Filing for bankruptcy offers crucial legal protections

Any resident of Southaven is likely to have countless questions about individual bankruptcy, but one of the biggest is usually: is filing for bankruptcy right for me? There are pros and cons to any financial decision, personal bankruptcy included; like any major move, filing for bankruptcy is an action that can prove extremely beneficial, if done for the right reasons.

Anyone even pondering bankruptcy is likely to have a need for debt relief. Bankruptcy generally isn't for those who have a few credit card bills that they could tackle if they saved more and spent less. Rather, bankruptcy is an option for those who need genuine protection from creditors whom they cannot repay. Issues like unemployment can lead to bankruptcy, as bills pile up and eventually grow to an unmanageable size. While people struggle to pay their regular bills, these debts will continue to grow and bankruptcy can become a viable and appropriate solution.

Bankruptcy helps residents by legally eliminating their obligation to pay certain debts - this is done through what is known as a discharge. It's important for residents to know that the type of bankruptcy they file - either Chapter 7 or Chapter 13 - will determine which debts are discharged. It's also key for debtors to understand that not every type of debt can be discharged. For example, alimony, child support and student loans are usually not dischargeable under personal bankruptcy law. Finally, debts that have been taken on after a person has filed for bankruptcy may also be non-dischargeable under an individual's bankruptcy plan.

Still, many types of debt that Mississippians cope with every day are indeed dischargeable under the debtor's plan. Bankruptcy can discharge some or all of a person's credit card debt and also can help a person hold on to his or her car or home. In addition, bankruptcy offers important legal protections. For example, bankruptcy puts an end to creditors' harassing attempts to contact a person and also halts attempts to garnish one's wages and seize assets.

Source: The Capital Gazette, "Personal finance: Is a bankruptcy filing right for you?" Vanessa Bright, Oct. 2, 2014

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