good salary and a house with equity do not disqualify you from bankruptcy relief. They just change which chapter fits. Bethesda is in Montgomery County, so your case goes to the Greenbelt Division of the United States Bankruptcy Court. Many Bethesda clients earn too much to pass the Chapter 7 means test, which means Chapter 13 is the path. Chapter 13 still stops garnishment, still stops foreclosure, and still gives you a way out. Middleton Legal works with professionals who have real assets to protect. Call 240-896-3253 for a free consultation.

The Bethesda Problem: You Look Fine on Paper

This is the situation we see constantly in Bethesda. Strong household income. A home that has appreciated a lot. Retirement accounts that look healthy. And underneath all of it, six figures of credit card and personal loan debt, minimum payments that eat the whole paycheck, and no realistic way out.

On paper you are doing well. In reality you are one missed bonus away from a garnishment. Bankruptcy is built for exactly this. It is not only for people with nothing. It is a legal tool for people who have something to protect and need to restructure what they owe.

Where Bethesda Cases Are Filed

Bethesda is in Montgomery County. Montgomery County bankruptcy cases go to the Greenbelt Division, Federal Courthouse, 6500 Cherrywood Lane, Suite 300, Greenbelt, MD 20770. Phone (301) 344-8018. Petitions may be filed with the Clerk's Office in either the Baltimore or the Greenbelt Division, but Montgomery County cases are heard in Greenbelt.

Why Chapter 13 Is Often the Answer in Bethesda

Chapter 7 requires you to pass the means test, which compares your household income to the Maryland median for your household size. A lot of Bethesda households are over that line. That is not a dead end. It just points you to Chapter 13.

Chapter 13 gives you a three to five year plan. You pay what you can actually afford based on your real budget, not what the credit card companies demand. At the end, the remaining balance on qualifying unsecured debt is discharged. Chapter 13 is also the tool that protects home equity, because it lets you keep a valuable house and pay through the plan rather than risking a sale.

Protecting Home Equity, and Why Maryland Exemptions Are Tighter Than You Think

This is the question Bethesda homeowners actually care about, so let's be direct, and let's correct something you will read on other Maryland bankruptcy sites.

Maryland has opted out of the federal exemption system. You cannot choose the federal exemptions, no matter how much better they might look for your situation. You use Maryland exemptions, full stop. Maryland also has no standalone motor vehicle exemption, and its wildcard exemption, which covers up to $6,000 in cash or property of any kind, has to stretch across everything you point it at.

For a Bethesda homeowner, that math gets tight fast. If your equity exceeds what Maryland protects, Chapter 7 is usually the wrong choice, because a trustee could sell the house to reach that equity. Chapter 13 solves it. You keep the house and pay the value of the unprotected equity through your plan over time. We run your actual numbers before recommending a chapter. Nobody should guess about this.

Retirement Accounts

Qualified retirement accounts, like a 401(k) or an IRA, are generally well protected in bankruptcy under separate rules. One of the most painful things we see is a Bethesda client who drained a retirement account to pay credit cards, and then filed anyway. The retirement money was likely protected and the credit card debt was likely dischargeable. Talk to us before you cash anything out.

What It Costs

The court filing fee is $338 for Chapter 7 and $313 for Chapter 13. Attorney fees are separate, with payment plans available. In Chapter 13, most of the attorney fee is typically paid through the plan.

Frequently Asked Questions

Can I file bankruptcy in Bethesda if I have a high income?

Yes. A high income may mean you do not qualify for Chapter 7, but Chapter 13 is available regardless of income and still stops garnishment and foreclosure.

Can I choose the federal exemptions in Maryland?

No. Maryland has opted out of the federal exemption system, so Maryland filers must use the Maryland exemptions. Maryland also has no standalone motor vehicle exemption, and its wildcard exemption of up to $6,000 in cash or property of any kind must cover everything you apply it to.

Will I lose my Bethesda house if it has a lot of equity?

Not if the case is structured correctly. Chapter 13 lets you keep a home with equity beyond what Maryland exemptions protect by paying the unprotected value through your repayment plan instead of selling.

Is my 401(k) at risk in bankruptcy?

Qualified retirement accounts are generally protected. Do not cash out retirement to pay credit cards before speaking with an attorney.

Where do Bethesda residents file bankruptcy?

Bethesda is in Montgomery County, so cases go to the Greenbelt Division of the United States Bankruptcy Court, 6500 Cherrywood Lane, Suite 300, Greenbelt, MD 20770.

You Have Something to Protect. Let's Protect It.

Free consultation with Sheereen. Straight answers, no judgment. Call 240-896-3253. Middleton Legal, 6301 Ivy Ln, Ste 700, Greenbelt, MD 20770.

Related pages: Montgomery County, the Chapter 7 guide, the Chapter 13 guide, and all our Maryland locations.