People in Mississippi who have fallen behind on their mortgage payments face the possibility of foreclosure. While some lenders are open to loan modifications or short sales to satisfy the debt, many are not. Many lenders will begin foreclosure proceedings, which can end with the lender taking possession of the house and selling it at auction. The proceeds of the auction are then used to pay down the mortgage as well as the legal costs associated with foreclosure.
Where the lender is not willing to work with the borrower and forecloses on the property, filing for bankruptcy can protect the borrower. Once a person files for Chapter 13 or Chapter 7 bankruptcy, the court issues an Order for Relief that includes an automatic stay of collections actions. Creditors are then not allowed to attempt debt collection efforts until bankruptcy proceedings are complete. There are exceptions to the automatic stay in cases where the lender has already filed the foreclosure notice and lenders can file motions to lift the automatic stay.
Individuals who file for Chapter 13 bankruptcy set up a repayment plan as part of the bankruptcy process. The plan distributes the filer’s income to creditors, and the filer must account for current and past-due mortgage payments. If the person meets the requirements of the bankruptcy court for the length of the plan, he or she will usually avoid foreclosure and keep the home.
People who are struggling to pay down debts in Mississippi might want to speak with a lawyer. A lawyer with experience practicing bankruptcy law might be able to help by examining the facts of the case and suggesting a Chapter 13 or Chapter 7 bankruptcy filing to restructure or eliminate debts. A lawyer may be able to negotiate new payment terms with creditors or draft and file a bankruptcy petition to trigger the automatic stay.
Overall, the nation’s economy is in relatively good shape. This means that unemployment rates are down throughout much of Mississippi and the rest of the United States. However, there is a somewhat new phenomenon that is showing a darker financial picture for some Americans — there is a notable increase in bankruptcy filings for older individuals, particularly for baby boomers.
Anything that impacts the baby boomer generation, which represents approximately one-quarter of the population, is certain to have rippling effects throughout the entire economy. Economic researchers report that in the last 25 years, the rate of baby boomer bankruptcy filings has increased sixfold. The overall trend shows bankruptcy rates declining for those 54 and under yet dramatically increasing for the 55-plus group.
While any age group can be hit by major economic events, such as job loss or a family split, older people are unique in finding themselves transitioning into retirement. The combination of living longer, dealing with a decrease in social security benefits, less or non-existent pension plan benefits and far higher medical costs across the board places boomers and those nearing retirement at greater risk. Nothing occurring currently in the economy seems likely to change these trends in the near future.
Financial challenges can arise at any time in any one’s life. A fresh financial start may be possible with debt relief or a manageable payment plan. A bankruptcy lawyer can provide guidance and counsel in determining whether Chapter 13 relief would be appropriate under the specific facts and circumstances.
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.
Debt can be a significant source of stress for both men and women in Mississippi. However, data collected by Comet Financial show that women carry higher debt loads than men on average. The average student loan balance for women was $30,716 while men owed amounts that averaged $24,323. Car loans produced another disparity, with women owing an average of $12,183 compared to $10,371 for men.
Credit card debts followed the same pattern. While women carried an average outstanding balance of $6,559, men’s credit card debts averaged $5,163. Medical bills hit women harder as well. Their average medical debts were $1,110 more than that for men. The gender wage gap presents itself as the likely contributor of higher debts for women. In general, female workers only earn $0.72 to $0.82 for every $1 paid to male workers.
Regardless of gender, people have a strong interest in paying down their burdensome debts. To accomplish this, they might scrutinize their budgets for expenses that can be cut so that money can be redirected to debt balances. For many people, a second job has the potential to bring in hundreds of extra dollars per month that could go toward paying off loans.
When circumstances have forced a person so far into debt that keeping up with loan payments and living expenses appears impossible, speaking with an attorney about bankruptcy might reveal a solution. After reviewing someone’s financial situation, an attorney might recommend filing for Chapter 13 bankruptcy. This action might result in an adjusted payment plan that a debtor can keep up with every month. An attorney could prepare the financial disclosures necessary for petitioning the court. Legal support could allow a person to halt creditor harassment and potentially convince a court to discharge a portion of debts after the completion of a payment plan.
A cautionary tale is being given to consumers after some in the financial world are looking backward to 2008. Those in Mississippi and elsewhere in the country may want to pay heed to the warning.
During the housing and financial crisis of 2008 and the subsequent recession many not only had a larger housing debt than practical, but consumer debt was also higher than ideal. With the recession, nearly 10 percent of credit cards had at least one missed payment.
But while the recession was ongoing, nearly one half of consumers with credit cards were making an effort to pay down their credit card debt. Either by force or by choice, American consumers became more frugal. Better times often lead people to return to bad habits. Some feel Americans are returning to bad credit habits. The beginning of 2018 showed that consumer debt has reached an all time high.Though credit cards are a part of this debt, the new household debt focuses more on vehicle and student loans. Payments on each of these debts have an effect on the household budget. The fear isn’t so much the present ability to pay as most are meeting obligations.
The fear is that should a downturn in the economy take place, Americans have not left themselves enough of a cushion to weather a storm. A re-evaluation of spending habits as they apply to consumer debt is warranted. Cutting back on spending by 10 percent, avoiding revolving debt for nonessential items and always making more than the minimum payment are some suggestions.
An interruption of household income, even briefly, can have a substantial effect on household finances. In some cases, the situation may not be recoverable without assistance. In these instances, a consultation with an experienced bankruptcy attorney may open up options the debtor has not considered.
