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Jackson Mississippi Bankruptcy Law Blog

Reviewing the bankruptcy credit counseling requirement

To you, bankruptcy may seem like a fairly "cut-and-dry" process: you file, disclose your debts, and then have them discharged. You likely thought that at no point would you be told that you had to go through credit counseling. Many in Jackson have come to us here at the Pond Law Firm with the same question that you now have: "Why do I need to do this?" Such confusion makes sense; after all, should it not be assumed that if you are filing for bankruptcy, you have already determined that you are not in a position to settle your debts on your own? 

You might think that passing the means test was the only criteria for qualifying to file a Chapter 7 bankruptcy. Yet according to information shared by the U.S. Federal Judiciary, you must also complete credit counseling at least 180 days prior to filing. During your credit counseling sessions, your service provider may provide you with a debt repayment plan. Keep in mind that plan does not take into account you filing for bankruptcy, but rather shows how you might be able to repay your financial liabilities on your own. You are under no legal obligation to follow this plan, yet you do have to submit it to the court. 

Calculation error led to numerous foreclosures

Homeowners in Mississippi who are struggling to stay current with their mortgage payments can understandably be concerned about the potential prospect of losing their homes if they cannot find a solution to their financial challenges. One option that has helped some people over the years is a home loan modification. This involves working with the bank lender to negotiate new terms such as a lower monthly payment and maybe even a reduction in fees so that owners are able to make their monthly payments.

For many homeowners who endured the hard years during and after the recession, a loan modification may have been sought. For those people with mortgages held by Wells Fargo, however, this effort may have not helped them but actually hurt them.

Understanding the bankruptcy means test

As a resident of Michigan or Illinois who finds yourself facing an increasingly overwhelming amount of debt, you may be weighing your options and trying to determine the best and most effective way of rebuilding your financial affairs. At Pond Law Firm, we understand that, for some people, filing for bankruptcy can streamline the process of rebuilding your finances and getting your life back on track, and we have helped many clients facing similar circumstances take steps to start the process.

Most consumer bankruptcies fall into one of two categories: Chapter 7 bankruptcies and Chapter 13 bankruptcies. Ultimately, per Nerdwallet, whether you will be able to move forward with a Chapter 7 bankruptcy will depend on whether you meet the eligibility requirements outlined by the bankruptcy means test. Just what is the means test, and how does it work?

Who is most burdened by medical debt?

The healthcare costs in this country are a constant topic of conversation. They seem to be rising at alarming rates with no end in sight. For this reason, many people in Mississippi are stuck with large amounts of medical debt. However, what group seems to be most affected may be surprising to you.

According to STAT, it is the middle class who suffers from the most medical debt. This group is more likely to be uninsured or underinsured and not have the extra funds to pay off debt. It does not help that Mississippi has the highest medical debt in the country or that it has one of the highest rates of adults who do not have adequate insurance, which contributes to debt.

Chapter 7 bankruptcy can wipe the slate clean

Bankruptcy can be a scary concept for debtors in Mississippi. We at Pond Law Firm know that many people are afraid to file for bankruptcy for fear of losing everything or looking like a failure in the eyes of others. However, bankruptcy laws are there for your benefit. Bankruptcy is not a failure but an opportunity to wipe the slate clean and start over. 

If you are facing lawsuits, harassed by creditors or having your wages garnished, Chapter 7 bankruptcy may be a solution. Filing Chapter 7 bankruptcy allows you to eliminate medical debt, credit card bills and other forms of unsecured debt. Chapter 7 wipes the slate clean by allowing for the immediate discharge of your debt. 

Can you prevent foreclosure?

When you lose your job in Mississippi, you may wonder if you will lose your home because you can no longer pay the mortgage. It is important to take action as soon as you become unemployed so you can examine all of your options.

Sometimes you may feel tempted to ignore the mortgage while you search for another job. According to Go Banking Rates, you should typically speak to your lender once you realize you will not be able to make the payments on your home. It is a good idea to write a letter that explains the situation and informs the lender that you are seeking new employment. This demonstrates to lenders that you are trying to be a responsible homeowner. If you take these steps, you may be able to develop a temporary payment plan that lasts until you have a new job. Additionally, it is a good idea to look over your insurance policy. Some policies include mortgage protection insurance and this can usually cover your property taxes and mortgage payments.

Can your car get repossessed right out of the garage?

You're behind on your car payments, and it's significant. It's not as if you missed one month because you forgot or fell behind on other bills. Your financial situation is not that stable, you have a lot of other debt and you have not paid your car payment in a while. You can't even remember exactly when you sent in that last payment.

Your debt could come from different directions. Maybe you lost your job at an inopportune time and you burned through your savings quickly. Maybe a medical emergency put you in massive debt that you really had no way to avoid. Maybe you started a business and then had it fail, putting your financial future in jeopardy.

Options to reduce credit card costs

Many people in Mississippi who find themselves with increasing levels of credit card debt may often wonder how in the world they can eventually make their debt decline instead of continue to grow. Even when making payments every month, interest rates, annual card fees or late fees can counteract their best efforts to get out of debt. Bank rate suggests that there is one relatively simple thing people might try to help.

A 2017 survey found that 69 percent of consumers were able to have their credit card interest rates reduced by simply picking up the phone, calling their credit card servicers and asking for this rate reduction. Making this request should be done within reason, however. For example, if a person's current interest rate is 25 percent, they should not expect to receive a reduction to five percent. They should also do their homework to be educated about current rates.

The price of medical care: What you should know

You may think that if you went to the emergency room in Mississippi seeking treatment for a broken leg that your expenses would be comparable to if you were seek medical help for the same injury in Arizona. Interestingly enough, medical expenses vary from state to state, depending on what type of service you are seeking. Research from the National Chartbook on Health Care Prices looked at payment data and medical claims to determine where states fall when it comes to pricing medical services. For example, a pregnancy ultrasound in Arizona is much cheaper than in Alaska, which costs over three times the national average. Mississippi is above the national average when it comes to medical costs.

The place where the procedure is performed can also affect the cost. For instance, if a knee surgery is performed in an outpatient clinic, it is less expensive than if they were to have the surgery in a hospital.

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