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 significant 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 controlled by federal law and handled in federal courts, so the procedural and substantive rules involved in Mississippi are often the identical as everywhere 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 Meridian, Mississippi bankruptcy attorney beforehand.

Chapter 7 Bankruptcy in Meridian, Mississippi

In Meridian, Mississippi, there are 2 main types of commonly-used consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 liquidates part 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 forms 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 the eligible property is sold, and the funds transferred to the creditors, the dischargeable debt is excused. Some forms of debt, however, can't be discharged in Chapter 7 Bankruptcy in Meridian, Mississippi. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be discharged, Chapter 7 may not be the best choice for you.

Chapter 13 Bankruptcy in Meridian, Mississippi

Chapter 13 bankruptcy in Meridian, Mississippi is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your particular case. Chapter 13 Bankruptcy involves a court setting up a revised 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 Meridian, Mississippi

This depends entirely on the facts of your particular case. If you have a decent amount of stable income, and a large amount of non-exempt property which you don't want to part with, Chapter 13 may be the best option for you. If most of your property is exempt, and you don't have much stable income, Chapter 7 might be the best option.

In any case, you should talk with a local Meridian, Mississippi bankruptcy lawyer. Your lawyer can advise you of your options and inform you of their likely consequences. This will make it much easier for your to make an informed choice.