How does a Chapter 13 bankruptcy satisfy Mississippi creditors?

Choosing between the two primary types of individual bankruptcy is not so simple of a task for Mississippians. With the advice of a qualified Mississippi bankruptcy attorney, a person in need of debt relief can select a type of bankruptcy that is most appropriate for their needs. For many residents of Southaven, this may be Chapter 13 bankruptcy.

Unlike Chapter 7 bankruptcy, Chapter 13 bankruptcy centers on a repayment plan, rather than asset liquidation to satisfy creditors. Typically, Chapter 13 bankruptcy is appropriate for those who have a steady income and are able to commit to a repayment schedule made up of manageable payments. The repayment plan satisfies creditors by either providing for a full repayment of the debts in question, or full utilization of a debtor's disposable income for a period of three to five years. Disposable income refers to the money that is left over after an individual has paid their living expenses as well as any taxes.

When a debtor meets with his or her Chapter 13 bankruptcy attorney, they will review the filer's financial situation and form a repayment plan based on the individual circumstances of the case. For instance, certain priorities, such as taxes, can be made more flexible by paying them over the course of the repayment plan.

Chapter 13 bankruptcy can help a filer practice sound financial management skills and establish a consistent history of full and timely payments. Moreover, this type of personal bankruptcy can put an end to creditor harassment, allow a person to keep their home and permit a filer to retain other types of personal property. For more information on how a Chapter 13 bankruptcy repayment plan works, it may be best to speak directly with a local bankruptcy attorney.

Source: AmericanBar.org, "Chapter 13 bankruptcy," accessed on Jan. 25, 2015

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