Mississippi residents and others are on pace to amass $4 trillion in collective consumer debt by the conclusion of 2018. That would be an increase of $1 trillion over the past five years alone. The increase is attributed to both revolving debts and others like student and auto loans that have a fixed end date. Revolving debt has increased 22 percent since 2013 while student and auto loan debt has increased by 30 percent in the same time period.
Credit card interest rates are hovering between 16 and 17 percent on average, and that number could go up. This is because the Federal Reserve is planning on increasing interest rates up to four times in 2019. In 2018, Americans who have credit card balances have paid more than $100 billion in interest and other fees. Cumulatively, Americans owe $1.04 trillion in credit card debt, and this figure is expected to rise 5 percent in the last month of 2018.
The 5 percent increase was an estimate by LendingTree based on holiday sales figures. Americans have $2.9 trillion in non-revolving debts, but that figure does not account for outstanding mortgage balances. Those who are struggling to repay their credit card or other debts may be able to get help from a credit counseling service.
Those who are in the midst of financial challenges may be able to overcome them by filing for bankruptcy. In some cases, individuals may keep property like a house or car while they follow through with a repayment plan. In others, nonexempt assets may be liquidated in an effort to repay creditors. In either scenario, debtors are generally given a stay of creditor contact. This means that creditors are prohibited from taking steps to repossess an asset or contact a debtor about it.
Anyone in Mississippi or any other state must wait for eight years before filing for Chapter 7 bankruptcy again. This means it’s not possible to file for this same type of bankruptcy, which is popular because it wipes out most debt within months of the initial filing and approval, until the eight year period is up. Technically, there aren’t limits on how many bankruptcy cases someone can file, but there are limitations on when this type of protection can be sought after a previous bankruptcy was successfully filed and completed.
With Chapter 7, the eight-year limit between filings is pretty much set in stone. If a debt holder wishes to go from Chapter 7 to Chapter 13, however, it’s possible to file for Chapter 13 bankruptcy after Chapter 7 is discharged. The stipulation is that four years from the initial Chapter 7 filing date must have passed first. Going from Chapter 13 to Chapter 7 requires a six-year wait after a Chapter 13 debt is discharged.
However, it is possible for a debtor that started off with Chapter 13 to file for Chapter 7 earlier if they’ve paid off 70 to 100 percent of their unsecured debt. The debtor must also prove they’ve made their best effort to stick to their repayment plan. In some instances, the court may extend the period that another bankruptcy can be filed by an individual if a previous bankruptcy was “dismissed” but not “discharged.” A court may also issue what’s termed a 180-bar to prevent refiling if a debtor fails to follow court orders or commits bankruptcy fraud.
An attorney generally recommends that debtors consider a fresh financial start with bankruptcy only as a last resort. If a Chapter 7 filing was already completed and debt issues still exist, a lawyer may suggest considering Chapter 13 if a client isn’t able to wait eight years to file for Chapter 7 again. An attorney may also be able to help a debtor in the middle of a Chapter 13 bankruptcy convert to Chapter 7 if they aren’t able to keep up with the repayment plan.
