Bankruptcy allows you to wipe your debt clean to start over. It can help you rebuild your credit and learn to manage your money wisely.
There are also benefits to be had during the bankruptcy process.
1. Automatic stay
Once you file for bankruptcy, the courts send an order to all your creditors preventing them from starting or continuing to take action to collect debts. It suspends the proceedings until the completion of the bankruptcy process.
The automatic stay, however, does not have the power to stop:
- Criminal proceedings
- Tax audits
- Child support or alimony
Filing for bankruptcy a second time in the same year may give you the option of requesting an extension of the first automatic stay.
2. Dischargeable debts
Bankruptcy gives you the ability to discharge debts to give you a fresh start. The discharge releases you from liability for the debt and keeps the creditors from going after you. Most Chapter 7 filers get the discharge after the completion of the bankruptcy process.
If you file a Chapter 13 bankruptcy, a discharge is not as easy to get. The courts may allow you to discharge non-priority unsecured debts. Some of these include credit card balances, personal loans and medical bills.
3. Bankruptcy exemptions
Bankruptcy law allows you to keep all or part of your property away from creditors. These exemptions may include your home, furniture and items you use for business.
Neither Mississippi nor Tennessee allows you to choose to take federal exemptions.
Bankruptcy is a means for you to begin again financially. Take the time to look over how the process can work for you.