• Mississippi residents who wish to file Chapter 7 bankruptcy must pass a means test.law courts image by Peter Helin from Fotolia.com
  
  Chapter 7 bankruptcy is a court-supervised process in which a trustee collects a debtor's assets, sells them for cash and distributes money owed to creditors. In Mississippi, there are certain exemptions of the property of debtors. However, most people who file Chapter 7 bankruptcy have no property that is exempt from sale. In Chapter 7 bankruptcies, the debtor receives a discharge from the court that releases them from the liability of certain debts.
  
  

Exemptions

• The state of Mississippi allows individual debtors to claim an exemption on certain property when filing Chapter 7 bankruptcy. The U.S Bankruptcy Code allows exemptions on tangible personal property that does not exceed $10,000 in value. Household goods, books, clothes, motor vehicles, crops, professional tools of a trade, cash on hand, tangible personal property valued at less than $200, and professionally prescribed health aids are all eligible for exemption. Other exemptions include proceeds from insurance on real and personal property, income from disability insurance, individual retirement accounts, and annuities or pension plans established to provide benefits for an employee. Filing a Chapter 7 bankruptcy does allow the debtor to exempt one mobile home that is valued at $20,000 or less, as long as it is the debtor's primary residence. Debtors who own a mobile home that is claimed as homestead exemption may not exempt the mobile home from Chapter 7 liquidation.
  
  

Means Test

• Mississippi residents who wish to file Chapter 7 bankruptcy must first pass a means test. Passing the means test may be accomplished in two ways. First, the debtor's annual income is calculated using an average gross income for six months before filing for Chapter 7 bankruptcy. In order to qualify to file Chapter 7 bankruptcy, the debtor's income must fall below the state median. The second way to pass the means test is to complete the Chapter 7 Statement of Current Monthly Income and Means-Test Calculation. This is available for debtor's who have an income above the median income level.
  
  

Credit Counseling

• Mississippi requires those who file Chapter 7 bankruptcy to receive credit counseling. This must be done by completing a course provided by a Mississippi credit counseling provider. This course must be completed within six months prior to filing Chapter 7 bankruptcy. The state of Mississippi also requires residents who wish to file Chapter 7 bankruptcy to complete a debtor education course with an approved Mississippi debtor education agency. This education course must be completed before a discharge from bankruptcy can be finalized.