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Chapter 7 bankruptcy exemptions for Mississippi residents

Declaring bankruptcy is sometimes the best solution for those struggling with debt. The Bankruptcy Code provides several methods of doing so, the most common of which is Chapter 7. Declaring bankruptcy under Chapter 7 allows a court-appointed bankruptcy trustee to sell all the debtor's non-exempt assets and use the proceeds to pay off their debts, thereby giving the debtor a fresh financial start.

Not all assets are subject to liquidation and distribution- federal law has certain exemptions for things like home equity, government benefits, retirement accounts, personal property and compensation received as a result of being the victim of a crime. There is even a wildcard exemption covering any property of the filer's choosing. The amounts allocated for these exemptions are adjusted every three years in April.

State law determines whether one can use these federal exemptions or whether state- mandated exemptions must be utilized. Mississippi has opted out of the federal exemptions and has provided its own list of exemptions and corresponding monetary limitations.

Some of the most common Mississippi exemptions include: $75,000 of equity in the debtor's real estate residence or $30,000 of equity in the debtor's mobile home residence, $10,000 for personal injury awards and $10,000 for personal property such as motor vehicles, wedding rings, furniture, pets, appliances, crops, clothing, books, and tools of the trade. Pension, retirement, life insurance and public benefits also fall under exemption in Mississippi. Mississippi also provides a wildcard exemption; for residents over 70, any property up to $50,000 is exempt.

Chapter 7 is not the only -- and not always the best -- option for those seeking relief through bankruptcy. For those who are engaged in business and wish to remain so, Chapter 11 may provide a desirable alternative to liquidation. Chapter 13 may be able to provide homeowners with a payment plan so as to avoid foreclosure. With numerous considerations and nuances, bankruptcy is best approached when working with an experienced bankruptcy attorney who can help decide the most suitable path for debt relief.

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