Bankruptcy Frequently Asked Questions

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Will I lose my tax return?

Mississippi bankruptcy law allows you to exempt or keep up to $5,000 from your federal tax return, $5000 of earned income credit proceeds, and $5,000 from your state tax return.

Will I lose all my property?

No. Due to the numerous exemptions-property people can keep if they file bankruptcy– it has been my experience that rarely does a person loses any property in bankruptcy.

What are the fees involved?

Attorney’s fee varies from attorney to attorney. But the filing fees that have to be paid to the bankruptcy court are universal. As of today, you are required to pay:

-$335 to the bankruptcy court as a filing fee to file Chapter 7

-$310 to the bankruptcy court as a filing fee to file Chapter 13

Credit counseling also varies but it usually a small fee, but always be sure the counseling providers are accepted by the Department of Justice.

How are student loans handled?

Student loans are considered unsecured debts, but are not eligible for bankruptcy discharge unless you can prove that they constitute an “undue hardship” on your life or the life of your family, which is extremely hard to do.

How does bankruptcy affect child support?

Filing for bankruptcy will not eliminate any requirements for child support or alimony, or any other maintenance or support payments.

Do any co-debtors need to file bankruptcy as well?

If you have a co-debtor, or someone who co-signed on a loan which has put you into debt, the law can get tricky sometimes. However, the law is clear on one point: Only the person filing will have their liability erased.

How often can I file for bankruptcy?

You may file for Chapter 7 bankruptcy every eight years and can typically file for Chapter 13 more often than that. You can file another Chapter 13 two years after a previous Chapter 13 in which you received a discharge and still be eligible to have your unsecured debts discharged in the new case.

How does bankruptcy affect check cashing loans?

Check cashing loans are short term loans that typically come with high interest rates. This is secured with a check which has been post-dated to a date when the borrower intends to have the money available to pay off the loan. Thus, the debt is unsecured and is generally eligible to be wiped out.

Will people know that I filed for bankruptcy?

Bankruptcy is understandably a very private affair, so a big question that comes up is whether people will know about it. I always tell my clients this: The court will keep a file on record containing all of the documents involved in the case. If anybody wants to know whether or not you've ever filed for bankruptcy, they would need to go to the specific court where you filed, search for the case number, and then get the file from the clerk. It can be done, but it's not exactly publicly announced information.

Will my employer know I filed for bankruptcy?

Under Chapter 7 bankruptcy there is no reason that your employer would ever know about your bankruptcy, nor would they usually care. Under chapter 13, they will know because they must send the agreed-upon amount from your paycheck to cover your chapter 13 plan payment.

When will the garnishment stop?

Garnishment ceases as soon as your paperwork is filed. As long as the debts are discharged, it will stop for good.

Do I have to have a certain amount of debt in order to file for bankruptcy?

To answer the question directly, there is no minimum debt requirement to file for either Chapter 7 or Chapter 13 bankruptcy. The maximum allowed debt to file under Chapter 13 is $360,475 in unsecured debt and $1,081,400 in secured debt. There is no maximum for Chapter 7.

Will I lose my retirement plan or pension if I file for bankruptcy?

Under current Mississippi exemption law, all retirement plans are exempt from creditors. Examples of the types of plans exempt are 401(k)s, 403(b)s, Keoghs, IRAs, defined-benefit plans, and profit-sharing plans.

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