Bankruptcy is a court proceeding which lets a person or business have some or all of their debts discharged. It should usually only be considered as an option of last resort, because it can have serious long-term consequences, even if it can stave off financial disaster. This means that the costs and benefits need to be carefully considered before filing. Bankruptcy is governed by federal law and handled in federal courts, so the procedural and substantive rules involved in Mississippi are often the same as anywhere else in the U.S. However, individual bankruptcy courts have slightly different rules for items such as exemptions, so it would be a good idea to consult with a local Horn Lake, Mississippi bankruptcy Lawyer beforehand.
Chapter 7 Bankruptcy in Horn Lake, Mississippi
In Horn Lake, Mississippi, there are 2 main forms of commonly-used consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 liquidates some of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many types of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and essential personal items, like clothing. These assets are not available to creditors.
Once eligible assets are sold, and the proceeds turned over to the creditors, most remaining debt is excused. However, some types of debt cannot be discharged in bankruptcy, including student loans, taxes, child support, personal injury awards, and fines. If most of your debt in Horn Lake, Mississippi is not dischargeable, you might want to consider other options besides bankruptcy.
Chapter 13 Bankruptcy in Horn Lake, Mississippi
In Horn Lake, Mississippi, chapter 13 is very different from Chapter 7, and may or may not be the best option for you, depending on your situation. Chapter 13 Bankruptcy involves a court setting up an adjusted payment plan, which allows the debtor to pay off most or all of his debts over a longer period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.
Which Type of Consumer Bankruptcy Should I File in Horn Lake, Mississippi
This depends entirely on the facts of your particular case. If you have a decent amount of steady income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 might be the best option for you. If most of your property is exempt, and you don't have much steady income, Chapter 7 might be the best option.
In any case, it would be a good idea to consult a local bankruptcy Attorney in Horn Lake, Mississippi. Your Attorney can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).