Everything You Need to Know About Bankruptcy Laws in Mississippi

On Behalf of developers | October 16, 2024 | Bankruptcy,Blog,Chapter 13 Bankruptcy,Chapter 7 Bankruptcy

If you find yourself in the unfortunate position of filing for bankruptcy, it’s important to familiarize yourself with the ins and outs of bankruptcy in Mississippi. Knowledge is power and the entire process will be smoother for you if you understand the vital elements of filing for bankruptcy. The most important factors include the types of bankruptcy available to you, which petition may be best for your situation, what exemptions you may qualify for, and what to expect from the process in Mississippi.

Types of Bankruptcy in Mississippi

The Magnolia state adheres to federal bankruptcy laws and offers the traditional bankruptcy petitions for individuals and businesses.  

• Chapter 7: The liquidation bankruptcy option for individuals who have non-exempt assets that can be sold to pay creditors. To qualify for Chapter 7 bankruptcy, you must pass a means test in which you prove your income is below the median income in the state. Some assets are exempt, which means you will be able to keep them. Any other assets you have are sold off, your creditors are repaid, and any unsecured debts are discharged.  
• Chapter 13: This is known as the reorganization bankruptcy for individuals and is primarily available to those who have a steady income. You’ll repay your debts with a court-approved repayment plan over three to five years and are usually able to keep your major assets. To qualify for Chapter 13 in Mississippi, you must be able to prove reliable income and show that your debts remain below the federal limit. 
• Chapter 11: Designated for businesses, this reorganization bankruptcy allows businesses to restructure debt and continue operating while repaying creditors. 

Common Exceptions in Mississippi Bankruptcy

It’s important to know which assets you may be able to keep despite filing for bankruptcy. Mississippi protects some of your assets and these state-specific bankruptcy exemptions enable you to keep these assets rather than forcing you to sell them to repay your debts. 

• Homestead Exemption: This enables most people to keep their homes despite filing for bankruptcy by protecting up to $75,000-$150,000 of the equity in your home (this applies if it is your primary residence). The amount depends on your age and if you are filing singly or jointly with a spouse. 
• Personal Property Exemptions: In most cases, you will be able to keep up to $10,000 worth of personal property such as vehicles, jewelry, furniture, appliances, etc. 
• Wage Exemptions: The amount differs depending on your specific situation, but usually approximately 75% of your wages can be protected from garnishment.
• Retirement Account Exemptions: For the most part, IRAs and 401 (k)s are protected in a bankruptcy claim. 
• Wildcard Exception: This allows you to designate up to $10,000 to a particular item you are trying to keep that doesn’t qualify for other exemptions. 

Best Mississippi Bankruptcy Attorney

Although you may arm yourself with all the information in the world, it’s still the most beneficial for you to utilize the services of an experienced bankruptcy lawyer. This is one area where you want to ensure that your interests are protected, not to mention the importance of following every regulation and requirement to the “t”. A local Mississippi bankruptcy lawyer is the best way to accomplish all this and Pond Law Firm stands out in the crowd. With a reputation for effective representation and compassionate guidance, Michael Pond and his team are on your side. Contact us today and lay the groundwork for a successful and smooth bankruptcy process with the skilled support of Pond Law Firm.