Today I had the privilege of being one of the guest speakers at the MS Family Law Update seminar in Jackson, Mississippi.  I educated the attending family law attorneys on the many ways that bankruptcy can effect the divorce, child support, and custody matters that they routinely address.  My  presentation covered methods the attorneys need to use to properly protect their clients settlement and support claims when a spouse files for bankruptcy and as well, how bankruptcy could in turn protect the spouse that owes the support and other obligations.  I emphasized that timing is critical and discussed the possible benefits to filing bankruptcy before the divorce proceedings.

 The most important thing is to save your home.

Frank Coxwell Radio Interview

I had the priviledge of being invited by Kim Wade to come for an interview on his show Aug 26, 2011.  You can hear the full interview (1 hr) by clicking the link above.  We discussed what has happened and is happening in the mortgage industry today and the multiple areas of  fraud being perpetrated on the American people - but more importantly we discussed how to fight back! If you’re not familiar with Kim Wade’s show – you’re missing a lot of great information.   I look forward to being back on the show to discuss this topic that both Kim and I are very passionate about soon!  Check out Kim’s blog as well – http://www.kimwadenoexcuses.com/index.html

F. Coxwell and Kim Wade

Despite everybody’s opinion that the economy is getting better, one thing is for sure – if you’re living from paycheck to paycheck, things are tough no  matter what they say.  If you suffer an illness, pay cut, or lose your job and  miss a week (or heaven forbid several weeks) of pay - you’re in a world of hurt! Roughly 42% of Americans report that they live this way, barely making ends meet.  What’s worse, more and more Americans are stealing from their future to live today – 21% of workers have stated they reduced their 401K contributions and/or personal savings in the last year and 34% say they aren’t contributing at all to such programs.  As an attorney who helps people solve debt problems, I see people making mistakes and doing things that actually make the situation worse than it has to be. They are too ashamed or afraid due to myth and rumor to discuss bankruptcy with an attorney so they first deplete their 401K, all other savings, borrow all they can from friends & family (which adds difficulty to others), and sell their possessions – all of which could have been prevented.  In most cases bankruptcy will protect your money and property.  Bankruptcy is not what it used to be.  Creditors spend millions of dollars to spread the propaganda that only bums and fraudsters file bankruptcy.   The truth is very different.  Bankruptcy is a very powerful consumer protection law and financial tool that it is an intricate part of our American economic system.  Our founding fathers took the idea of bankruptcy from the Bible and fashioned laws to give every American the right to a fresh start and a huge part of that fresh start is the protection of your money and property that will help you to begin that new life!

First of all, discuss your situation with a competent and knowledgeable bankruptcy attorney, preferably one who only represents consumers.  Do it before you do anything thing else, before you pay any creditors or relatives, before you give any property away, before you let the house go, before you take on new credit or sell any of your property.

There are numerous differences between a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy in Mississippi and many reasons to choose one over the other.   Here is a list of reasons why a Mississippi Chapter 13 Bankruptcy might be the best option for you:

A Chapter 13 will save a house from foreclosure.
A Chapter 7 case can be disputed by the US Trustee, but not Chapter 13.
The fees charged by your lawyer can be spread out in the plan rather than all paid before filing.
You can pay a tax debt or child support and alimony over 60 months.
More debts can be discharged in a 13, including some divorce payments and damages for malicious and willful acts.
You can dismiss the case at any time.
You can convert the 13 to a Chapter 7.
You can modify a plan if your income changes or you later decide to give up a house or a car.
You can sell your house or refinance it during the plan.
You cancel an unsecured second mortgage,
You can pay value only on any car you’ve had for more than 2.5 years.
You can challenge the fees and charges added to your mortgage.
Trustees want your case to succeed and will work with you to get it approved.
You can stretch out payments for vehicles and other secured debts.
You wont lose your non-exempt property.

This is not all of the advantages of filing a Chapter 13 in Mississippi but will give you an idea of why you may want to consult with an attorney even if you think a Chapter 7 is what you need.  If you are outside of our area, we can refer you to a competent bankruptcy attorney in your town.

There is a provision of the bankruptcy law that allows Mississippi homeowners to eliminate second mortgages.   Not widely known, this section of the bankruptcy code is becoming increasingly popular to bring the mortgage debt closer to the real value of the home.

Bankruptcy law prevents a homeowner from getting rid of the first mortgage if they want to keep the home, but the rules don’t apply to second mortgages.  The second mortgage can be stripped off (canceled)  if there is no equity to cover the debt, which is the case for thousands of Mississippi homes that are worth a lot less now.

The law has been in effect for years, but during the housing boom houses were worth much more and there was not much occasion to use it.  This is only available in Chapter 13 bankruptcy.

Individuals with excessive debt sometimes wonder whether it makes sense to file for bankruptcy.  There are many reasons why people who need financial help should file for Chapter 7 bankruptcy or Chapter 13 bankruptcy.  Making this decision is something you should discuss with a well informed Mississippi Bankruptcy attorney who is an authority in consumer bankruptcy.

Bankruptcy laws are there to help you get a fresh start and relieve you of the burden of overwhelming debt.

When Does Filing Bankruptcy Makes Sense.
There are a numerous circumstances in which filing for bankruptcy can benefit you:

1. You Have Already Tried to Negotiate.  If you have attempted to negotiate or work a repayment plan with your mortgage company or other creditors and they won’t listen to you.  They want all the money now and aren’t willing to be paid out over time. This can leave you with no option other than to file for bankruptcy.

2. Your Debts Exceed Your Income. A major reason why people file is they just can’t pay their bills.  This may be due to job loss, reduced hours at work, illness, divorce, and many other causes beyond their control.

3.  Your Mortgage Company is Trying to Take Your Home.  We are in the middle of a major mortgage fraud scandal involving robo-signers, fake documents, false affidavits and bogus assignments. Mortgage servicers make more money now when they foreclose than they do taking your regular monthly payments.  One sure way to get control over your mortgage servicer is to file bankruptcy and sue the servicer and owner of your note in the bankruptcy proceeding.

4.  Your Credit Score is Already Bad.  Filing bankruptcy can improve your credit score.  Most of our bankruptcy clients are back to a credit score in the 700′s within one to two years of a Chapter 7 discharge.

5. You Want to Keep Your Home and Vehicles.  Many people are concerned that they will lose everything if they file for bankruptcy. However, getting rid of your unsecured debts like credit cards, loans and medical bills will leave you with the money you need to be able to keep the important things like the house and car.

Before you make any decision on bankruptcy, consult an attorney skilled in consumer bankruptcy and mortgage problems.  Every individual’s situation is different and what might be right for someone else may not be right for you.  Speaking with an attorney ahead of time can help you do some pre-bankruptcy financial planning so you don’t run the risk of losing certain rights and/or property.  Hiring an attorney that only represents individuals, because of his or her knowledge and experience in consumer bankruptcy, is well worth the money.

It used to be that filing bankruptcy in Mississippi carried with it a bad social stigma.  Not anymore.  Did you know that Toni Braxton has filed bankruptcy twice.  She stated in an interview that “bankruptcy for me was a protection”.  She used bankruptcy to protect herself from all the creditors that came after her when she canceled her Las Vegas show due to illness.

People who really need to file bankruptcy in Mississippi to stop foreclosure or stop wage garnishment still hear persistent myths that are either half-truths or completely false.  The goal of bankruptcy is to help you out of difficult financial problems.

Here is a short run-down of some of the top false myths about bankruptcy.

1. You Can’t File for Bankruptcy Anymore
Not true.  There were changes to the law in 2005, but the end result was to put more of a burden on bankruptcy attorneys.  Bankruptcy is alive and well and an important financial tool.

2. Your Credit Will Be Ruined
Not true.  Bankruptcy does have an impact on your credit history – but in most cases that impact can improve your credit score.

3. You Will Lose Everything
Not true.  Mississippi bankruptcy law allows you to keep a certain amount of property, along with your house and cars.  This is true in Chapter 7 and Chapter 13.  No one wants you to start over again with nothing.

4. You Will Lose Your Retirement
Not true.  File bankruptcy in Mississippi and your retirement account, 401(k) plans and IRAs are exempt and fully protected, no matter how much you have in the account.

5. You Can Only File Bankruptcy One Time
There are limits on how many times you can get a discharge in bankruptcy, but you can file more than once.  A Chapter 7 discharge is available every eight years.  Chapter 13 discharge is  available every two years or four years from a Chapter 7 discharge.  A Chapter 13 can be started in between these time periods and you will not be granted a discharge, yet you will still have all of the protection of a Chapter 13.

Bankruptcy law is complex and you should seek legal advice before selling or disposing of property if you are in a financial bind.  The ultimate goal of bankruptcy in Mississippi is to help those who are in financial crises.  We offer free consultation to individuals and couples who are concerned about financial problems, foreclosure, wage garnishment, and mortgage fraud.

There are many types of bankruptcy, but only two types that most Mississippi residents would be interested in.  Chapter 13 is what people refer to as bill consolidation, debt relief plan and bill repayment plan.

Where a Chapter 7 wipes out or discharges your debts without any payment, a Chapter 13 proposes a plan to repay your creditors over set period of time.   The repayment plan can help you save your house by catching up the mortgage payments and paying off your vehicles at a lower monthly payment.

The unsecured creditors, such as credit cards and medical bills can be paid anything ranging from zero to a percentage of what you owe.  The payment plan must be at least 36 months and no more than 60 months and this length is based on upon your ability to pay.

The court will have the reduced monthly payment deducted from your paycheck to make sure you don’t get
behind again.   This is sometimes called the wage earner plan.   Just about any source of income can be used to fund your monthly plan.

Chapter 13 bankruptcy is ideal for a family trying to stop foreclosure and keep their home or when they need to lower the monthly car and truck notes along with other secured debts.  An individual or married couple can file Chapter 13.

If you have questions about bankruptcy in Mississippi, or are considering filing a Chapter 13 Bankruptcy, give me a call at 601.948.1600.