Falling behind on bills is not a prerequisite for bankruptcy in Maryland. Towson residents may petition the court while still current on every account if the numbers reveal an unsustainable path forward.
Federal eligibility applies statewide
Bankruptcy law is federal, so the core tests, means‐testing for Chapter 7 and disposable-income calculations for Chapter 13, focus on income, assets and total debt, not late fees or collection notices.
Why filing early can be strategic
Petitioning before default safeguards credit scores from additional negative marks and stops creditors from accelerating balances or initiating lawsuits. Proactive filings can also protect exempt property from garnishment or lien placement.
Weighing the timing
Bankruptcy is a powerful remedy, but it is not always the first or best step. If a short-term cash-flow dip will soon improve, maintaining payments or negotiating extensions may make more sense. Indeed, pausing payments too early can backfire, especially on secured debts, such as auto loans.
Towson filers must follow local rules set by the U.S. Bankruptcy Court for the District of Maryland. State exemptions, ranging from modest homestead protection to wildcard allowances, affect whether Chapter 7 or Chapter 13 offers better relief.
Conclusion
First, no delinquency is required. The court looks at overall solvency, not a stack of past-due bills. Second, early filing can prevent escalation. Acting before default avoids lawsuits, repossessions and additional credit damage.
Though, timing still matters. Steady income recovery or successful debt workouts may render bankruptcy unnecessary. Finally, local rules control exemptions.
Maryland’s exemption scheme influences which chapter and filing date preserve the most assets. And, a deliberate review of income trends, debt totals and exemption limits help determine whether filing before missing payments aligns with long-term financial stability