When a Mississippi resident is facing overwhelming debt, options start to dwindle. Financial problems may have a single cause, such as an illness or job loss, or might be the result of several years of financial bad luck or mismanagement. However, the associated costs of bankruptcy may prove burdensome for a debtor and may even make filing for bankruptcy protection difficult.
Financial counselors indicate there are three categories of costs an individual filing for bankruptcy must consider: court filing fees, mandatory education classes and attorney fees. The minimum total for these is a little under $1500 while the maximum can be closer to $4000, depending primarily on whether Chapter 7 or Chapter 13 bankruptcy is involved. It is possible to have fees on filing and classes waived based on income as compared to federal poverty guidelines, in consideration of family size and state of residence.
Legal representation is not a guaranteed right, and it is possible to represent oneself in a bankruptcy proceeding. There are legal clinics that do not offer representation but can be of assistance with filling out the appropriate paperwork and legal forms. The question becomes whether it is worth the risk to file in pro per, that is, acting as one’s own counsel. Statistically, it is extremely difficult to successfully discharge debt through self-representation as compared to the success rate when represented by legal counsel.
Bankruptcy is governed by federal law, and procedures must be followed precisely. A consultation with an experienced bankruptcy lawyer might be helpful in determining if either Chapter 7 liquidation or Chapter 13 reorganization is appropriate under the specific circumstances of the case.
Financial challenges and overwhelming debt are problems for many Mississippi residents. Struggling with debt may lead to physical and emotional exhaustion, especially if the person has to moonlight. Paying back creditors is a weary task. However, many people choose to go this route because they think filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy may cause additional financial struggles.
Some debtors do not realize that choosing a route other than bankruptcy could mean losing funds in a retirement account because of the need to pay back creditors. In most cases, a bankruptcy filer does not need to relinquish assets held in an Individual Retirement Account (IRA) or a 401(k) plan. These types of funds are typically protected by bankruptcy regulations. Consulting with a bankruptcy attorney can help clarify the pros and cons.
Legal counsel may also help a client get a better settlement with creditors. It’s important to understand that debtors opting for debt settlements may need to pay taxes on the forgiven amounts. A debtor facing serious financial challenges may not have the money available to pay back the Internal Revenue Service. Furthermore, IRS debts generally cannot be forgiven in a bankruptcy. This makes obtaining good debt forgiveness terms all the more important.
An individual contemplating filing for Chapter 7 bankruptcy first needs to pass a means test. A bankruptcy attorney can help a client fill out the legal paperwork required to determine if the debtor qualifies. Setting up an appointment with a bankruptcy lawyer is the best way to make a wise decision.
Consumers who are having trouble keeping up with their debts may want to think about filing for bankruptcy. This could be especially true for Mississippi residents who have no savings or assets to pay off their debts with. Those who want protection from creditors may be able to file for Chapter 7 bankruptcy. In a Chapter 7 case, an individual is allowed to sell assets and use the money to pay off their debts.
If there is a remaining balance on an unsecured debt after assets have been liquidated, it may still be discharged. To qualify for a liquidation bankruptcy, a debtor must have a household income less than the state median. It may also be necessary to pass a means test, which looks at a person’s disposable income to determine if he or she qualifies for a Chapter 7 bankruptcy.
Those who don’t qualify for a liquidation bankruptcy might want to file for Chapter 13 protection. In a Chapter 13 proceeding, a debtor will make payments to creditors over a predetermined period of time. To qualify for Chapter 13 bankruptcy, an individual must have no more than $419,275 in unsecured debt and no more than $1,257,850 in secured debts. Debtors must also be current on their federal tax returns and have enough money to make plan payments each month.
Individuals who are facing the threat of repossession or a foreclosure may want to consider filing for bankruptcy. Doing so may make it possible to obtain debt relief without the need to give up property like a home or a car. When a case is filed, creditors may be barred from filing lawsuits or calling a debtor about an outstanding balance. Legal counsel may further explain the potential benefits of a Chapter 7 or 13 proceeding.
For many people in Mississippi, there can be a close relationship between divorce and financial problems. Existing financial difficulties can lead to tension and distress in a marriage. In addition, the extra challenge of property division can be devastating for people with little income and substantial debt. Therefore, a number of people decide to file for bankruptcy at the same time that they file for divorce. They may wonder whether it is better to make a bankruptcy filing before or after the divorce is finalized.
Some divorcing couples may want to file jointly for bankruptcy because they can discharge both of their debts before proceeding to the divorce. If they are filing for Chapter 7 bankruptcy, the entire process can be finalized in a few months. On the other hand, people filing for a Chapter 13 bankruptcy, often because they bring in over the median income in their area, may want to wait until after the divorce. This type of bankruptcy involves a years-long repayment plan, and it can be challenging to divorce while handling the plan as well. For example, the final property division outcome of a divorce can be delayed extensively.
Filing for bankruptcy jointly can help people deal with property like a home. When spouses file jointly, they have increased exemptions for property. People with income at or below their state median may benefit from a joint filing, especially if they are still on good terms. Those with high incomes, on the other hand, may wish to pursue bankruptcy separately.
The process for seeking debt relief and divorce can differ for each couple and each person. A bankruptcy attorney may provide detailed guidance and advice on how filing for personal bankruptcy might affect a divorce and potentially help people achieve a new financial future.
Many people living in Mississippi and around the country struggle with being able to pay off holiday debt. However, experts do have some possible options for individuals who would like to pay off their debt more efficiently.
One suggestion is to simply reduce costs. Many families set limits on how much they will spend on gifts for immediate family and agree with friends and extended family to avoid gift exchanges and instead get together at each other’s homes for holiday snacks and well wishes.
For those who do opt to purchase gifts, there are several strategies for paying off holiday credit card debt. The first is the debt snowball or its variation, the avalanche. In a debt snowball, individuals pay off their smallest credit card and then apply the money saved on that payment toward the balance of another card. This provides debtors a sense of accomplishment as debts are erased.
The debt avalanche is a different approach, which involves prioritizing debts with the highest interest rate. While this requires debtors to put off the pleasure of eliminating a debt entirely, it is often a more fiscally prudent option and costs less money over time.
Other options include taking out a personal loan at a low interest rate to pay off all credit card balances. Similarly, it may be possible to find a low-interest credit card that allows the transfer of high-interest balances. In both cases, however, consumers must be able to manage their existing finances so that they do not create an even larger debt on the new credit card.
Individuals who are concerned about money issues may be able to find debt relief through these methods or bankruptcy. An experienced attorney may be able to review a client’s case and make recommendations as to the appropriateness of a specific strategy.
