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Chapter 7 bankruptcy and Chapter 13 bankruptcy

Bankruptcy Attorney in Jackson, MI

We understand what you're going through and hear your stories every day. Living paycheck to paycheck, hand to mouth? Robbing peter to pay Paul? Have nothing left to live on after paying debt? Just struggling to survive? We file bankruptcy for people so they can take charge of their debt and get a fresh start. 

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If you're looking for a bankruptcy lawyer to hire, go to:

Why Choose Us?

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Affordable

Easygoing Process

Easygoing Process

We'll help you file bankruptcy with the minimum money out of your pocket. We charge a sliding fee based on your household income, so you do not have to pay us more than you can afford. We require no money to start working with you, and you can pay us in installments. We will work with you to get a waiver of the court filing fee if you are eligible, or to pay the court filing fee in installments if you aren't eligible for a filing fee waiver. Want to know what it will cost for you to file bankruptcy with us? Call us and we'll talk it over

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Easygoing Process

Easygoing Process

Easygoing Process

We'll lead you through the bankruptcy process step by step, in manageable pieces, on a timeline that works for you. We take the hassle and stress out of filing bankruptcy, with clear instructions about what is happening in your case, and what needs to happen next. Our helpful handouts and reminders are written in plain English, not legalese. We're available by phone, text, and email around the clock to answer your questions - nights and weekends too. Want to know more? Click here to ask us about our process. 

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No Judgement

Easygoing Process

Convenient Location

Whatever your reason for needing to file bankruptcy, we won't judge you. People file bankruptcy for any number of reasons, some they have control over, and others they don't. You do not have to beat yourself up for wanting or needing bankruptcy help. You deserve dignity, respect, and compassion and seeking bankruptcy help is often one of the hardest things people do. We are here to meet you where you're at, and to help you move forward. 

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Convenient Location

Personalized Communication

Convenient Location

We're centrally located in downtown Jackson, two doors down from the County Courthouse and the YMCA. No matter where you're coming from, our office is easy to get to. Free parking is available on site in the lot behind our building, and also on the street by our office. Finally, our office and public restrooms are on the first floor and easily accessible for those with limited mobility - no stairs or elevators to see us or get where you need to go! Click here for a map to our office.

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Community Ties

Personalized Communication

Personalized Communication

Everyone who works at Crossroads Legal, PLLC lives and works in Jackson, full-time. We are not a satellite office for lawyers from out of town, who do not live here and do not come to Jackson except when someone makes an appointment. We are from Jackson, and we are for Jackson. We are connected and dedicated to your community, and we are connected and dedicated to you.

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Personalized Communication

Personalized Communication

Personalized Communication

We use a variety of ways to communicate with you, depending on what works best for you. Do you prefer phone calls, emails, texting, faxes, or letters? We will meet you where you're at, so however you prefer to communicate we've got it covered. Don't have access to a computer? No problem, we'll work with you in person and through the mail. We return client calls and messages as soon as we can, but not later than the next business day.

What Our Clients Say About Us

Down to earth

Sincere and listened

Down to earth

We were both very pleased with our lawyer Trent. He is the most down to earth lawyer and a very caring person. He was always available to us for any questions we had, or Joanna was there for us too. They both made my wife and I very comfortable. And we would definitely recommend them to everyone in need of debt relief. God bless u both, and thanks again. 


Mike from Stockbridge, MI

Had my back

Sincere and listened

Down to earth

I am so grateful for all you and Joanna did for me. You were very helpful and professional. Always returning my calls and answering my questions and everything done in a timely manner. I felt you always had my back. Very very thankful.


Lee from Napoleon, MI

Sincere and listened

Sincere and listened

Not just another case

My siblings and I had a case that no one would help with, let alone research any of it for us. Trent guided my siblings and I through our court process and helped us achieve what we were looking for. He was very sincere and listened to everything we had to say even if we said it more than once. I highly recommend Mr. Trent Harris and Crossroads Legal, PLLC. I cannot thank Mr. Harris enough for all he had done for us.


Shaun from Jackson, MI 

Not just another case

Not just another case

Not just another case

Found Crossroads Legal on the internet.  Had no idea who to contact and I am so glad I found Trent!  He did a fantastic job helping us through the whole process of probate.  I would recommend him in a heart beat.  Knowledgeable, efficient and thorough.  Treated us like people and not just another case.  Thanks again Trent for all your help!


Kim from Jackson, MI

Charged fairly

Not just another case

Charged fairly

  

Trent was very helpful with my mother's tricky real estate sale. He was very responsive when we asked questions and charged fairly for services.


Julie from Grass Lake, MI

Contact Us

Phone / Address / Business Hours

We are located two doors down from the Jackson County Courthouse and the YMCA, on the west side of South Jackson Street between Wesley and Franklin.

Crossroads Legal, PLLC

404 S. Jackson St., Jackson, MI 49201

517-240-4236

Hours

Open today

09:00 am – 05:00 pm

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Who Can File Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy - Overview

Chapter 7 bankruptcy is a liquidation style bankruptcy. Essentially, you are allowed to keep a certain amount of property in bankruptcy. This is called your "exempt" property. If you have property above and beyond what you are allowed to keep by law (i.e., "non-exempt" property), you must turn your non-exempt property over to the bankruptcy trustee, who will sell it and use the money to pay your creditors. In exchange, you can get a discharge from your debts. 


Generally, you can file Chapter 7 bankruptcy if your household income from all sources is less than the state median for your household size, and you have no non-exempt assets you want to be able to keep after your bankruptcy. If your household income is above the state median for your household size, you must pass a means test to decide whether you can afford to file Chapter 7 bankruptcy, or whether you must file Chapter 13 bankruptcy instead. 


As of November 2019, the median household income in the State of Michigan is:

Household of 1: $4,347/mo

Household of 2: $5,273/mo

Household of 3: $6,402/mo

Household of 4: $7,666/mo

Household of 5: $8,416/mo

Household of 6: $9,166/mo


If you're wondering whether you can file Chapter 7 bankruptcy, call us and we can talk it over with you to find out if Chapter 7 bankruptcy might be right for you. 


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Who Can File Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy - Overview

Chapter 13 bankruptcy is a repayment plan style bankruptcy. You propose a written plan to repay your creditors what the law says you can afford to pay over a period of 36 to 60 months. This is called your "Chapter 13 Plan." Your Chapter 13 plan payments are paid to your Chapter 13 trustee, an official appointed by the court to administer your bankruptcy case. In turn, your Chapter 13 trustee will use your Chapter 13 plan payments to repay your creditors some or all of their debts. When you complete all your Chapter 13 plan payments, you can get a discharge from your debts. Chapter 13 is appropriate for persons with higher incomes, or who have non-exempt property that they cannot afford to lose in a Chapter 7 case. 


Generally, anyone with regular income can file Chapter 13 bankruptcy, unless they owe more than $419,275 in unsecured debt, or $1,257,850 in secured debt. These amounts are current as of November 2019. If you have debts that exceed these amounts, you must file a Chapter 7 or Chapter 11 bankruptcy instead.

Chapter 13 bankruptcy petition

Chapter 13 bankruptcy petition

How Do I File for Bankruptcy?

Our Process

Filing bankruptcy doesn't have to be difficult or confusing. We try to break the process into manageable steps you can handle. We know the process, so you don't have to. We'll coach you through what you need to do, step-by-step. 


Our Chapter 7 bankruptcy process typically goes like this:


Step 1: Pre-filing


Information gathering 

  • client questionnaire
  • meeting with attorney
  • required documents from a list we give you


Pre-filing credit counseling course

  • 90 minutes, taken on the computer or over the phone, about $20-25


Attorney fee and court filing fee

  • $335 court filing fee, attorney fee varies depending on your income level and your household size


Bankruptcy petition ready to sign and file


Step 2: Filing


We file your bankruptcy petition with the court


Step 3: Post-filing


Post-filing credit counseling course

  • 120 minutes, taken on the computer or over the phone, about $20-25


Attend your 341 meeting

  • In Ann Arbor or Kalamazoo, depending on what county you live in 


Get your bankruptcy discharge (in typical cases). 


Want some more detail on how this all goes together? We're glad you asked. A detailed list of all the steps you'll go through in a typical Chapter 7 bankruptcy case is listed on the following page: Our Bankruptcy Process.



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Bankruptcy FAQ

How does bankruptcy work?

What is Chapter 13 bankruptcy?

What is Chapter 7 bankruptcy?

Picture of a make-believe petition to file bankruptcy.

Bankruptcy is a legal process that allows people to get debt relief in a predictable and orderly way that is also fair to the person's creditors. Depending on how much income and assets a person has, he or she can file a Chapter 7 bankruptcy or a Chapter 13 bankruptcy under the bankruptcy code. Either way, the goal is a bankruptcy discharge: a "fresh start" available for honest people who, for whatever reason, have fallen on hard times. A Jackson bankruptcy attorney can help you navigate this process so you will have a successful bankruptcy case. 

What is Chapter 7 bankruptcy?

What is Chapter 13 bankruptcy?

What is Chapter 7 bankruptcy?

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Chapter 7 bankruptcy is a liquidation-style bankruptcy. In a Chapter 7, you can keep a certain amount of your property (known as "exempt" property), but if you have property above and beyond this level ("non-exempt" property), it will be sold off and the money used to pay your creditors. Most Chapter 7 cases are "no-asset" cases, meaning there is no non-exempt property to sell off for creditors. Chapter 7 cases were about 61% of the consumer bankruptcies filed in 2017. A Chapter 7 case is usually over within about 4 months of when it begins, and when the Chapter 7 case concludes you can get a discharge of most of your debts. People with higher levels of income or assets may be ineligible to file Chapter 7, and may have to file Chapter 13 instead. Your bankruptcy attorney can help you choose the right chapter that you should file under. 

What is Chapter 13 bankruptcy?

What is Chapter 13 bankruptcy?

Will bankruptcy hurt my credit?

Image of a monthly payment plan and calendar.

Whereas Chapter 7 bankruptcy is a liquidation bankruptcy, Chapter 13 bankruptcy is a debt repayment-plan style bankruptcy. In a Chapter 13, you, with your bankruptcy attorney's help, propose a debt repayment plan to pay secured debts for property you want to keep, and some or all of your unsecured debts. You can keep your non-exempt property, provided you propose to pay its value to your unsecured creditors under your Chapter 13 plan. Your plan will need to pay your unsecured creditors at least as much as they would've received in a Chapter 7 liquidation, or the amount of your excess income above and beyond ordinary and necessary living expenses during the term of the plan, whichever is greater. Chapter 13 cases were about 38% of the consumer bankruptcies filed in 2017. A Chapter 13 plan usually takes about 3 to 5 years to complete. When your plan is complete, you can get a discharge of most of your debts. Chapter 13 is totally voluntary and is available to just about anyone with regular income. But individuals with very high levels of debt (more than $419,275 of unsecured debt or $1,257,850 of secured debt) may be ineligible for Chapter 13 and may have to file under Chapter 7 or 11 instead. A Jackson bankruptcy attorney can help you decide whether Chapter 13 bankruptcy is the right choice for you. 

Will bankruptcy hurt my credit?

Can I keep my home in a Chapter 7 bankruptcy?

Will bankruptcy hurt my credit?

Image of a credit score dial pointing to good on a scale of poor to great.

Yes. A Chapter 7 bankruptcy or Chapter 13 bankruptcy filing will knock down your credit score temporarily. If you are starting from a high 780 credit score, it can drop by about 240 points. If you are starting from a lower 680 credit score, it can drop by about 150 points. Generally, bankruptcy will drop your score into the 500's. But if you are considering bankruptcy, your score may already be low and the loss not that great. 


During bankruptcy, it will be difficult for you to get new credit. But after your bankruptcy discharge, you may be a better credit risk and may find it easier to get credit. For this reason, many people accept the tradeoff of damage to their credit score, so they can leave bankruptcy in better financial shape and rebuild their credit. This can allow you to pay less for loans and credit cards in the future through reduced interest rates, allowing bankruptcy to save you money in the long run. A Jackson bankruptcy attorney can help you weigh your options, and decide whether the potential long-term upside to your credit in the future from getting a bankruptcy discharge is worth the short-term downside to your credit from filing a bankruptcy case. 

Can I keep my home in a Chapter 7 bankruptcy?

Can I keep my home in a Chapter 7 bankruptcy?

Can I keep my home in a Chapter 7 bankruptcy?

A basic black and white line drawing of a home

Yes, there are several ways you can keep your home in Chapter 7 bankruptcy. 


The first way you can keep your home in Chapter 7 bankruptcy is if you have no equity in your home, i.e. the home is worth less than what you owe on the mortgage. If this is the case, then you might be able to retain and pay: you would need to continue to make monthly mortgage payments when they are due, to pay real estate taxes when they are due, to maintain the property and refrain from committing waste, and to keep the home insured according to the terms of the mortgage. 


A second way you can keep your home in Chapter 7 is to claim any equity you might have in the home as your exempt property in your bankruptcy. Equity is the amount by which the value of your house exceeds the value of any mortgages secured by the house. You can use your exemptions (either under federal or Michigan law) to claim as exempt any equity you might have in the home, subject to dollar limits set forth under Michigan and federal law. If you have sufficient exemptions available, you can retain and pay: you would need to continue to make monthly mortgage payments when they are due, to pay real estate taxes when they are due, to maintain the property and refrain from committing waste, and to keep the home insured according to the terms of the mortgage.


A third way you can keep your home in Chapter 7 is to reaffirm the mortgage, provided you do not have more equity in your home than you are allowed to exempt under applicable federal or Michigan law. But we generally don't recommend to our clients that someone should reaffirm a mortgage debt. This is because one of the main goals of bankruptcy, if not the whole point, is to eliminate personal liability for pre-petition debts. A large, personal post-bankruptcy liability is exactly what we are trying to avoid by filing bankruptcy. The law allows bankruptcy debtors to keep their homes without reaffirming their mortgage loan, provided they are not otherwise in default under the mortgage. If a person reaffirms a mortgage and is later unable to continue paying the loan, the house can be foreclosed AND the mortgage lender could still sue the borrower for any deficiency balance left after a foreclosure sale. Generally speaking, we don't think reaffirming mortgages in bankruptcy is worth it, since it isn't necessary to keep the home and it would result in the borrower remaining personally liable on the loan. Nevertheless, a bankruptcy debtor may choose to reaffirm a mortgage if there are special reasons for the debtor. Whatever a client's reasons, the decision to reaffirm or not reaffirm is a personal decision for the client to make, and we help clients make an informed decision even if it isn't one we would personally make ourselves. 

More Bankruptcy Topics

What Does Unmanageable Debt Cost You?

Do You Need to Pay Someone for Credit Repair?

Do You Need to Pay Someone for Credit Repair?

Image of a cartoon character carrying a heavy box on his back labeled "debt."

If you have a lot of debt and aren't able to make the payments, your credit score will suffer. For better or worse, your credit score impacts how much you pay on an everyday basis for things you need to live. For example:


You'll pay a higher interest rate on your loans, paying much more money over the life of the loan to buy the same thing that could've been bought with less money, if you had a lower credit score that qualified you for a lower interest rate. 


If you exceed your credit limit, or if you overdraw your deposit accounts, you will be charged over-limit and overdraft or NSF fees by your financial institution. These fees can be significant, sometimes $35 or more at a time, and they add up fast. 


You may pay higher insurance premiums for things such as auto insurance, home insurance, renter's insurance, or health insurance. 


You may lose out on some employment opportunities, if the employer considers credit history as a part of the job application process. 


In sum, if you continue to carry unmanageable debt without taking corrective action to get rid of the debt and rebuild your credit, you may get trapped in a vicious cycle where you have to pay more for a large number of things you need to live, and you may never be able to build up any savings or financial security.


Bankruptcy can be part of a strategy for credit repair. For example, Chapter 7 bankruptcy can free up disposable income and allow you to emerge from bankruptcy with lower debt ratios, which can make you a better credit risk going forward. The judicious use of credit following bankruptcy can also help you re-establish positive payment history and accounts. A Jackson bankruptcy attorney can help you think these options over, and whether they might help you.

Do You Need to Pay Someone for Credit Repair?

Do You Need to Pay Someone for Credit Repair?

Do You Need to Pay Someone for Credit Repair?

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Credit reporting, credit monitoring, and credit repair are big business in the U.S. today. Bankruptcy might be part of your repair strategy. But do you need to pay someone to help repair your credit? Not necessarily. Here are some quick tips for credit repair self-help:


1. Make loan payments on time, for as many accounts as you can, even if it's only for one account. Your payment history is the biggest factor that goes into your credit score.


2. Reduce your balances. To have good credit, your outstanding balances should be less than one-half of your available credit. You can begin reducing your balances by adding a small amount each month to your minimum payments. Although it may not seem like much, a little bit goes a long way when repeated over time, and even a small amount tacked on to your minimum payment each month will more quickly reduce your balances and improve your credit score. The amount of credit you owe is the second biggest factor that goes into your credit score. 


3. Use some credit. But don't use more than you need to live within your means. You can keep lines open to establish length of credit history, but you should close any lines of credit that charge an annual fee. The length of time your lines of credit have been open is the third biggest factor going into your credit score. 


4. Don't open unnecessary new accounts, for example those offered in exchange for a one-time in-store discount or reward points. Also, minimize the number of hard pulls on your credit, for example those that occur when applying for insurance, or auto or home loans. While it pays to shop around, the number of recent requests for new credit is the fourth biggest factor going into your credit report. 


5. Monitor your credit report annually or more often to make sure that there is no false/inaccurate information, or that there have not been any unauthorized accounts taken out in your name. You can subscribe to a credit monitoring service to help you with this, and you can subscribe to a service that locks your credit file from new accounts being opened without your permission.


6. If you find false, inaccurate, unauthorized, or fraudulent accounts on your credit report, file a dispute with the Credit Reporting Agency to have the information removed from your credit report. The Credit Reporting Agency is required to do an investigation and to remove any false or inaccurate information it finds. Even if the Credit Reporting Agency will not remove an item from your credit report, you can attach an explanatory statement to any item you dispute, and explain the circumstances surrounding a negative item. Although an explanatory statement will not improve your credit score, it can help you if a new lender reads your credit report, rather than relying solely on the credit score, because they may be able to approve you for an underwriting exception and grant you a loan that you might not otherwise qualify for.

A Jackson bankruptcy attorney can help you think through how to use these tools after bankruptcy, so you can rebuild your credit on a more stable foundation. 

How Is My Credit Score Calculated?

How Is My Credit Score Calculated?

How Is My Credit Score Calculated?

Image of a pie chart showing elements of a credit score: payment history, amounts owed, etc.

If you're from Jackson County and will file chapter 7 bankruptcy or chapter 13 bankruptcy, you also need to understand how your credit works so you can rebuild it after bankruptcy. Your bankruptcy attorney can help you with this. Your credit score is calculated using a number of factors that look at how you use credit. 


The first and most important factor is your payment history for lines of credit. Your credit score will look at how many accounts you are paying on time versus how many are paid late or not at all. For the accounts that are paid late, your credit score looks at how delinquent they are - for example, 30 days behind, 60 days behind, 90 days behind, or more. 


The second most important factor is the total amount of debt you owe. Your credit score looks at the amount of debt you owe in proportion to your total credit available (i.e. your credit limits). To have good credit, a person should be using less than half of their available credit. Some types of debt - for example student loans - are ignored by underwriters when calculating these ratios, but it varies by lender. 


The third most important factor is the length of your credit history. Just like having too much credit is a negative for your credit score, having too little credit can be too, because there is no record of debts and repayments that can be used to analyze your performance over time. Having only a handful of accounts that have been open for years is better than having lots of accounts that were recently opened. 


The fourth most important factor is the number of recent accounts opened and new hard pulls on your credit. A sudden uptick in requests for new credit, or a number of new hard pulls on your credit report can drag down your credit score. It's best to avoid opening new accounts unless they're really necessary, and to minimize the number of hard pulls on your credit report. 


Finally, the fifth important factor is the types of credit used. Certain debts, such as secured debts for important items like auto and home loans, may be weighted more heavily than unsecured retail and credit card debts. Also, because so many people have student loans, and student loans are (theoretically) associated with increased earning capacity, student loans are downplayed when calculating a credit score.  

What Does It Mean to Go Bankrupt?

How Is My Credit Score Calculated?

How Is My Credit Score Calculated?

A man pulling both empty pockets out of his pants, showing he has no money.

To go "bankrupt" is a loaded word in our society. But the simplest meaning is that a person cannot pay their debts as they become due. Bankruptcy law is a legal solution to the problem of insolvency, since it is difficult for people who are saddled with crippling debt to meaningfully participate in the economy. People who face insurmountable debts have less incentive to work, own property, and spend money in the economy, because their efforts would mostly serve to enrich their creditors and not improve the debtor's quality of life. Chapter 7 bankruptcy and Chapter 13 bankruptcy are designed to clear away the hurdle of insurmountable debt so people can get back on their feet, help to provide a better quality of life for themselves and their families, and also help society by returning to full participation in the economy and as taxpayers. 


Background Concept: insolvency


If a person or business is solvent, then they have sufficient cash available to pay their debts as the debts become due. On the other hand, if a person is insolvent, then they do not have the cash needed to pay their debts on time. 


Insolvency can come about two ways. The first way is lack of income. A person's income stream may have been cut off, or their income has been reduced and is now less than their monthly expenses. Income loss is commonly associated with, for example, layoffs at work, accidents and injuries, hospitalizations or long-term illness of the employee or an employee's family member requiring FMLA leave, or needing to leave employment to take care of a special needs family member who requires round-the clock care. Income reduction is commonly associated with, for example, manufacturing slowdowns, loss of overtime hours at work, going from full-time to part-time at work, going on long-term disability, or retirement and relying on a fixed income. 


The second way a person can become insolvent is by having excessive debt in relation to liquid assets. A person may, over time, have built up a large amount of debt that greatly exceeds the value of their assets, or their assets are "illiquid" and cannot readily be converted into cash for paying debts. For example, this is what happened to many homeowners in Michigan after the 2008 subprime mortgage crisis. In Late 2008, real estate values began to plunge and left many homeowners "upside down" or "underwater" on their mortgages. Another way this commonly occurs is when people feel flush with cash in a good economy and accumulate high levels of debt because they feel good about the future (similar to what we are experiencing now in May 2019), but they have not planned for how to maintain payments on their debt when the economy and incomes turn south. When a person, despite having steady income, becomes "upside down" or "underwater" on their obligations, they are considered insolvent as well. 


Takeaway: bankruptcy is a legal solution for insolvency


Like it or not, insolvency is a feature, not a flaw, of our capitalist economy. Like any industrial or commercial process, our economy produces negative externalities, in terms of waste and inefficiency. Insolvency is one of those, and is intrinsic to human nature. We Americans, and humans in general, are generally positive about the future and we aren't great at forecasting calamities in the future. It would be nice if we could more accurately test the winds of economic change. Our Federal Reserve attempts to do this daily as its reason for being, with mixed results, but I digress... Well I suppose that's a topic for another post. 


Our way of life and our economy is designed to encourage people to take calculated risks, because over time we believe a risk-taking society produces the greatest social benefits for all. Not everyone gets dealt a winning hand though. Honest people nevertheless make mistakes and suffer financial hard times. The law acknowledges that people become insolvent even if it was partially caused by their own doings. In bankruptcy this is not held against a person unless their decisions were egregiously wasteful, reckless, fraudulent, or criminal. Accordingly, part of going bankrupt is to open up one's books to the public, in order to demonstrate an insolvent debtor's honesty and good faith. In exchange, society can grant those honest but unfortunate debtors a reprieve from their debts. And that, folks, is what it means to go bankrupt. A Jackson bankruptcy attorney can help you decide whether this might be the right solution for you.