Written by Attorney Tina Tran.
Updated August 17, 2020
Most people don’t expect to have to file bankruptcy, so they know very little about how it works and never realize how many people and businesses get relief from filing bankruptcy. For example, Sure Winner Foods, a local Saco frozen food distributor, even filed to restructure its debts in a Chapter 11 bankruptcy case. Most people looking for debt relief end up filing Chapter 7 bankruptcy in Portland, which wipes out all dischargeable debts like credit cards, payday loans, and medical bills. There is also Chapter 13 bankruptcy if you need help catching up on missed car or house payments. But, keep in mind, Chapter 13 requires a regular monthly income that is greater than your general living expenses. When deciding whether to file a Portland bankruptcy, it’s helpful to keep two things in mind: The amount of debt you could walk away from and whether you own anything that you don’t want to lose under any circumstances.
Most property is protected from being taken away and sold to pay your creditors by the exemption laws. These laws protect your assets from being sold for the sole purpose of paying your debts. Nationwide, only 4 % of all Chapter 7 bankruptcy cases result in the distribution of any money from the sale of the debtor’s property because most “regular stuff” is protected by exemptions.
The process of filing bankruptcy in Portland involves collecting documents and information, filling out forms and submitting them to the Court, taking a couple of online classes and going to your creditors’ meeting. Someone with a typical Chapter 7 bankruptcy in Portland won’t ever even have to see a judge. Instead, the only person they have contact with is the Trustee assigned to their case.
The Trustee’s job is to verify you were truthful in your bankruptcy forms and deserve to have a discharge entered in your Portland bankruptcy case. The Trustee also sells any non-exempt (unprotected) property you have to pay your creditors. You will meet with the Trustee about a month after filing bankruptcy in Portland and another 60 days or so later the Court will grant you a discharge. The discharge is the Court’s order that makes the temporary protection you received as soon as your Chapter 7 bankruptcy in Portland was filed, permanent. This means that no one can ever ask you to pay them for the discharged debt ever again. Some debts cannot be discharged. If you have a wide variety of debts like back taxes, student loans, child support and the like, it may be wise to speak to a bankruptcy lawyer. While helpful guides like this on Portland, Maine debt relief options give you a great overview of the process, if your case is more complicated, only a lawyer or legal aid can help you ensure you apply for and receive the maximum protections and advantages allowed by the Bankruptcy Code.
Portland Bankruptcy Lawyers - Estimated Cost
Every bankruptcy case is different, and some can be completed without the help of a lawyer. In some cases, having a lawyer is more beneficial than you realize at first, despite the cost of a bankruptcy lawyer. If your debts are not simply unsecured debts like credit cards, medical bills, or payday loans or if someone has sued you, you may want to contact a lawyer to see what they think of your Portland bankruptcy case before deciding what to do.
How to File Bankruptcy in Portland, Maine for Free
If you don’t have a lawyer, you may be wondering how to file bankruptcy in Portland, ideally for free, right? The following sections will give you a hands-on, step-by-step overview of how to file bankruptcy in Portland.
Collect Your Portland Bankruptcy Documents
To prepare for your Maine bankruptcy case, you should start by collecting the documents you will need to make sure you fill everything out correctly before submitting it to the Court. Some of the documents you use to fill out your bankruptcy forms also have to be submitted to the Trustee assigned to your Chapter 7 bankruptcy in Portland. The Trustees typically ask for your tax returns for the last two years, recent paycheck stubs from your employer, and sometimes they also request documents like bank account statements and policy documents for your life insurance policy, if you have one. Since the bankruptcy forms you submit to the Court have to match the information on these documents, it’s both important and helpful to have everything nearby while you are sitting down with a cup of hot tea to complete this major step in the process of filing bankruptcy in Portland.
Take Credit Counseling
You have to take a credit counseling course before filing bankruptcy in Portland because you can’t file bankruptcy without a certificate showing that you completed this requirement or that you are eligible for one of the very few exceptions. The Portland Bankruptcy Court has a link on its website for where to find a provider approved to offer this course to folks filing bankruptcy in Portland. A lot of the companies offer the credit counseling course you have to take only by phone or online, but there are some brick and mortar places you can visit, like this provider’s South Portland Branch. There is a small cost associated with this course but if this is a hardship, don’t hesitate to ask the course provider whether they have a way to request a waiver so you can take the course for your Maine bankruptcy for free.
Complete the Bankruptcy Forms
The forms you need to fill out when you file a Chapter 7 bankruptcy in Portland are available for free online or from the Court’s clerk’s office, which will give you one complete set of all forms you need that you can copy as many times as you want. The forms are organized into several different sections by topics like your assets, your debts, and a general overview of your financial situation. A common mistake in completing the forms to submit to the Court for your Maine bankruptcy case is missing a question or simply deciding not to answer a certain question. Neither one of these things are ideal, but as soon as you realize you made a mistake and missed a section you can update the form and submit it to the Court as an amendment, or updated version of the form. But remember, you can’t protect property you don’t list, and you can’t get protection from creditors you don’t notify about your Chapter 7 bankruptcy in Portland, so be as thorough as possible. It’s helpful to review each form carefully before starting to fill them out. If you hire a lawyer, they will take the information and documents you provide to their office to prepare the forms for you. If you can’t afford a lawyer, you should check if you are eligible for help from a local legal aid organization or other nonprofit like Upsolve.
Get Your Filing Fee
You should keep in mind that the there is a court filing fee that must be paid at the time you file your Chapter 7 bankruptcy in Portland, if you’re not (temporarily) excused from this requirement. The total fee to file a Chapter 7 is $335, to be paid in certified funds, so in the form of a cashier’s check or money order. It may seem surprising that one would have to pay money to declare bankruptcy, but keep in mind that not everyone’s situation is the same. Plus, there are certain exceptions for a temporary or even permanent reprieve. The Court understands that sometimes filing bankruptcy in Portland is necessary to stop a wage garnishment before someone can afford to save up $335 over a few months. If you can’t wait to file your Maine bankruptcy case even though you can afford to pay the full fee if given a little time and the protections of the automatic stay, you can ask the Court for permission to pay the fee in installments. If your household income is less than 150% of the federal poverty guidelines and you can’t afford to make payments, the Court may grant a fee waiver for your Chapter 7 bankruptcy in Portland.
Print Your Bankruptcy Forms
Once you are ready to file your Maine bankruptcy case, it’s time to print out the final product of all the work you have done so far, your bankruptcy forms. Even though you can technically file Chapter 7 bankruptcy in Portland by mailing your documents to the Court’s mailing address, it’s best to go there in person. Either way, you’ll have to print all the bankruptcy forms at least once, ideally twice. The first copy (your “original”) will contain your actual signature on all the required forms, so feel free to sign your name where indicated as you pull the pages off the printer. The second set will be for you to keep, so you know that your version of the bankruptcy forms is exactly the same as the forms you submitted to the Court for your Chapter 7 bankruptcy in Portland.
Go to Court to File Your Forms
As mentioned above, folks filing bankruptcy in Portland can do so by mailing all of the signed forms and the filing fee (or request to deal with the court filing fee some other way) to the Court’s mailing address. While that may be convenient, it’s better to actually go to the courthouse yourself to do it if you can. That way, if you forgot to sign your Voluntary Petition, the one document absolutely needed to file your Maine bankruptcy case, they will let you know right away, and you can fix the problem immediately by simply signing your name. If you file your Maine bankruptcy case by mail, the Court will mail back a notice outlining all the deficiencies in your documents, all in dry and confusing legal speak that may be hard to follow. Plus, when you visit the Court in person to file your Chapter 7 bankruptcy in Portland, you can bring your copy of the forms and ask the Clerk to file stamp them for you.
Mail Documents to Your Trustee
After your Chapter 7 bankruptcy in Portland is filed with the Court, it’s assigned a case number, a judge, and a Chapter 7 Trustee. The Trustee is the person you will most frequently interact with during your case. Trustees are independent contractors for the United States Trustee, who oversees all Maine bankruptcy cases on behalf of the U.S. government. They have certain duties and are charged with finding any non-exempt assets that they can sell for the benefit of your unsecured creditors. You have to send your most recent federal income tax return to your Trustee at least a week before your 341 meeting and file this declaration with the Court letting everyone know that you’ve taken care of this. Depending on who is assigned to your Chapter 7 bankruptcy in Portland, you may also receive a letter from your Trustee asking for certain additional information or documents. Make sure to respond timely and follow the instructions provided so your Trustee has no reason to suspect you are trying to hide anything by the time they get to meet you in person.
Take Bankruptcy Course 2
After you file your Portland bankruptcy case, you’re required to take a second course called the Debtor Education or Financial Management course to have your dischargeentered. It’s best to take this course soon after filing bankruptcy in Portland, so you don’t accidentally forget about it and have your case closed without your discharge getting entered first. Some companies offering the first (pre-bankruptcy) course are approved to offer this Financial Management course for folks in a Maine bankruptcy case as well, but you don’t have to go through them unless you want to. As long as the company you choose is approved, you can choose everything else about how, when and where you take the class. When the class is over, find out if they’ll submit your certificate of completion to the Court for you. If not, make sure you remember to send a copy to the Court as soon as possible, otherwise they won’t know that you’ve completed this requirement and are ready to have your discharge entered.
Attend Your 341 Meeting
The 341 meeting is the one time everyone filing bankruptcy in Portland has to go to Court in order to answer some questions. Your Trustee will be the one running the meeting and, after making you swear that you will tell only the truth, the Trustee will ask you some questions about your Maine bankruptcy case and your financial situation before filing bankruptcy in Portland. Your creditors will be notified about the date and time of your 341 meeting, which is also called the creditors’ meeting because they may ask you questions as well. Don’t let that frighten you, though, because it rarely ever happens. The most frequent issue at the creditors’ meeting is that someone forgot to bring a picture ID and their original social security card, and the Trustee can’t verify who they are.
Dealing with Your Car
If you are still making payments on your car loan, you may be wondering how filing bankruptcy in Portland would affect your loan and your car. The first thing you have to know is that if you want to keep your car, you have to pay for it. You can do that one of two ways. If your car is worth very little, especially when compared to what’s left owing on the loan, you can do a redemption. A redemptionallows you to pay for your car only as much as it’s worth now, with the remaining balance getting discharged as part of your Chapter 7 bankruptcy in in Portland. If you’ve not had your car for very long, it may be too valuable still, making a redemption impractical if not impossible. In that case, you can keep your car by keeping the loan that goes with it. This is done by entering into a reaffirmation agreementwith the lender in which you agree to be personally responsible to pay the loan in full even after the Court has granted you a discharge as part of your Chapter 7 bankruptcy in Portland.
Maine Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Portland
Maine Means Test
To receive the quick, fast, and often almost painless fresh start that a Chapter 7 bankruptcy in Portland provides, you can’t make too much money, as that wouldn’t be fair to everyone else paying their debts as they come due. You can show your eligibility through the Maine bankruptcy Means Test, which has two main parts. The first part is a relatively straight-forward income limit, based on the median household income in Maine. The second part allows you to show that you truly can’t afford to pay your debts by deducting certain pre-determined expenses from your income. You can file a Chapter 7 bankruptcy in Portland if you pass the Maine bankruptcy Means Test under either one of the 2 parts.
Median Income Levels for Maine
Maine Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Poverty Levels for Maine
Maine Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
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Maine Bankruptcy Forms
The Maine bankruptcy forms are the documents you submit to the Court of file your Chapter 7 bankruptcy in Portland. In addition to the official national forms, the Maine bankruptcy forms necessary to file Chapter 7 bankruptcy include 3 local forms created by the Court for use in the state. You can learn more about the forms needed for filing bankruptcy in Portland in this guide for unrepresented individuals published by the Maine Bankruptcy Court.
The basic principle behind filing a Chapter 7 bankruptcy in Portland is that you have to liquidate (or sell) some of your belongings so your creditors can get paid, but remember in reality, only 4 % of cases nationwide have money going to unsecured creditors! That’s because most people filing bankruptcy in Maine and elsewhere don’t own anything that is not protected by an exemption. If you’ve lived in the state for at least 2 years when filing bankruptcy in Portland, you can choose between the federal bankruptcy exemptionsand the Maine bankruptcy exemptionsbased on what works best for you, but you can’t mix and match.