What are the differences between filing for Chapter 7 and Chapter 13 bankruptcy?

The two most common types of bankruptcy available in Mississippi are Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy is designed to help individuals and businesses liquidate or sell off assets to pay off their creditors. It is also referred to as “straight bankruptcy” or “liquidation” and can be filed by individuals, couples, corporations, and partnerships. Chapter 13 bankruptcy, on the other hand, is a form of reorganization bankruptcy. This type of bankruptcy allows individuals to keep their assets while creating a repayment plan to pay back creditors over a certain period of time. It is also known as “wage earners” bankruptcy and can only be filed by individuals. The main difference between Chapter 7 and Chapter 13 bankruptcy is that Chapter 7 bankruptcy is designed to eliminate most of a person’s debt in a short period of time, while Chapter 13 bankruptcy is a long-term repayment plan that can last three to five years. Additionally, individuals who file for Chapter 7 bankruptcy must qualify for the filing based on their monthly income and the amount of disposable income they have available for repayment. Chapter 13 filers must also pass eligibility requirements, but in this case the requirements are based on the debtor’s ability to make regular payments over a period of time. In general, individuals and businesses who need to restructure their finances and need more time to do so should consider filing for Chapter 13 bankruptcy. Those who are unable to repay their debts and need to liquidate assets should consider filing for Chapter 7 bankruptcy.

Related FAQs

What are some of the potential pitfalls to filing for bankruptcy?
Can I keep certain types of property when filing for bankruptcy?
Are there any special provisions for filing for bankruptcy as a single parent?
What is a reaffirmation agreement?
What are the consequences of filing for bankruptcy?
What is the difference between a bankruptcy trustee and a bankruptcy lawyer?
How do I know if I qualify for a repayment plan?
Which debts cannot be discharged in bankruptcy?
How will filing for bankruptcy affect my spouse?
What are the consequences of not filing for bankruptcy?

What are the differences between filing for Chapter 7 and Chapter 13 bankruptcy?

Related FAQs

Related Blog Posts