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Chapter 7 Bankruptcy
A Fresh Start for Your Financial Future
Chapter 7 bankruptcy, often called a “Fresh Start Bankruptcy,” is a roughly 90-day process that allows individuals or married couples to eliminate most or all unsecured debts without future payments. It provides lasting relief while often allowing you to keep essential assets like your home and vehicle. Hughes Law Group has helped countless clients across North Mississippi stop collections, erase debt, and regain financial stability through Chapter 7 protection.
Chapter 7 bankruptcy can:
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Eliminate unsecured debts (credit cards, loans, etc.)
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Wipe out overwhelming medical bills
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Stop wage garnishments (except child support or alimony)
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Discharge divorce-related debts (excluding support obligations)
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Remove certain lawsuit judgments
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Erase IRS tax debts over three years old
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Eliminate vehicle surcharges and other unsecured obligations
With the automatic stay, collections, repossessions, garnishments, and harassing creditor calls stop immediately. Most filers are able to keep their homes, vehicles, and cherished possessions while gaining full debt discharge.
How Does One Qualify for Chapter 7?
Filing for bankruptcy gives a fresh start to people who find themselves overwhelmed by debt. In Chapter 7, unsecured debts are eliminated while secured debts, such as a mortgage or auto loan, can be kept if you continue making payments.
Many people are surprised to learn that good credit can be rebuilt within two years after bankruptcy. Bankruptcy does not mean you will have 7–10 years of bad credit; that’s a myth. The bankruptcy will appear on your credit report, but your actual score can improve much sooner, and many clients even receive new credit offers soon after discharge. Mortgages often become available again within two to three years.
Three Main Factors for Qualification
1. Average to Below Average Income
You generally must earn average to below average income for your household size. This is measured against Mississippi’s median income levels but also accounts for your specific living expenses and paycheck deductions. Even if your income is above median, you may still qualify after expenses are considered. If your income is too high, Chapter 13 bankruptcy may be an option.
2. Debt Beyond What You Can Reasonably Afford
There is no minimum or maximum debt required to file. The real question is whether your debt prevents you from maintaining a reasonable standard of living. For example, a $4,000 credit card balance may be just as unmanageable for one family as a $20,000 balance is for another, depending on income and circumstances.
3. No Substantial Assets
Filing Chapter 7 does not mean losing everything. Bankruptcy law protects essentials like cars, homes, household goods, tax returns, retirement funds, and other property up to certain values. In most cases, filers keep most, if not all, of their assets.