What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy, commonly called straight bankruptcy, comprises about 80 percent of consumer filings. The most drastic method of settling financial problems involves liquidating, or selling, the debtor’s non-exempt property and possessions and distributing the proceeds to the creditors. Most people who file Chapter 7 do not have many non-exempt assets.
What are exempt assets?
Under Mississippi law, a person may exempt $10,000 of specific types of personal property; insurance payments on the exempt property; income from disability insurance; most payments under a qualified pension, profit-sharing, or similar retirement or disability plan; and the debtor’s homestead up to the value of $75,000 over and above any mortgage amount.
What about my car loan and mortgage?
For secured debts such as a car loan or home mortgage, the debtor must continue to make payments on those loans to keep the asset. Otherwise, the creditor may petition the court for permission to repossess the asset.
How long does Chapter 7 bankruptcy stay on my credit history?
A record of the bankruptcy remains on the debtor’s credit history for 10 years.