Most bankruptcy filings come from individuals
On Behalf of O’Brien Law Firm, LLC
Posted on: February 20, 2018
Federal bankruptcy laws provide people in Mississippi with a possible path to a fresh start when they experience financial hardships. Data from 2015 collected by Debt.org revealed that 97 percent of the 844,495 bankruptcy filings from that year arose from individuals seeking protection from creditors.
The two most common forms of consumer bankruptcy are Chapter 7 and Chapter 13. The flier’s incomes and debts determine which form applies. For those who qualify within the terms of Chapter 7, they could achieve a court judgment that discharges some or all of their unsecured debts. The law exempts certain assets, like a primary residence or retirement account, from liquidation during this process. Nonexempt property, however, must be sold to pay creditors.
Under Chapter 13, a person develops a payment plan of three or five years. This form of bankruptcy generally applies to people who have a regular and reliable source of income. They also have the chance to protect more assets under Chapter 13 if they can meet the obligations of a court-approved payment plan. Upon the successful completion, many remaining unsecured debt balances will be discharged. Another option is Chapter 11, but this is for people who have debts higher than the amounts allowed under Chapter 13.
Problems like a medical crisis or job loss can lead to severe financial challenges, and people who find themselves in this type of a situation often do not know where to turn. They might find it advisable to meet with an attorney who can describe the bankruptcy process in more detail.