What is the purpose of bankruptcy law?

The purpose of bankruptcy law in Maryland is to provide people who are overwhelmed by debt with a way to reduce or discharge their liabilities, helping them start fresh financially. Bankruptcy laws are set up to protect people in financial distress and give them a second chance to get their financial lives in order. Bankruptcy is a process that is supervised by the courts. It involves petitioning the court to declare an individual or company insolvent, meaning they cannot pay their existing debts. This allows them to reorganize or liquidate their assets to pay off the debt. During the process, creditors are legally barred from trying to collect any debt owed to them. In some cases, the individual will receive a discharge from their debt, meaning they no longer owe the money and can move on with their lives. In other cases, the debt can be restructured so the debtor can pay off a portion or all of the debt over time. In addition, bankruptcy law can also provide protection for the debtor’s assets, such as cars and homes, that would otherwise be taken away by creditors. Overall, bankruptcy law serves an important purpose for Marylanders who cannot pay their debts and need a fresh start. It helps them get back on their feet and move forward while protecting their assets from creditors.

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What is the purpose of bankruptcy law?

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