Answers To Common Questions About Bankruptcy
Bankruptcy is a great way to eliminate or consolidate unmanageable debt and reset your financial foundation. Unfortunately, many people fail to explore how bankruptcy can help them because of a stigma attached to it. They wait too long and end up losing assets they could have kept, such as retirement savings, clothes and, in many instances, their home.
Pond Law Firm in Jackson helps residents of Hinds County and neighboring counties resolve debt problems through Chapter 7 and Chapter 13 bankruptcy. On this page, we answer some frequently asked questions about bankruptcy. However, every bankruptcy is unique. We invite you to call or use our online contact form to schedule a free consultation. We can review your situation and recommend an effective course of action.
Are all of my debts wiped out in bankruptcy?
The short answer is it depends, mostly on what type of debt you have. A Chapter 7 bankruptcy can eliminate all of your unsecured debt, which may include credit card debt, medical bills and mortgage debt. Bankruptcy cannot eliminate spousal and child support debt or some tax debt. Student loans are also not dischargeable unless you are able to prove the debt will cause an undue hardship, which is difficult to prove.
What is the difference between Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 bankruptcy is also known as “liquidation bankruptcy” because filers lose some of their property in exchange for discharging unsecured debt. It is important to note that you can keep clothes, retirement savings, furniture and many other assets in Chapter 7 bankruptcy. Chapter 13 bankruptcy is known as a “reorganization bankruptcy” because it is aimed at high-earners who are able to consolidate unmanageable debt and create a repayment plan. In exchange, Chapter 13 filers are often able to keep a family home and other assets that may be forfeited in Chapter 7 bankruptcy.
What is the Chapter 7 means test?
Mississippi residents whose monthly household income over the past six months is higher than the state median income must pass the means test in order to file Chapter 7 bankruptcy. If your income is lower than the state’s median monthly income, you qualify to file Chapter 7. An individual or household that does not pass the means test because their monthly income is too high must file Chapter 13 bankruptcy. According to the last U.S. Census, the average annual income for a Mississippi resident is $37,590. For a household of two, the average is $45,298. Households above the median income level must factor in expenses such as mortgage payment, food, utilities, medical bills and transportation to determine if they meet the standards for filing Chapter 7 bankruptcy. The team at Pond Law Firm can help you determine if you pass the Chapter 7 means test.
How long will bankruptcy stay on my credit report?
Chapter 13 bankruptcy is removed from your credit report seven years after your filing date, while removal is 10 years after your filing date for Chapter 7 bankruptcy.
How long do I have to wait to file bankruptcy again if I have already previously filed?
You may file for bankruptcy as often as you wish without a waiting period, but you will not receive a full discharge of unsecured debts in a Chapter 7 bankruptcy if you received a discharge of debts in a previous filing within the past eight years. This eight-year time period begins from the date your previous bankruptcy was filed. It may be wise to follow a bankruptcy filing with another one sooner than that eight-year period. It is best to review the options with a knowledgeable bankruptcy attorney.
We Can Answer Your Questions During A Free Consultation
We welcome the opportunity to answer your bankruptcy questions and recommend an effective resolution to your financial problems during a free consultation. Call 601-948-4878 or use our online contact form to schedule a meeting.
Jackson-based Pond Law Firm is a federally designated debt relief agency. Our lawyer helps people file for bankruptcy relief under the Bankruptcy Code.