What is Bankruptcy?
Bankruptcy is a federal court procedure to help individuals pay large debts that they are currently unable to pay. The goal of bankruptcy is to create a process that allows individuals a better opportunity to repay their creditors. There are typically two different type of bankruptcy proceedings that most use. Chapter 7 bankruptcy is categorized as a liquidation. You can sell or give up certain properties, and a short-term proceeding follows to pay off your debts. Chapter 13 is categorized as a reorganization. This is more a long-term proceeding, and monthly payments are made to pay off the debts. Chapter 13 requires a reliable source of income to file.
How do I Qualify?
Qualifying for Chapter 7 bankruptcy is different from qualifying for Chapter 13. One must pass the Chapter 7 means test, which calculates if you have enough disposable income to repay all of your debts. If your income is below the Mississippi median income, or if you are a disabled veteran then you are exempt from the means test and can file for Chapter 7 bankruptcy.
Chapter 13 bankruptcy is typically reserved for those who have sufficient income to pay their debts regularly. To qualify to file, you must not be a business entity. You must also not be barred by a prior bankruptcy nor had a bankruptcy case that wasn’t dismissed in the previous 180 days.
No matter what path you take to file for bankruptcy, you should not go through the process alone. Hiring an experienced bankruptcy attorney will ensure your financial health and make sure the debts you have accrued can be paid without harming your finances for the long-term. For a bankruptcy lawyer in the Pine Belt region of Mississippi, call Flowers Law Firm today.