What is a Maryland Suggestion Of Bankruptcy?

 Posted on July 24, 2025 in Uncategorized

If you are involved in a legal issue in the state and one party files for bankruptcy, you may hear the term "Suggestion of Bankruptcy." It is important to know what it means and what it actually does. A suggestion of bankruptcy is a formal notice filed in court that lets all parties know that someone in the case has filed for bankruptcy protection.

It is not an argument or a motion; rather, it is a "flag" of sorts that can change everything, including pausing an ongoing lawsuit and triggering the automatic stay that is typically associated with a bankruptcy filing. An experienced Charles County, MD bankruptcy attorney can help you determine whether a suggestion of bankruptcy is right for you, or, if you are on the receiving end, how to proceed.

Who Files a Suggestion of Bankruptcy?

A suggestion of bankruptcy is usually filed by the debtor or the debtor’s attorney, notifying state or federal courts that a party has filed for bankruptcy. The suggestion of bankruptcy includes basic information like the bankruptcy case number, court, and type of bankruptcy. The suggestion of bankruptcy is filed in a Maryland court case to trigger the automatic stay, putting the judge, opposing counsel, and clerk on notice that proceedings may be halted. The suggestion of bankruptcy helps avoid sanctions for continuing legal action after bankruptcy is filed.

What Happens After a Suggestion of Bankruptcy is Filed?

Once a suggestion of bankruptcy is filed, the underlying case is paused. Creditors must stop collection efforts, including garnishments, lawsuits, and foreclosures, and the court may close or hold the matter at hand until the bankruptcy proceedings.

A suggestion of bankruptcy pauses the underlying case, but it does not resolve it. The bankruptcy court will decide how the debtor’s debts will be handled, and once the bankruptcy is either dismissed or discharged, the stay may be lifted, and the underlying case resumed.

For example, suppose a business is being sued for unpaid debts, and subsequently decides to file for bankruptcy. The attorney for the business will file a suggestion of bankruptcy in the court where the lawsuit is pending, pausing the lawsuit until the bankruptcy case is resolved. The original lawsuit is not dismissed; it is only paused until the bankruptcy proceedings have concluded.

How Does a Suggestion of Bankruptcy Affect Creditors and Plaintiffs?

Once a suggestion of bankruptcy is filed, creditors are required to work through the bankruptcy court. Any violations of the automatic stay can result in penalties. Filing a proof of claim and being informed about bankruptcy timelines is critical for those involved. A proof of claim is a formal way for a creditor to inform the bankruptcy court about the debt owed to them by the debtor.

When a timely, accurate proof of claim is filed, the creditor is assured of the right to receive a share of the debtor’s assets if they are distributed during the bankruptcy process. Even secured creditors (those who hold a lien on a specific property) should file a proof of claim; otherwise, they must rely only on their lien rights to reclaim collateral.  Unsecured creditors rely heavily on a proof of claim to be included in any distribution of assets.  

The deadline for filing a proof of claim may be referred to as the "bar date," or the "claims bar date," and meeting this deadline is crucial. For most creditors in Chapter 7, 12, or 13 cases, this deadline is typically 70 days after the petition filing date of the bankruptcy suggestion. In Chapter 11 bankruptcy, the deadline may be based on court orders or local practice.

Contact a Prince George’s County, MD Bankruptcy Lawyer

Whether you are a creditor unsure how to proceed following a suggestion of bankruptcy being filed or a debtor facing legal action in a Maryland state court, a suggestion of bankruptcy carries serious weight in Maryland court proceedings.

A Bowie, MD bankruptcy attorney from Bloc One Services, LLC can help you understand the filing and what your next steps should be. Attorney Blocton is relatable, offering the local community high-quality legal services at fair prices. Call 240-200-0076 to schedule your complimentary, 30-minute initial consultation.