Changes in the bankruptcy laws have left many to erroneously think that they can no longer declare bankruptcy. This is not true.
A Chapter 7 bankruptcy can also be referred to as liquidation; although with most cases there is little if any actual liquidation involved. Chapter 7 is referred to as liquidation because all of your non-exempt assets are converted to cash to help pay back the debt owed. It is best to speak with a skilled Mississippi bankruptcy lawyer if you are unsure whether Chapter 7 is the best option for you.
In general, Chapter 7 best suits persons:
with income at or below the state median level
unable to adequately meet bills and living expenses each month
having little or no assets besides clothing and furniture
not declaring child support or alimony
without fines imposed for violating the law
without income tax debt
without student loans to repay
Under Chapter 7 an individual or business can ask the courts to erase the debts owed creating a fresh start. As soon as you file for bankruptcy you are immediately granted an "automatic stay." The stay prevents creditors from:
contacting you to collect a debt
garnish your wages
take your home, vehicle, or other property
shutting off your utilities
In order to decide whether Chapter 7 is really necessary for you as a debtor, you will need to take a Chapter 7 means test. This test simply compares your income to the median income in your geographic area for your family size. This ensures you, as a debtor, are not trying to abuse the system.
If you’d like to learn more: call us to speak directly with an attorney for a free, no obligation, consultation to see if you qualify for bankruptcy and if it is the right decision for you and your family or your business.
Wessler Law Firm is a small family owned law firm specializing in bankruptcy law since 1982.
Disclaimer: This article is meant for reference only, and is not intended to be legal advice.
For legal counsel regarding your situation, please consult an attorney licensed in your state.