Mississippi Consumer Help Blog

Did You Get a 1099 From Your Mortgage Company?

Published on: February 27, 2012 | Frank Coxwell

If you filed had your home foreclosed or surrendered it in bankruptcy last year you will be receiving a 1099 from your mortgage company. Do not ignore this. Deal with it now, otherwise it will cause you problems in the future.

Here is what you need to do. There is a special tax relief available called the “Mortgage Forgiveness Relief Act of 2007“. This will forgive the debt and you will not owe any tax on the amount listed on the 1099 form. Make sure your tax preparer knows you suffered a foreclosure or filed bankruptcy. If you have already filed your tax return then you will need to file an amended return.

Why Do I have to list all my debts if I file bankruptcy?

Published on: February 10, 2012 | Frank Coxwell

Yes…but let me explain why you want to list everyone. The bankruptcy rules require you list all of your creditors so the court can get an accurate picture of your financial situation. Listing everyone you owe does not mean you will lose your house or car or other property. Listing everyone you owe does not mean all your debt will be wiped out. You want to have all your creditors listed so they get notice of the bankruptcy and they leave you alone while you take the time to decide who you want to pay and who you want to get rid of. You can always pay back the creditors you listed after the bankruptcy if you wish.

Leaving off a credit card because you want to continue to use the credit card is not a good idea and it won’t work anyway. Credit card companies and other creditors are constantly checking your credit reports in national databases and they will find out about the bankruptcy. They will cancel the card anyway, whether you owe a balance or not, no matter how good your payment record may have been.

Intentionally leaving a creditor off your bankruptcy papers may result in perjury or it may make the debt non-dischargeable and you will have to pay it. Let’s play it safe and list everyone. That way you are protected from them and you can always pay them later if you desire.

Will I Owe Taxes On My Debts After Filing Bankruptcy?

Published on: January 30, 2012 | Frank Coxwell

If you are a self-employed worker you will receive a 1099 for your wages instead of a W-2 form. But there is another type of 1099 that you may receive from one of your creditors. This is form 1099C. A 1099C form is used when all or a portion of a debt is canceled or forgiven by the creditor. If the amount exceeds $600.00 a creditor must report this debt forgiveness to the IRS. The IRS counts the forgiven or cancelled debt as income that must be reported on your tax return.

You should receive a copy of the 1099C form in the mail from your creditor(s) when they file the form with the IRS. You may not have gotten a copy. If not, the IRS will send you a notice stating you failed to include income on your tax return as a result of a creditor filing the 1099C form. Now you owe taxes, penalties and interest on the amount.

But wait, there are reasons why you may not have to pay taxes on this canceled debt. Here are some of the exceptions listed in IRS Publication 4681 that would relive you of the taxes, penalties and interest.

Training Family Law Attorneys

Published on: January 23, 2012 | Frank Coxwell

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.

Am I Going To Jail if I don’t pay the debt collector?

Published on: October 12, 2011 | Frank Coxwell

I have been flooded with inquiries from people in the Jackson, Pearl, Brandon, and Madison cities of the metropolitan area who have been scared to death by collection agencies. The caller usually claims to be a detective or some sort of officer and states that they are on their way to your house to take you into custody unless you pay your balance in full immediately. They state they must have the payment over the phone – no option to mail in a payment, etc. This is all a ruse to gain entry into your bank accounts.
People, listen up. YOU DO NOT GO TO JAIL FOR FAILURE TO PAY AN ORDINARY DEBT. Don’t be scared by these tactics. It’s simply lies to get you to hand over money. Do not give them any details about yourself. They may have some info about you and even the name of a company you owe, etc but even if you are indebted to the company, it is illegal for bill collectors and collection agencies to threaten you with possible arrest. You can go to jail for not paying child support or court fines but not for regular and ordinary debts.

Is Chapter 13 The Right Choice For You?

Published on: September 23, 2011 | Frank Coxwell

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.

Are you living paycheck to paycheck?

Published on: September 7, 2011 | Frank Coxwell

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!

Using Credit Cards Before Bankruptcy.

Published on: September 4, 2011 | Frank Coxwell

Within 90 Days of Filing Bankruptcy:

Luxury items charged to credit cards that total more than $550 within the 90 days of your bankruptcy filing are presumed to be non-dischargeable. Luxury items are defined as goods or services that are not reasonably necessary for the support or maintenance of your household. What does this really mean? Credit card charges made for food, gas, or diapers are not going to be a problem; but charges for a new stereo, a new HD TV, a ski trip, or summer vacation probably will.

Even though the law says that these charges are presumed to be non-dischargeable, the creditor would still have to file papers in your bankruptcy case to ask the court to declare the debt to be non-dischargeable.

Frank Coxwell interviewed by Kim Wade 103.9FM WYAB

Published on: August 30, 2011 | Frank Coxwell

I had the priviledge of being invited by Kim Wade to come for an interview on his show Aug 26, 2011. 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.htm

Frank Coxwell and Kim Wade

Foreclosure In Mississippi

Published on: June 28, 2011 | Frank Coxwell

Foreclosure is the process that a mortgage company takes to repossess and sell your home when you fall behind in the payments. In Mississippi, the mortgage company does not have to file a lawsuit against you and get an Order from the Court in order to sell your home. In Mississippi, the mortgage company does not have to send you a letter telling you they are foreclosing and when the sale will be. All they have to do is to run an ad in the newspaper and then auction your home.

When you fall behind on the mortgage, your mortgage company will typically send you a letter telling you that you have a thirty days or so to catch up before foreclosure proceedings start. This is called an acceleration letter. Once the mortgage has been accelerated, the mortgage company is no longer obligated to accept payments unless they are enough to catch up all of the past due amounts. But this won’t be just the number of months that you think you are behind. It will be all of the past due amounts they say you are behind, plus all of the fees and charges they have added on to your account, including foreclosure fees.

The lender must advertise the sale in the newspaper once a week for at least three weeks. At the end of the advertising period, usually the fourth week, the foreclosure auction sale takes place on the courthouse steps. Anyone can bid, including the mortgage company and the property goes to the highest bidder.