Mississippi residents who are having trouble paying off debts might look to the bankruptcy system for relief. For most individual filers, there are two options, Chapter 7 and Chapter 13. There is a limit on how much debt a filer can have if they want to file bankruptcy under Chapter 13. Specifically, the filer cannot have more than $1,184,200 in secured debts or more than $394,725 in unsecured debts.
Chapter 13 bankruptcy, which is sometimes called wage earner’s bankruptcy, involves the filer paying down debts for a period of between three and five years, pursuant to the terms of a repayment plan approved by the bankruptcy court. There is no maximum income limit for people filing Chapter 13, and it does not matter where the filer’s income comes from. Chapter 13 bankruptcy is a good solution for people who have regular income. Typically, the filer is allowed to keep important assets like a car or house.
Prior to filing, the debtor must go through credit counseling. After the bankruptcy petition and other required documents are filed, the bankruptcy trustee will work with the debtor to create a repayment plan. It is not up to the debtor how long the repayment plan will last. Rather, the period of repayment is determined based on the filer’s level of income.
Those who are considering bankruptcy as a means to relieve financial stress and reduce or eliminate debts might want to speak with a lawyer. Legal counsel with experience practicing bankruptcy law might help a client file the petition to begin the process. If necessary, the lawyer could fight for the client’s best interests during official proceedings.