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Month: December 2018
Tips for handling large medical bills

On Behalf of O’Brien Law Firm, LLC

Posted on: December 28, 2018

According to an article in Health Affairs, medical debt in collections peaks when individuals are in their late 20s. This is because younger people tend to make less money than those in their 50s or 60s. Furthermore, younger people are more likely to not have insurance. Even if a person has insurance, the policy likely comes with a deductible that an individual could have trouble paying. However, there are ways that those dealing with such debt in Mississippi and throughout the country can better manage it.

For instance, it could be possible to negotiate with a care provider to reduce the bill. This may work best for those who can provide detailed income and other financial information to demonstrate their ability to pay. A medical bill advocate may be able to negotiate on a patient’s behalf. In some cases, a substantial portion of the balance could be forgiven when going this route.

If that doesn’t work, a doctor or hospital may allow an individual to make payments each month. In the event that a bill is already in collections, there is a chance that the debt collector will take less than the amount owed to resolve the matter. Individuals who are searching for a way to pay down a medical debt could try to crowdfund the money or ask family members for a loan.

Those who are struggling to pay off a medical debt might benefit by filing for either liquidation or reorganization bankruptcy. Doing so may make it possible to put an end to creditor phone calls or other debt collection activities. This might mean keeping a home, car or other property that is secured with collateral. It may also mean that a creditor lawsuit could be postponed until the bankruptcy case has been resolved.

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What to avoid before filing for Chapter 7

On Behalf of O’Brien Law Firm, LLC

Posted on: December 26, 2018

Bankruptcy is a scary reality for many people living in Mississippi. Fortunately, the rate of people filing for bankruptcy appears to decrease around the country. In particular, many older Americans over the age 65 no longer have to seek out bankruptcy.

It is vital to realize filing for bankruptcy is not the end. In some cases, it is the only way to take control of your financial future. However, you need to go through your bankruptcy the right way. Many people doom themselves from the start by making one of the following mistakes before or during the bankruptcy.

Avoid using your credit card

When you suffer from extreme credit card debt, it may seem like a good idea to rack up more debt in the months before you file. This is a poor decision because a judge may still require you to pay off a large portion of the debt if it looks like you tried to get recent purchases discharged from the bankruptcy. You should stick to making purchases through your debit card in the few months before you file.

Avoid transferring assets

A lot of people think they can protect some of their assets by giving them to family members and friends. Concealing assets is not a good idea, and you should assume a judge will learn of such actions eventually. A typical example of this involves transferring the title of your car to another person’s name.

Avoid suing anyone

When there is someone you want to sue, you should wait until you resolve your bankruptcy first. Any legal claim you currently have in process can become an asset taken into consideration by the bankruptcy court. Even claims you have filed with others but have not gone to court yet can still come into play. It is a good idea to seek out sound financial advice before pursuing any type of legal claim.

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Chapter 13 bankruptcy and payment plans

On Behalf of O’Brien Law Firm, LLC

Posted on: December 19, 2018

A Mississippi debtor who successfully files for Chapter 13 bankruptcy will go on a payment plan that lasts for three or five years. Payments are made to a trustee, and the trustee then distributes the payments to creditors.

How much that has to be paid is based on the person’s income and expenses. It is necessary to submit expenses for six months. The income can be from a number of sources including employment, alimony or a pension plan. If it varies from month to month, the amount the person must pay can vary as well. For some expenses, such as rent, the filer can use the actual amount owed, but there is a government-set amount that is used for utilities.

Priority debts include things such as child support, taxes and alimony and generally must be paid in full. If a person wants to keep a piece of property, such as a home, the payments have to be caught up with. For unsecured debt, such as medical and credit card bills, the person has to pay as much as the nonexempt assets are worth. However, a person does not necessarily have to pay off all debts. At the end of the payment period, if the person has followed the bankruptcy agreement, many of the remaining unsecured debts will be discharged.

People who are struggling with debt and considering bankruptcy may want to discuss options with an attorney. Some people may hesitate to file for bankruptcy because they think they will be unable to afford the payments or that their credit will be ruined for decades. However, bankruptcy gives a person an opportunity to make a fresh start while avoiding creditor harassment.

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Income plays a role in determining credit card debt burden

On Behalf of O’Brien Law Firm, LLC

Posted on: December 12, 2018

To properly assess the impact of credit card debt in Mississippi, it’s important to compare debt levels with income levels. There is often a disparity in the American South. According to a study by, however, New Mexico is the state most burdened by credit card debt. Massachusetts residents were the least burdened by such debt. The median income in New Mexico is $46,744 while the median income in Massachusetts was $77,385.

Residents in both states owed roughly the same to credit card companies, but New Mexico residents took nearly twice as long to pay down their balances. It took roughly 18 months for households to repay an average balance of $8,323. Households in Massachusetts took about nine months to repay an average balance of about $8,000. This assumes that a family was putting aside 15 percent of its earnings to repay money owed to creditors.

Differences in income also meant that the states such as Maryland or Virginia with the highest overall balances were not among those with the heaviest debt burden. American households as a whole average about $7,000 in credit card debt, according to a report from NerdWallet. To keep debt in check, individuals can choose to use a debit card or pay for items with cash. It may also be possible to transfer balances to a credit card with 0 percent interest.

Individuals who are going through financial challenges may find relief through bankruptcy. Bankruptcy could allow a person to retain assets or avoid having them liquidated as part of the debt repayment process. This means that a debtor may keep a home or equity in a home until a bankruptcy case is over. Furthermore, creditors may generally not engage in a repossession or a foreclosure until a case is closed.

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What can you do if you owe taxes?

On Behalf of O’Brien Law Firm, LLC

Posted on: December 5, 2018

Often, difficult financial situations seem to snowball. Various types of debt accumulate and become increasingly harder to get rid of.

If you owe federal or Mississippi state taxes, it is important to know ways to handle them. Some people assume tax debt just goes away after filing for bankruptcy, while others may have heard bankruptcy can never discharge tax debt. Both of these assumptions are wrong. The best way to handle tax debt can vary depending on your situation.

How bankruptcy handles taxes

Your bankruptcy may discharge income tax debt you owe on returns due at least three years or filed at least two years prior to your bankruptcy filing. Generally, you need to file a return before your tax debt can qualify for a discharge; sometimes, filing a late return may help in this regard.

As a rule, bankruptcy will not address tax debt you incurred through fraud or evasion. It will also not eliminate any taxes other than income taxes.

If you do obtain a discharge for tax debt, it will mean you will no longer need to repay it (other than what is part of a Chapter 13 plan). The IRS will not be able to garnish your wages or take other actions. However, if the IRS or state tax authorities placed a tax lien on your property prior to your bankruptcy, the lien will remain in place. The only way you will be able to sell that property would be to pay the tax debt that underlies the lien.

Other options

You may also consider some other ways to manage your tax debt. Both the IRS and the Mississippi Department of Revenue may allow you to make a repayment plan. You can also ask for the reduction or elimination of some penalties.

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