Are you one of the many residents in Mississippi who are facing serious levels of debt that you can no longer effectively manage on your own? If so, you may have given thought to filing for bankruptcy. While certainly a personal bankruptcy may offer you the chance to get back on your financial feet, it is important that you effectively evaluate your bankruptcy options so as to choose the right type of plan that meets your needs.
360 Degrees of Financial Literacy explains that there are essential differences between the two most common types of consumer bankruptcy. Chapter 7 plans are known for the potential loss of assets as those belongings backed by collateral such as cars or homes may be taken and sold in order to repay money owed to creditors. This does not happen in a Chapter 13 plan. Instead, a Chapter 13 plan is basically a form of debt consolidation that allows people to simplify their repayment and even to lower the amount they pay without losing assets.
A Chapter 7 bankruptcy may often be completed in as little as a few months but a Chapter 13 bankruptcy lasts at least three full years and possibly as long as five full years. Both plans have some types of debts that are not allowed to be included in the bankruptcies.
If you would like to learn more about the differences between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy, please feel free to visit the consumer debt relief options page of our Mississippi bankruptcy and debt website.