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Southaven MS Bankruptcy Law Blog

Coping with Credit Card Debt: Easier With Professional Help

Being burdened by debt is always difficult, but facing financial challenges along with creditor harassment can be particularly painful. Residents of Mississippi who have found that their consumer debt has grown out of control can consider several options for obtaining debt relief; a qualified attorney can offer legal advice regarding these options as well as strategic guidance for conquering credit card debt once and for all.

According to the Federal Trade Commission, knowing which debt relief tool is right for you depends on several different factors. These include your overall level of debt, your future objectives and your level of financial management skills. Some people might look into debt relief services, although the FTC recommends doing one's homework as to the legitimacy of such organizations before signing up with them. Unfortunately, there is no shortage of scammers looking to profit from someone else's misfortune, and the debt relief industry is no exception.

Chapter 7: A comprehensive approach to debt relief

Now that most Mississippians' taxes have been filed, many may be wondering about their financial future. Tax time can be incredibly stressful, especially for those facing overwhelming debt. Whether one owes the Internal Revenue Service, credit card companies, student loan providers or medical providers, a lack of money means one thing for all creditors: they don't get paid. Since most people can't drastically increase their income without years of intense hard work and retraining, other options may be needed.

One such option is Chapter 7 bankruptcy. This type of personal bankruptcy may be a solution for those in severe financial strain caused by unmanageable debt. Chapter 7, often called strait bankruptcy, is a way for people to achieve substantial debt relief via asset liquidation. However, a common misconception about Chapter 7 bankruptcy is that one has to "sell off" all of their belongings, including homes and cars. This is not necessarily the case, as in many instances filers can keep their personal property, including cars.

Why can Chapter 13 bankruptcy advantageous?

It is often difficult for Mississippi residents to make the decision to move forward with a Chapter 13 bankruptcy. When facing financial challenges, there will be numerous issues that will be up for consideration and it is easy to begin to feel overwhelmed. For some, filing for Chapter 13 is the easy choice and there are many reasons for that. Since it is known as a "wage earner's plan," it is often the most beneficial option for people who are employed or have regular income. Understanding the advantages of Chapter 13 is key.

When compared to a liquidation that can happen under Chapter 7, Chapter 13 will let the person retain a home that might have been threatened by foreclosure. When filing for Chapter 13, foreclosure can be stopped and it can also overcome delinquent payments for the mortgage as time passes. Those who choose Chapter 13 need to bear in mind that they have to keep making their mortgage payments and do so on time.

Our legal team helps Mississippians find a fresh financial start

We all face financial challenges at one point or another. But in some instances, the financial hurdles become too overwhelming, and we only seem to falling deeper and deeper into a black hole of debt. Many Mississippi residents find themselves too proud to ask for help, and many may consider bankruptcy a matter reserved for those who are utterly ruined. However, this is not the case.

The laws supporting one's ability to file bankruptcy

When people in Mississippi are in serious debt, the ability to file bankruptcy is often viewed as welcome opportunity to get a fresh financial start. However, especially if one chooses to file bankruptcy solo without a lawyer, the many different laws and rules surrounding the legal move can be highly confusing. At the root of the personal bankruptcy process is the ability to file, but what laws and legal theories support this key ability?

Filing for bankruptcy is a right found in several sources: the U.S. Constitution, federal law and Mississippi law. In Article 1, Section 8 of the Constitution, there is a grant of authority allowing Congress to establish uniform bankruptcy laws throughout the country. Interestingly, states are not allowed to regulate bankruptcy per se. However, states do have the authority to govern certain elements of the relationship between debtor and creditor.

What are domestic support obligations in bankruptcy?

A person often looks into filing for bankruptcy because they are in over their head financially - this can be due to countless factors, including credit card debt, medical bills, unaffordable auto payments and more. When these are combined with other obligations like student loans and mortgages, the result is often that a person simply cannot repay all of their debts at once.

This situation is not unusual for Southaven residents. When these types of severe financial challenges occur, a person often tries to prioritize their existing debts. A local Chapter 7 or Chapter 13 bankruptcy lawyer can be a huge asset during this period, as the personal bankruptcy process itself helps a debtor outline comprehensive financial priorities.

The government's rules for Chapter 13 credit counseling

Filing for Chapter 13 bankruptcy is a step that has helped many in Mississippi reclaim their financial power. Chapter 13 is a type of reorganization bankruptcy in which a debt repayment plan helps a debtor get back on his or her feet. The repayment period is typically between three and five years; at the conclusion of this period a person's remaining eligible debts can often be discharged. Chapter 13 is a tool to not only stop creditor harassment and reduce debt, but also to build a new credit history via manageable payments.

One of the requirements of Chapter 13 is credit counseling. New rules came about in 2005 that required individuals filing for Chapter 13 bankruptcy to complete a credit counseling course before filing. In addition, the 2005 changes also require that filers complete a debtor education course before their eligible debts are discharged. One of the goals of debtor education is usually to help the filer avoid filing again, so topics like effective budgeting and financial planning are covered thoroughly.

Are Americans underreporting their credit card debt?

Many times in life, people feel tempted to tell little white lies. Usually these are harmless and may even save someone's feelings from being hurt. In other cases, people may misrepresent themselves or their life circumstances in order to gain an advantage or save themselves from embarrassment. A new report indicates that many Americans may be fudging their numbers when it comes to reporting how much credit card debt they're in.

This is probably not surprising, considering the burden that credit card debt can be for many in Mississippi, Tennessee and even around the world. Using credit cards wisely can help both one's finances and one's credit score, but even the most responsible of users can run into unexpected financial trouble. Unfortunately, this is not unusual nowadays and many Americans have found themselves in over their heads with credit card and other debt.

Subprime car loan delinquencies at highest rate since '09

Most drivers are aware of the stress that a few missed payments can put on a vehicle owner. Even if one payment is late or missed, a lender is bound to contact the holder of the auto loan and start demanding payment. In today's unpredictable economy, it can be difficult to meet all of one's financial obligations. In some cases one's personal vehicle feels the financial crunch and the threat of repossession can arise.

According to recent media reports, America's auto loan situation is beginning to resemble that of the housing market during the financial crisis several years ago. Fitch Ratings indicates that subprime auto loan delinquencies are at their highest level since 2009. Specifically, almost five percent of subprime car loans were delinquent by at least 60 days, which is the highest rate since September seven years ago. Experian automotive has also reported that almost 21 percent of auto loans are now held by people with either subprime or "deep subprime" credit scores - these are generally scores ranging from 300 to 620.

Can I get rid of certain tax debts via individual bankruptcy?

As mid-April gets closer, many in Southaven are probably starting their taxes or perhaps finishing them up. In any event, some may be thinking about the often complicated relationship between individual bankruptcy and taxes. This topic can be highly complex and it is often best to seek legal advice from a professional. One question in particular that a local filer may have is whether they can get rid of tax debts via personal bankruptcy.

In general, many tax debts - money owed to the Internal Revenue Service or to state departments of revenue - are not dischargeable via bankruptcy. However, some federal tax debts may be eliminated via personal bankruptcy. Typically, Chapter 7 bankruptcy is more likely to involve the possibility of eliminating some federal tax debts for certain filers. A local personal bankruptcy attorney can explain how taxes and bankruptcy intersect in each client's circumstances.

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Subscribe to this blog's feed Visit Our Bankruptcy Law Website Heidi S. Milam

Attorney at Law, P.L.L.C.
7160 Tchulahoma Road, Suite A5
Southaven, MS 38671

Phone: 662-655-1605
Toll Free: 888-341-8136

Fax: 866-267-5360