All types of people in Mississippi might experience financial hardship and fall behind on paying their debts. When debt collectors start to contact these people, they might use harsh tactics that inspire fear. The Consumer Financial Protection Bureau reports that 25% of debtors have felt intimidated by collection agencies. Although debt is a serious matter, people have legal rights that potentially give them the ability to limit aggressive collection practices.
Being served with papers for a lawsuit from a debt collector ranks high on debtors’ fears. Even when people feel helpless when confronted by lawsuits, they should never ignore them. They should supply their official answer to the court within the deadline stated in the lawsuit. When people fail to tell the court their side of the story, judges side with debt collectors. They issue judgments against debtors that could enable drastic actions like wage garnishment or asset seizure.
Debtors can demand that the parties suing them prove their right to collect the debt. Creditors often sell unpaid debts to collection agencies. Debts might pass through multiple hands before a collector files a lawsuit. Legally, the burden of proof falls on the collector. Collectors do not necessarily possess the documentation to support their demands for payment. If that party cannot provide documentation showing that the person signed a credit agreement, then the court could side with the debtor.
Before responding to a lawsuit, a conversation with an attorney might be informative. A lawyer could check on issues like the debt’s statute of limitations. A person experiencing financial difficulties could also learn about bankruptcy. A bankruptcy filing could temporarily halt collection actions or a foreclosure. A successful filing might discharge or restructure debts and give a person a fresh start on life.
Some people in Mississippi who are struggling with debt might want to consider filing for Chapter 13 bankruptcy. This can allow a person to keep some of his or her assets.
In a Chapter 13 bankruptcy, an individual works with the court to create a payment plan for paying off his or her debts over a period that lasts three to five years. People who are able to stick to the payment plan and make mortgage payments may be able to keep their homes. They might be able to keep other major assets as well as long as they can keep up with their payments. It may be possible to discharge the bankruptcy earlier if the payment plan is completed in less time than originally planned.
Some debts, including taxes, student loans and child support, must be paid in full and cannot be discharged in bankruptcy. The next level of debt includes any other major assets that can be repossessed if the debt is not paid. Finally, there are unsecured debts, such as medical and credit card debt. Most individuals who file for Chapter 13 might have to pay some of these debts, but the court may allow them to discharge them in part. A Chapter 13 bankruptcy only stays on a person’s record for seven years unlike Chapter 7, which remains on a credit report for 10 years.
A lawyer may explain a person’s options for debt relief and whether he or she qualifies for a Chapter 13 bankruptcy. It is necessary for someone to have an income that is high enough to make the necessary payments. Once the bankruptcy filing is made, foreclosure, creditor harassment and any other actions against the debtor must stop. However, a Chapter 13 bankruptcy can offer a person a fresh financial start, and a person can go on to rebuild his or her credit.
