Mississippi Consumer Help Blog

Are Debt Collectors Calling You?

Published on: September 12, 2015 | Frank Coxwell

If you are getting debt collection calls you are not alone. About one in seven people in Mississippi is being hounded by a debt collector. Buying debt and debt collection is a billion dollar business and becoming a larger, more complex industry. The original creditor sells their debt to a debt collector, and often they sell the same debt multiple times meaning that multiple debt collection companies are attempting to collect the same debt! Debt collectors often attempt to collect from the wrong person, overstate or inflate the amount owed by adding collection fees, and even attempt to collect debts that are not real (may have been paid in the past or was never a debt to begin with).
Along with these abuses, details of the original debt are lost or outdated. Creditors selling debt are basically selling lists that have contact information and amounts owed – and little more than that in way of details. Collectors then may have a mixture of valid debts, debts that have been since settled, or debts that are past the statute of limitations and can no longer be collected. It’s not clear exactly how many consumers are wrongly harassed for accounts that are not their debt. Debts purchased by the large debt-buying firms have no documents, contracts or other proof of the debt. Your debt will be sold to a debt collector for pennies on the dollar. It’s not just the original credit that sells debt. Debt collection companies then may sell the lists they have purchased to other debt collectors, who may then sell it to another, then another, and another. It’s not uncommon for people to all of a sudden be receiving debt collection calls and letters about something that happened years ago but now, the debt has shown up on a list that has been sold to another company, and here we go again. Continue Reading ›

What If Debt Collectors Are Calling Me?

Published on: September 11, 2015 | Frank Coxwell

First realize that you do not have to talk with the debt collectors when they call. They are not calling because they care about your situation or want to discuss your financial problems in order to help you find a solution. They want a payment, or a promise to pay, and unless you are able to give one of these things to them, there is no reason to talk. If you had the money, you would have already paid them, and if you had the money coming in, you would have already made arrangements (a promise) to pay. They know this so they call, and call, and call, and call – thinking that the more they harass you, belittle you, etc – the more likely you are to figure out a way to pay them – they don’t care about you being able to figure out an overall solution, just that you meet their immediate demand regardless of the cost to you. Who gets fed? Usually it’s the loudest chirping bird. Debt collectors don’t care if all you have is the money to pay your house note – they want to be paid and the house note not getting the money is your problem. You don’t have to talk to people like this.
Keep in mind that a debt collector is required to mail you what’s called a “validation” notice within five days of first contacting you. This notice must include and lay out the amount they claim owe, the name of the creditor that they claim you owe, and what to do if you think you don’t owe this money. You then have 30 days to dispute this debt and it’s claims. You also have the right to notify them that you do not want them to call or contact you anymore. It is best that you do this in writing and send it by certified mail so you have proof of your notification to them to stop contacting you, should they continue to call. Click here to read more about stopping debt collectors from calling.

Which set of bankruptcy exemptions can I use?

Published on: September 11, 2015 | Frank Coxwell

Bankruptcy exemptions are offered at the State and Federal level. The bankruptcy exemptions determine whether or not your property is protected (exempt) and if not exempt, how much you might have to pay to creditors in order to keep it. For example, if your household goods are valued at a total of $8,000 and the applicable exemption is $10,000, you would be able to keep (protect) all household goods. But, if the value of your household goods are $15,000 and the exemption is only $10,000, you would need to possibly pay unsecured creditors the difference of $5,000, surrender a portion of your household goods, or take other steps that are available.

This is all an important part of bankruptcy pre-planning. Taking a look at all your assets, establishing proper values according to how the bankruptcy courts value property, and then comparing to exemptions to determine if anything is at risk and if so, what are the options at that point. Mississippi offers great exemptions to it’s residents.

So, how do you know what bankruptcy exemptions you can use? In Mississippi, you must be a resident of this State to use Mississippi bankruptcy exemptions. If you are not a resident, you have the option of using Federal exemptions (just moved to Mississippi, filing bankruptcy in Mississippi – your prior state won’t allow you to use their exemptions, so Federal exemptions are your only choice). Each State determines the rules under what is allowed – whether you can use their exemptions, other States, or Federal, and if so, under what circumstances. In Mississippi, you cannot choose to use Federal exemptions over Mississippi exemptions if you are a Mississippi resident. You must then utilize Mississippi exemptions.

Ever watched the show “Are you smarter than a 5th grader?”

Published on: September 10, 2015 | Frank Coxwell

Today I had the privilege of somewhat playing that game in the 3rd grade class of Mrs. Elizabeth Rogers at Northside Elementary in Pearl, MS! I was invited to come and speak to them about being a lawyer (how to become one, what do they do, etc) and also field any questions they had on the law in general. They have been studying the Bill of Rights and the Constitution in school. They had great questions! Kids that age of course will also ask the funniest things! I was asked if lawyers have lawyers, if lawyers can go to jail too or can you get yourself out of trouble, how much money do you make, do lawyers make the laws, and it was just a great time. They wanted to know all about going to court, the judge, going to jail…How old do you have to be to be and/or do certain things…Several car accident questions…They were little sponges just wanting to soak in all the details.

The show “Are you smarter than a 5th grader?” is set up differently than what we did today (my wife and I love that show), but it was fun to be under the gun to answer any question that popped into their mind. I am very appreciative of the opportunity and look forward to doing this again!

Beware of swapping obligations with your former spouse.

Published on: August 25, 2015 | Frank Coxwell

Beware of swapping your domestic obligations with your former spouse. Substituting debts or replacing property that was originally the former spouse’s obligation or asset can bring about unforeseen consequences.

Example: The former wife was awarded the marital home, and the former husband was required to pay the mortgage until satisfied. His business began to falter and he could not continue paying the mortgage. In order to assist him, the former wife agreed to let him use the home as collateral for a new loan, which both parties signed. In the former husband’s bankruptcy case, his obligation to the former wife was discharged (wiped out) because the new loan constituted a new debt that was not covered by or arising out of the parties’ marital dissolution agreement or divorce decree. So the former wife’s choices are now to remain responsible for the debts of which the home is collateral or to discuss filing her own bankruptcy.

Please consult with a bankruptcy attorney to discuss options to do to deal with debts that are overtaking you for whatever reason. And especially – never, never, never put your home up for collateral to deal with other debts without consulting with a bankruptcy attorney first. It may seem backwards but there is nobody better to consult with on how to deal with debt (and to try to avoid bankruptcy) than a bankruptcy attorney. Seeking advice early is the key. In the above example, a lot of heart ache, a home, and possibly even a business could have been spared if this advice had been followed.

What happens if my ex lets the house foreclose? Am I responsible?

Published on: August 24, 2015 | Frank Coxwell

It is common in a divorce proceeding that involves a marital home and/or vehicles that a property settlement agreement or final judgment obligating one spouse to pay the mortgage or vehicle note will be a part of the divorce decree. This will constitute a non-dischargeable (can’t be wiped out in a bankruptcy) obligation. BUT, what if, as so often happens, that obligated former spouse fails to pay the debt, the home is foreclosed, or the vehicle repossessed and a deficiency judgment is entered on the balance remaining owed to the mortgage company or the creditor that financed the vehicle?

Example: The wife was awarded the marital home. The divorce decree required her to refinance within two years of the divorce, but it was silent as to who (wife or husband) was responsible for paying the current mortgage. The wife failed to pay the mortgage, the house foreclosed, and a deficiency judgment was entered against the wife AND the husband. The wife filed a bankruptcy to wipe out this debt. He filed a motion requesting an order of non-dischargeability of the wife’s purported obligation to pay the mortgage and deficiency judgment. In other words, he tried to block her ability to wipe this debt out in her bankruptcy – make it “non-dischargeable”. He lost because the divorce decree was silent as to who should bear the burden of any deficiency that may arise as the result of a foreclosure sale of the parties’ former residence. So he then would have the choice to pay the deficiency or file bankruptcy himself to wipe out this debt.

Regardless of which side you may be on in such a scenario, it is key to have your bankruptcy attorney review the wording of your divorce decree to advise you on what can / cannot be wiped out in a bankruptcy filing. And if you are reading this and have not yet finalized your divorce agreements, it is key to always have stated who will be responsible for the current/future note or mortgage, as well as who should bear the burden of a deficiency judgment resulting from any foreclosure or repossession in your divorce decree.

Will bankruptcy stop the division of retirement plans in a divorce?

Published on: August 16, 2015 | Frank Coxwell

No. Spendthrift trusts, IRA accounts, 401K plans, and ERISA qualified retirement plans are not property of a bankruptcy estate. If an asset is not property of the estate, the debtor does not have to claim it as exempt to protect it from the claims of creditors; it is by definition beyond the reach of bankruptcy creditors and the trustee. The bankruptcy filing and the automatic stay would have no impact on the division or settlement of these types of accounts in a divorce proceeding.

Does Bankruptcy Court trump Family Court?

Published on: August 15, 2015 | Frank Coxwell

Bankruptcy court authority in the domestic relations arena is limited and very narrow. Bankruptcy courts cannot grant divorces, decide custody or award support. Bankruptcy courts have the authority by statute to decide two things:

whether an obligation is in the nature of alimony, support or maintenance, regardless of how it is labeled
whether a debt is a non-dischargeable property settlement obligation or not, again, regardless of how it is labeled

What is considered property of the bankruptcy estate?

Published on: August 14, 2015 | Frank Coxwell

The bankruptcy code defines “property” very broadly. If you are considering filing a bankruptcy, it is important for you to know what all is considered property of the “bankruptcy estate” and whether or not it is covered fully by the allowable bankruptcy “exemptions”. Even the property that is “exempt” is property of the estate until the exemption claims are final (generally 30 days after the bankruptcy 341 meeting).

Property includes all of your legal and equitable interests. For chapter 13 cases filed in Mississippi, all of the debtor’s property, including acquired property and income necessary to fund a chapter 13 repayment plan is considered property of the estate during the entire chapter 13 case.

So what are some examples of property other than the obvious assets such as house, car, clothes, etc? The right to file and settle a lawsuit; stock Continue Reading ›

Will I lose my house in a Chapter 7 bankruptcy?

Published on: August 13, 2015 | Frank Coxwell

Not unless you would like to! It is understandable to be concerned about your home when thinking about filing bankruptcy to deal with other debt concerns. As long as you are current on your payments, the mortgage company cannot and will not foreclose. They will send out a Reaffirmation Agreement (and more than likely offer you a loan modification as well). The Reaffirmation Agreement is a document where you “sign back up” for your home loan either with the same loan/note details or possibly better if a loan modification is offered.

We also need to check and see if the equity in your home is over the Mississippi exemption or not. If it is not over, your home is fully protected. If it is over, depending upon how much, there will be options to discuss.For example, your home is worth $100,000. You owe $90,000. Your equity is $10,000. This easily falls under the Mississippi exemption ($75,000). But if your home is worth $100,000 and is paid off, then you are over the Mississippi exemption by $25,000 and we would need to discuss options prior to filing your bankruptcy case. It doesn’t mean that you cannot file, it simply means we have some things to take a stronger look at and discuss first.

Exemptions are protections for your property given to you by Mississippi Law. Exemptions are not the same in every state. These protections allow you to keep the stuff that you already have, so you don’t have to start all over again with nothing.