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Southaven MS Bankruptcy Law Blog

Keeping your home and car under Chapter 7

Large amounts of personal debt aren't unusual nowadays, but the variation is often in each Mississippi resident's ability to pay back that debt. For residents of Southaven and surrounding areas, the answer to insurmountable debt is often Chapter 7 bankruptcy. Under this type of personal bankruptcy a debtor is able to make a fresh financial start via asset liquidation. Many wonder, though, if they may be able to file for Chapter 7 while still holding onto their home or their car.

In Mississippi, it is possible to keep both your home and your vehicle while filing for Chapter 7. Under Chapter 7, some property is exempt - it gets to stay with the debtor instead of going towards the bankruptcy estate to be sold for paying back creditors. Exempt property is usually that which is necessary for day-to-day living; a person can't get back on their feet without some of the basics of life. In Mississippi, these basics include homes and cars.

Nationwide credit card delinquencies stabilize

The financial picture of most Mississippians has likely changed in the past several years. Some may be in the process of tackling student loans after graduation, while others may be coping with lower-than-expected incomes or the fallout from layoffs during the worst of the recession. However, there is encouraging news on the financial front: the nationwide level of credit card delinquencies is at its lowest point in seven years.

The most recent version of the Transunion Industry Insights Report indicates an impressive drop in the credit card delinquency rate. Over the last year, the rate dropped almost nine percent. In the last quarter alone, the rate fell at about 15 percent. During the first quarter of this year, the rate fell at less than two percent. However, over the past year, the average amount of credit card debt held by each borrower did not experience any significant change.

Mississippi residents do not need to face repossession alone

There are countless reasons why a person may fall behind on bill payment. Perhaps a Mississippi employer laid-off a worker unexpectedly, or maybe the rising cost of living is simply too high. The culprit could be lingering credit card debt from financial errors that occurred years ago, or possibly insufficient knowledge when it came to student loans or home ownership. Whatever the reason, enough missed payments can send a man or woman into the realm of repossession or garnishment.

There are few things more intimidating than asset forfeiture. When creditors seize an asset that an owner hasn't kept up the payments on, the debtor is put in an unfortunate situation. This type of scenario can also involve wage garnishment, when a creditor secures a judgment to have a portion of one's wages withhold to pay off a debt. Both garnishment and repossession are difficult to handle alone and frequently invite assertive legal representation.

When is Chapter 13 more appropriate than liquidation?

One of the first questions any Mississippi resident may have about personal bankruptcy is what is the difference between Chapter 7 and Chapter 13 bankruptcy? Both types are used by individuals to obtain debt relief and a fresh financial start. However, there are key differences between the two that many debtors are unaware of until they are pondering bankruptcy for themselves.

In short, Chapter 7 allows a debtor to liquidate most of his or her debts. Chapter 13, on the other hand, involves a repayment plan that is approved by one's creditors. Since neither type of bankruptcy appears favorable on one's credit report, some may assume that Chapter 7 is always the more financially beneficial option. After all, if one is drowning in overwhelming debt, liquidation may appear more manageable than repayment.

Creditor harassment still a rampant problem in U.S.

As some De Soto County residents likely know, credit card debt has a unique way of spiraling out of control. Unlike educational debt, one generally doesn't go into credit card debt in the hopes of earning a lucrative income afterwards. Unlike mortgage and automotive debt, credit card debt often involves items that can't be sold for much value if money gets tight. Finally, the easily-accessible piece of plastic sitting in most Mississippians' wallets is all too tempting when cash is not at hand.

Of course, when one maxes out their credit cards and falls behind on payments, sooner or later, a debtor is likely to encounter debt collectors. Debt collection is big business nowadays, thanks to the recession and an economy that holds few guarantees. According to the Consumer Financial Protection Bureau, approximately 30 million Americans were involved in some sort of debt collection in 2012. When one has an account in collections, it's important to know what collectors can and cannot legally do.

Understanding wage garnishment in Mississippi

One of the most distressing financial challenges can be having one's wages garnished by a creditor or by the government to pay off a debt. If a Mississippi resident accrues a certain number of missed payments on obligations such as child support, student loans or even credit card payments, they may eventually experience garnishment. However, the topic of garnishment can be quite confusing for many who are unfamiliar with state and federal law on the topic.

Usually, garnishment does not occur until after a debt has accrued and creditors have attempted to contact the debtor and discuss repayment. If the creditor follows all applicable laws and still is unable to secure any sort of repayment from the debtor, the creditor may take the issue to court and obtain a judgment against the debtor. Following the issuance of a judgment, garnishment can then take place.

When are debts actually discharged under Chapters 7 and 13?

While there are countless financial intricacies involved in individual bankruptcy, many people are aware that a bankruptcy comes off of a person's credit report after a period of seven to 10 years. Still, beyond that mark, few people are familiar with the dates by which debts are discharged under personal bankruptcy.

A discharge is the official forgiveness of a debt after a person has filed a bankruptcy petition and the petition has been granted. Not every single debt a person has can be discharged; for example, neither public nor private student loans are currently dischargeable under bankruptcy, with very few exceptions. Still, if one has filed Chapter 7 bankruptcy in Mississippi, many of their other outstanding debts are likely to be discharged. Usually, the actual discharge takes place a few months after all the bankruptcy paperwork has been filed and processed.

Single parents facing unique credit card debt challenges

Being a single parent is almost always financially tougher than making ends meet with a partner. Despite Mississippi's relatively low cost of living, the economy is still far from fully recovered. At the same time, divorces and separations that happen, regardless of economic circumstances, can certainly have an economic impact. Pew Research has noted that there were 8.6 million single mothers who were acting as the sole or primary earner in their families in 2011.

While not as high, the number of single dads in the same time frame was around 2.6 million. Suddenly faced with paying the bills alone, many of today's millions of single parents understandably turn to credit cards to help confront their newfound financial challenges. With increased credit card reliance comes credit card debt; however, single parents often face a tougher climb out of debt than their married counterparts.

Threat of repossession accompanies subprime auto loans

Buying a car is usually an exciting time in any Mississippian's life. Still, if one's finances aren't in shape beforehand, or if a buyer encounters tough financial circumstances, they and their car could be in danger of repossession.

During the worst years of the recession, it became relatively difficult to get approved for a mortgage or auto loan. Lenders were tightening their belts just like everyone else, and in the wake of the subprime mortgage crisis, other types of loans also became harder to get for many. In recent years, the difficulties may have eased somewhat, especially with regard to loans for used cars.

Debt repayment timing can answer question of bankruptcy

Two of the most common questions surrounding bankruptcy are whether or not a person should file in the first place and, if so, what type of bankruptcy he or she should declare. One extremely important consideration when it comes to personal bankruptcy in Mississippi is the matter of timing. There are countless other factors, of course, that should go into such a serious decision. Nevertheless, the timing of debt repayment and the filing itself is of the utmost importance in answering bankruptcy-related questions.

If a person needs to make a large purchase in the near future, such as a home or a car, filing for bankruptcy can impede that process due to its effect on credit scores. Nowadays, credit scores are also used for less significant matters such as determining rental and utility deposits. Still, for someone with a modest income, having a bankruptcy on a credit report can make these expenses more formidable.

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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