Numerous people throughout Mississippi file for bankruptcy every year. Many of their stories remain untold because most of the time, bankruptcies with larger companies end up making headlines. For example, three Mississippi hospitals, along with a parent company in Tennessee, have had to file for bankruptcy recently, citing over $70 million in debts.
In the event you ever need to file for bankruptcy, you will undoubtedly have some questions. It is natural to feel concerned, particularly about how this action will affect your bank accounts. There may still be quite a bit of money in your checking and savings accounts, and you can rest assured that money will remain safe.
There is a chance your bank may not hear about the bankruptcy
You should not experience any issues banking with the same institution as long as your debt did not come from the bank. If you defaulted on a loan or racked up massive amounts of credit card debt from a bank card, then your bank will receive a notice from the court about you filing for bankruptcy. When this occurs, the bank will most often “set off” any accounts you have with it. This is legal because those funds are already within the bank’s possession. It is vital to remember that not all banks do this. This is why you need to inform your lawyer of all bank accounts you have so you can take action to try to protect all funds.
However, when your debt did not come from your bank, there is a chance the institution will not even hear about your bankruptcy. In this case, no notice will go out to your bank. Additionally, customers who only have simple checking and savings accounts typically do not receive credit checks from the bank. You will be able to retain all your bank accounts and the money in them.
Credit card debt leads to numerous people filing for bankruptcy every year. Mississippi has one of the highest bankruptcy rates in the United States, with roughly 361 people out of every 100,000 having to file for bankruptcy every year.
Filing for bankruptcy can be a viable option for many people to get their lives in order. However, there are actions many take directly before filing that significantly jeopardize the process. Therefore, before applying for bankruptcy, you should make sure you have not recently done the following.
Running up credit card debt even more
When some people decide they will file for bankruptcy, they figure they have nothing left to lose. They make a ton of purchases on their credit cards because they assume the courts will instantly forgive the debt. Most of the time, any credit card purchases made within 90 days of filing will not qualify for forgiveness. The court may then require you to pay off a significant portion of the debt even after the bankruptcy is over.
Transferring property to friends and family
Bankruptcy may require you to relinquish certain assets. In an attempt to avoid this, some people transfer certain items over to friends and family members so the court does not find them. This is illegal. It can derail the bankruptcy process, so make sure to be completely transparent with all the assets and debts you own.
Taking money out of your retirement accounts
Some try to take money out of their 401(k)s or other retirement accounts to either pay off creditors or stash some of it away. The bankruptcy code states you cannot pay off a creditor because it shows you favor one over another. If the plan is to hide the funds, then it is an unfounded fear. Bankruptcy does not impact retirement accounts, so you do not have to worry about losing those funds.
Your parents worked hard all their lives to save for a retirement that would ensure their comfort in their golden years, as well as to build a nice nest egg for their children and grandchildren to enjoy after they are gone. It would break your heart to discover they were victims of scammers who are determined to separate them from the assets they spent a lifetime building. Unfortunately for many residents of Mississippi and elsewhere, there are many financial scams that target the elderly and the vulnerable.
According to the National Adult Protective Services Association, about one out of every 20 senior citizens in the U.S. is a victim of financial scams or of people they know and trust. Your parents may have been intelligent and financially savvy throughout their lives, but sophisticated cons and declining mental acuity can make them easier targets in their senior years. The following scams are common against the elderly and the mentally vulnerable:
Sadly, many of these cons can drain your parents’ savings and retirement accounts before you can intervene. If you worry that your parents may become targets of financial scammers or dishonest relatives, you may wish to explore legal options.
One of the most vulnerable groups in society when it comes to filing for bankruptcy is senior citizens. This group is increasingly filing for bankruptcy due to a variety of factors, including mounting credit card debt, high medical expenses, and insufficient savings and retirement funds.
Senior citizens facing these debilitating debts and expenses must make a choice about how to overcome their financial struggles. Often without employment to help aid their income, they have few options. However, bankruptcy is a viable choice for many of these people.
Senior citizens and bankruptcy filings
A recent study revealed that since 1991, bankruptcy filings among people age 65 and older have increased threefold. The study suggests that one of the main reasons for this is due to the fact that the government and employers have increasingly shifted responsibility for financial well-being to individuals. That means senior citizens are now facing a range of financial responsibilities that once were covered by social “safety nets” that no longer exist or exist only in part compared to decades ago.
Options for bankruptcy
Although many people view bankruptcy through a negative lens, the truth is that this option can be one of the most effective choices for a senior citizen facing overwhelming medical debt, credit card debt or other financial hardships without recourse. Two types of bankruptcy are available to individuals: Chapter 13 and Chapter 7. Each type has different requirements, and the one a person chooses depends on her or his individual situation.
In a Chapter 7 bankruptcy, the individual does not have to file a repayment plan, as with Chapter 13. Chapter 7 discharges unsecured debt such as credit card debt. A Chapter 13 bankruptcy is suitable when a person has the ability to repay through debt reorganization. In Chapter 13, an individual can save his or her home from foreclosure because the repayment plan gives the individual an opportunity to catch up on missed mortgage payments.
If you are a senior citizen facing unmanageable debt, you should not ignore your situation, nor should you feel shame about it. The important thing is to know that you have options and that you can take proactive steps to begin building a stronger financial future.
If you, like so many others, have found that overwhelming debt has become a fixture in your life, you may be exploring your options and trying to figure out how to get your finances back under your control. People in your circumstances often feel hopeless, but the good news is, there are a variety of options that may meet your needs. Regrettably, however, some companies tend to prey on those struggling with seemingly insurmountable debt, and they do not always engage in ethical tactics when doing so.
For example, if you are facing massive amounts of, say, credit card debt, you may start receiving offers from so-called debt settlement agencies that attest that they can resolve your debts for only a small fraction of what you owe. Sounds great, right? Keep in mind, however, that, as with many things in life, if something seems too good to be true, it just well might be.
Why you should be wary
Typically, debt settlement companies will tell you they can negotiate with your creditors and argue down the amount of debt you owe. The problem is, however, your creditors have absolutely no obligation to follow along with the debt settlement agency’s proposal, so what your debt settlement representative tells you may be far from the truth. A debt settlement company may also avoid telling you about other potential risks associated with the process, which might include your credit taking a serious hit, debt collectors continuing to blow you up, and so on.
Spotting potential scams
While debt settlement agencies may prey on your stress and desire for a fast solution, there are key signs to be on alert for that should serve as red flags. More specifically, think twice before signing on with a debt settlement company that charges upfront fees, or one that instructs you to cease all communications with your creditors without explaining the potential risks involved in doing so. Similarly, avoid signing on with any company that makes guarantees about eliminating your debt, as again, your creditors have no obligation whatsoever to comply.
Despite what debt settlement companies tell you, signing on with one is rarely your best option. Consider alternatives before signing on with a company with unethical intentions.
