If seeking debt relief is at the top of your to-do list, you are not alone. Many Mississippi residents, as well as many thousands of people across the country, have encountered significant financial challenges in recent years. Filing for bankruptcy might be a viable option in your case, although there are several things you’ll want to know before filing a petition.
There are several bankruptcy programs available. However, each program has its own requirements. You might qualify for one but not another. It’s best to review eligibility requirements for all types of bankruptcy, and then determine which one best fits your needs and financial goals.
Chapter 13 bankruptcy is for debt reorganization
One of the things you might not know about bankruptcy is that each program has a unique purpose. For example, the Chapter 13 program is not designed for people who have no way to pay their debts. If that’s true in your situation, then you might want to explore Chapter 7 bankruptcy instead.
Chapter 13 is best for people who can pay their debts but are struggling to do so within their current payment plans. Perhaps you suffered a medical crisis, lost a job, suffered a reduction in earnings or needed to make unexpected car or home repairs. Any of these issues can be enough to throw finances off track. With Chapter 13, a payment plan can be fashioned to restructure your debt, perhaps extending the life of a loan and/or lowering monthly payment amounts.
Some debts may not be dischargeable
Another fact about bankruptcy that many people find surprising is that some debts are not dischargeable. This means that even after completing the bankruptcy process, these debts would still exist, and you would still be responsible for paying them. Types of debts that are typically not dischargeable include child support, most income taxes and damages awarded to a plaintiff in a civil lawsuit against you.
Bankruptcy does not necessarily destroy your credit
A third interesting fact to know about bankruptcy is that while it does remain on your credit report for several years (typically, seven for Chapter 13 and 10 for Chapter 7), filing for debt relief doesn’t automatically destroy your credit rating. In fact, it may even be possible to obtain a loan or a credit card following bankruptcy.
There may be additional issues regarding bankruptcy that might be relevant to your personal or business finances. It is wise to seek guidance and support from someone who is well-versed in Mississippi bankruptcy laws before determining which program might best fit your needs and whether debt forgiveness might be an effective option for you.
