Bankruptcy in Mississippi – Overview

IT’S NOT AS BAD AS YOU THINK

When everything else fails, and the bill collectors are at the door after you have done all you can, bankruptcy is an option you should learn about and consider along with everything else.  Who do you turn to for advice?  Everyone you speak with will have an opinion on what you should do, but only you can decide what is best for you.  And do not believe everything you hear from the TV or online experts.  They may be true financial experts, but most of them have never been in debt or had problems with credit.  In order to decide if bankruptcy is right for you, you need facts – not hearsay from family or co-workers or the myths and misinformation you hear about on the TV.

Most people wait far too long to seek help for their debts and end up in a more difficult position than they would have been.  They ignore the red flags that are warning them of financial disaster.  You should heed the warning signs early. Some of these alarms include struggling to make your minimum payments, borrowing from one card to pay another, tapping your retirement accounts to pay your debts, getting behind on your rent or mortgage, threats of foreclosure or repossession, and constant debt collection calls and notices.  Meet with an attorney that specializes in bankruptcy early on and get the facts and information you need to decide what is best for you.

I CAN HELP YOU 

Frank_new borderedBankruptcy laws were created to protect you, to protect your family, and to protect your property.  Bankruptcy laws are the strongest set of consumer protections laws we have available to us in this country (United States Constitution, Article 1, Section 8, Clause 4).

Stop GarnishmentsStop ForeclosureStop Repossessions.

I have helped people from all backgrounds.  Nobody is immune to financial difficulty.  And like yourself, the far majority of people that file bankruptcy are hard-working and financially responsible citizens.  Illness, job loss, loss of a spouse – life can sometimes deal harshly with us all.  The most important thing is to know that there is hope and you do have options. You can overcome these difficulties and move forward.

WHAT IS THE FIRST STEP?

Contact me.  We will discuss your situation specifically.  Whether you prefer to discuss your situation with me on the phone or in person, I am available to you. You will talk with and meet with me personally.  There is no consultation fee.  Every situation is unique, so the first thing we must do is to discuss your financial circumstances so that I can then provide you with the information you need to decide what legal solution is best for you.

WHY HIRE ME?

There are a lot of choices when you are looking to hire a bankruptcy attorney.  You may have reviewed several other sites before coming to mine…so why hire me?  I can and will help you.  My practice focuses strictly on consumer bankruptcy law in Mississippi.  I live, eat, and breath consumer protection law. I am an experienced trial attorney.  I will fight for your right to a fresh start.  I know that you feel embarrassed, alone, ashamed, stressed, and that there is no way to overcome your situation.  I’m here to tell you that you do have options.  Read More About Frank

YOU’RE NOT ALONE

According to data from the Administrative Office of the United States Courts, American consumers filed more than 1.59 million bankruptcy cases in 2012.  That is about 1 in every 150 people.  And those statistics do not reflect just the current terrible economic situation, this has been going on for years.  The numbers do not lie.  In the past decade, over 12 million people have filed for bankruptcy.  You are most definitely not alone.

WHAT IS BANKRUPTCY?

First, the basics:  Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court.  Bankruptcy cases are always filed in the United States Bankruptcy Court, but cases depend heavily on state and local laws.  It is up to your bankruptcy attorney to be aware of the federal, state and local laws and to guide you through the process.

TYPES OF BANKRUPTCY: BECAUSE EVERY SITUATION IS UNIQUE

There are four basic types of bankruptcy used by citizens of Mississippi.

Chapter 7, also known as straight bankruptcy, is the fastest, easiest and least expensive kind of bankruptcy.

Chapter 11 reorganization, is used primarily by businesses but also by people with unsecured debts higher than $360,475 or secured debts of more than $1.08 million.

Chapter 12 is used solely by family farmers as a way to reorganize their finances.

Chapter 13 is the personal version of Chapter 11.  Individuals with a regular source of income can put together a payment plan in exchange for keeping all of their property.  It is used heavily by people who are looking to save a home from foreclosure or a car from repossession.

The most common types of personal bankruptcy for individuals are Chapter 7 and Chapter 13.  As much as 70% of all U.S. consumer bankruptcy filings are Chapter 7 cases.  Corporations and other business forms file under Chapters 7 or 11.

PROTECTION FROM CREDITORS AND DEBT COLLECTORS

Filing for bankruptcy, any kind of bankruptcy, immediately triggers a court order that stops any action by all creditors against you or your property.  This court order is called the “automatic stay,” and it is an important element of your bankruptcy case.  If you file for Chapter 13 bankruptcy, that court order also protects anyone else who co-signed or is obligated to repay your debts.

The automatic stay gives you protection from your creditors during the bankruptcy case.  In order for a creditor to continue to take action against you, that creditor must obtain court approval first.  There are, however, limits on how long the automatic stay lasts and these can depend on the type of bankruptcy and whether or not you have filed bankruptcy before.

WHAT THE AUTOMATIC STAY DOES COVER

As long as the automatic stay remains in place, your creditors are prohibited from taking the following actions:

    • Beginning or continuing any law suit against you
    • Sending collection letters and calling you on the telephone
    • Repossessing any property
    • Foreclosing on your home or land
    • Garnishing your paycheck or bank account
    • Freezing your bank accounts

There are many other protections, but as you can see, the automatic stay gives you a tremendous amount of power when you file for bankruptcy.  It stops many types of creditor actions, gets the creditors off your back, and gives you the ability to feel the effects of a fresh start immediately.

WHAT THE AUTOMATIC STAY DOES NOT COVER

So what actions are not covered by the automatic stay in bankruptcy? The automatic stay does not stop:

    • Criminal proceedings;
    • Actions for a family or child support order or the modification of such order;
    • Actions to collect support from property that is not property of the estate; and
    • Tax audits, demands for you to file tax returns or assessment of taxes due.

If you are thinking about filing for bankruptcy and have any of these types of problems, it is best to talk with your lawyer before the case is filed to discuss how to deal with the issues that will continue.  There may be options in a Chapter 13 to help you work with those individual creditors during the course of your bankruptcy case, but you will never know unless you are working with a fully-informed and experienced bankruptcy lawyer.

HOW LONG DOES THE AUTOMATIC STAY LAST?

The automatic stay is a powerful protection that comes into effect as soon as your bankruptcy case is filed, but the protection does not last forever.  You need to realize that this shield against your creditors is not perfect, and will not work in your favor until the end of the world.

The automatic stay remains in effect until a creditor gets an order from the judge in your bankruptcy case to stop the protection or “lift the stay”.  In addition, remember that there are cases when the automatic stay may come into effect for only a limited amount of time, or sometimes, not at all.  The automatic stay ends the minute your bankruptcy case ends.  As always, rules have exceptions and limitations.  Be very careful when relying on the automatic stay; if you do not, then you may think you are protected when you are not.  This is an area where having an experienced and knowledgeable bankruptcy attorney is important.

DIFFERENCE BETWEEN THE AUTOMATIC STAY IN CHAPTER 7 AND CHAPTER 13

In Chapter 7, the automatic stay covers only you, the person who files for bankruptcy.  In Chapter 13, the automatic stay also covers other people who are co-signers on your debts.  That means when you file for Chapter 13 and are using the process to stop a foreclosure or repossession, anyone else who is on the loan with you will also get the benefit of your bankruptcy protection, even if they did not file with you.

ROLE OF THE BANKRUPTCY TRUSTEE

When a chapter 7 or Chapter 13 case is filed, the U.S. trustee appoints a trustee to administer your case.  In a Chapter 7 bankruptcy, the trustee will take over and sell any property or assets you might have that are not protected by Mississippi laws or Federal laws.  If all of your assets and property are protected (exempt) or subject to valid liens and debts, the trustee will normally file a “no asset” report with the court, you can keep all of your property and there will be no distribution to unsecured creditors.  In a Chapter 13 bankruptcy, you make payments to the trustee each month and he will see that each creditor you decided to pay is paid something each month.

WHAT DO I GET TO KEEP IN BANKRUPTCY?

Certain assets, property, and possessions are protected and cannot be taken from you in bankruptcy.  These are called exemptions.  Exemptions are laws that indicate what assets and property you can keep and protect while eliminating debts in a bankruptcy proceeding.  Mississippi citizens are required to use the Mississippi exemptions.  Some of the more common and most important exemptions that Mississippi debtors can use are:

    • Personal property with a total value of up to $10,000.  Married couples filing together get $20,000.
    • Retirement and pension accounts are fully protected.
    • Home and land with a total equity of up to $75,000.

There are many other Mississippi exemptions and Federal non-bankruptcy exemptions that are available to Mississippi citizens, so it is important to consult an experienced bankruptcy attorney to learn what is protected and what is not.

The theory of bankruptcy in a Chapter 7 case is that nonexempt property is sold by the trustee  to provide a fund to pay claims of your unsecured creditors.  In the real world, trustees sometimes decide not to sell property that has little value because of the cost of doing so.  If that happens then the asset is given back to you.  If a trustee elects to administer an asset that is not exempt, the trustee may let you buy it back over a short time period.

The average Mississippi citizen does not have any property that is not protected so most Chapter 7 cases are no asset cases and there is nothing for the trustee to take and sell.

DEBTOR EDUCATION AND COUNSELING COURSES

Before any bankruptcy case can be filed each individual must complete a counseling course.  The course is called the pre-filing Credit Counseling course and costs from $9.99 -$25 and can be done by telephone or on the internet.  Upon finishing the course you will be issued a certificate of completion.  Your attorney must file this certificate with your bankruptcy petition.

After the bankruptcy case has been filed, each individual must complete a second course called the post-filing Debtor Education course which costs from $9.99 -$25 and can be done by telephone or on the internet.  You must file a signed statement declaring that you have completed the second courses before a discharge will be granted.

*Other Bankruptcy information available on the following site sub-pages:

Debt – it’s everyone’s problem

The Morality of Bankruptcy

Determining your financial situation

Equity and why it’s important

Other Legal Resources

Why you should not wait to file bankruptcy

Understanding Chapter 13

Understanding Chapter 7

Foreclosure Law in Mississippi

Garnishment Law in Mississippi

Repossession Law in Mississippi

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