Answering Your Legal Questions

How much does it cost to file bankruptcy?
It costs $306 to file for bankruptcy under chapter 7 and $281 to file for bankruptcy under chapter 13, whether for one person or a married couple. The court may allow you to pay this filing fee in installments if you cannot pay all at once. If you hire an attorney you will also have to pay the attorney's fees you agree to.

What is a Chapter 7 Bankruptcy?
Chapter 7 is a liquidation bankruptcy designed to wipe out your general unsecured debts such as credit cards and medical bills. To qualify for Chapter 7 bankruptcy, you must have little or no disposable income. If you make too much money, you may be required to file a Chapter 13 bankruptcy. In a chapter 7 case, you can keep all property which the law says is “exempt” from the claims of creditors. But property which is not exempt is sold, with the money distributed to creditors. If you want to keep property like a home or a car and are behind on the payments on a mortgage or car loan, a chapter 7 case probably will not be the right choice for you. That is because chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt.

What are the drawbacks when you file Chapter 7?
With a Chapter 7 bankruptcy, the trustee can sell nonexempt property. It also does not provide a way to catch up on missed payments to avoid foreclosure or repossession.

What are the benefits?
It allows debtors to quickly discharge most debts and get a fresh start.

What is a Chapter 13 Bankruptcy?
In a chapter 13 case you file a “plan” showing how you will pay off some of your past-due and current debts over three to five years. The most important thing about a chapter 13 case is that it will allow you to keep valuable property–especially your home and car–which might otherwise be lost, if you can make the payments which the bankruptcy law requires to be made to your creditors. You will need to have enough income in chapter 13 to pay for your necessities and to keep up with the required payments as they come due.

What are the drawbacks when you file Chapter 13?
You must make monthly payments to the trustee for three to five years. You may have to pay back a portion of general unsecured debts.

What are the benefits when you file Chapter 13?
It allows debtors to keep their property and catch up on missed mortgage, car, and non-dischargeable priority debt payments.

Chapter 7 is liquidation. Chapter 13 is reorganization.

So what's next? Have more questions?
Schedule a free consultation with Elizabeth Spell, Jackson's finest bankruptcy attorney.
Call 601-956-4557 today. Because these things don't just go away. We are here to help you.