Choosing the Bankruptcy Chapter that Suits You Best
Home>Choosing the Bankruptcy Chapter that Suits You Best
A person who is struggling financially and unable to repay his or her outstanding debts to creditors may have no other option but to go bankrupt. Filing for bankruptcy will allow you to pursue debt settlement, reorganize your finances, pay back a creditor, and have a fresh start. Declaring bankruptcy might be your last resort to solve your debt problems.
Bankruptcy laws differ from one state to another. The federal law in Mississippi regulates bankruptcy cases. The bankruptcy courts in this state have their own rules and regulations on a bankruptcy filing. A knowledgeable Columbus bankruptcy attorney can provide legal help regarding these rules to avoid penalties and errors in filing bankruptcy.
There are different types of bankruptcy filing to choose from depending on the severity of your financial situation. The most common types are bankruptcy Chapter 7 and Chapter 13. Once you have decided to file for bankruptcy, one of the crucial steps is to select which bankruptcy chapter will help you pay off your total debts and solve your financial problems.
Before you qualify for any of these two bankruptcy chapters, you are required to undergo credit counseling sessions within six months before you file bankruptcy and debt management courses after bankruptcy. You may take these sessions from one of the accredited credit counseling agencies by the United States Trustee in Mississippi.
In bankruptcy, you will not be forced to give up all the assets and properties that you have; however, you may not be able to protect everything that you have from possible liquidation. Each state has bankruptcy exemption rules that will determine the assets that you can keep when you decide to file Chapter 7 bankruptcy. On the other hand, when you file Chapter 13, these rules will help you determine the amount required to repay your unsecured creditors. Mississippi bankruptcy exemptions also include homestead and motor vehicle exemptions.
Bankruptcy filing starts with the completion of paperwork. A credible Columbus bankruptcy lawyer can assist you in such filing to assure the accuracy and completeness of all your documents. You must download and fill out the free official bankruptcy forms from the website of the United States Courts. You must disclose everything that you own and how much you owe to your creditor. You are expected to accurately declare your finances in detail including your bank account records, credit card bills, living expenses, loan debt, monthly income, assets, liabilities, debts, and all financial records on your bankruptcy form.
When a person files for bankruptcy, one of the requirements is to pass the bankruptcy “means test”. This test is done to check if you will qualify for the bankruptcy chapter that you will file. In Chapter 7 bankruptcy, you will pass the “means test” once you meet the standard income requirements. If your income is less than the median income of the state, then you are qualified for Chapter 7 bankruptcy. In contrast, if the income of your family exceeds the median income, you may still be qualified to pass the means test after you submit a detailed record of your payments made on secured debts and other standard expenses including food, housing, childcare, and transportation.
As of May 2019, the median income in Mississippi for a single household is $42,183, while for a three-member family it is $56,566. However, this value may be subject to change.
In Chapter 13 bankruptcy, you may pay back some or the full amount of what you owe under a three-year repayment plan if your income exceeds the limits of Chapter 7. The most important factor to consider in filing Chapter 13 is sufficient monthly income to wipe out your debts. The bankruptcy payment plan for Chapters 7 and 13 is calculated similarly. You are required to pay the non-exempt property value and the amount of your non-dischargeable debt.
Once you have completed all the requirements, you may submit the bankruptcy filing to either the Northern or Southern district bankruptcy courts in Mississippi. You may opt to file in your hometown or the district where you reside for the past 180 days before the bankruptcy filing.
The bankruptcy process is generally complicated and time-consuming. It has to be done systematically and accurately to avoid errors. You need to make sure that all your personal and financial information is declared in your application. When you file a bankruptcy, it is advisable to seek legal advice from our experienced Columbus bankruptcy lawyers at Rollins Law Firm. Our competent bankruptcy attorneys are going to help you achieve a debt-free life.