Mississippi Consumer Help Blog

What can a Chapter 13 bankruptcy do for me?

Published on: January 30, 2015 | Frank Coxwell

A Chapter 13 bankruptcy will work wonders on your debts and help to place you in control of the creditors. Chapter 13’s help manage your debt obligations for a period of 3-5 yrs by a repayment plan. You work with your bankruptcy attorney to submit a plan on restructuring your debt; making it easier for you to pay. In addition, the Chapter 13 Plan addresses whether or not you pay anything towards unsecured debts. Depending on your situation and desire, you could pay anywhere from 0% to 100%. Debts and bills overpowering you are now under control and reduced to an affordable amount. This is an option available to you that offers a lot of benefits and puts you in the driver’s seat.

There are many benefits and advantages of filing a Chapter 13 in MS. Here are a few:

If you have become behind on your mortgage payments, you can get caught up on the missed payments and stop the foreclosure.

How long do I have to wait to file bankruptcy again?

Published on: January 29, 2015 | Frank Coxwell

As long as a bankruptcy court has not barred you from filing, you can file bankruptcy again pretty much right away. However, you may not be eligible to receive a discharge. There would be no point to filing a Chapter 7 unless you are eligible for a discharge, but there may be reason to file a Chapter 13 whether you are eligible or not. A discharge means that the bankruptcy court releases you from qualified debts. Your bankruptcy case has gone through and been completed – ie: discharge received.

Let’s assume you want to file another bankruptcy and need to be eligible for a discharge. This table shows the time period that would need to be met in order to be eligible for a discharge in your new case:

If you filed bankruptcy not that long ago and have not hit the time period for you to be eligible to file again, you could discuss with your attorney the benefits of filing a Chapter 13 bankruptcy with a waiver of discharge. This would put you under the protection of the court, allow you to stop any garnishments, repossessions, foreclosures, etc, and pay your debts under a Chapter 13 Plan.

Do I qualify to file for bankruptcy?

Published on: October 12, 2014 | Frank Coxwell

One of the first questions that comes to mind when you are considering options is “Do I qualify to file for bankruptcy?” Let’s look at the eligibility requirements for the two most common types of bankruptcy, a chapter 7 and a chapter 13.

Am I eligible to file a Chapter 7? If you are an individual or a married couple who want to file Chapter 7, your lawyer will review your financial situation to determine if you qualify. Even if you are married, you can still file by yourself. Your spouse does not have to file bankruptcy with you. Your bankruptcy lawyer will use your family financial information to take a test for you called the “Means Test”. This test is designed to keep people with very high incomes from filing Chapter 7 because they have “the means” to pay their debt. Even people with very high income can pass the test if all of their expenses and debts and allowable deductions are taken into consideration. There are exceptions to even taking the means test. If your income is below the established threshold, you are not even required to complete the means test but are immediately qualified to file a Chapter 7 case. If your debts are business related rather than consumer related, this can also be an immediate qualification. The means test is complicated, but I am an experienced bankruptcy attorney who will make sure you get all of the allowances and exclusions on the test that apply to you. If you pass the means test or if you are exempt from taking the means test, then you can file a Chapter 7 case.

Am I eligible to file a Chapter 13? There are two main requirements for a Chapter 13 case. You must have money coming in each month from a job, or Social Security, or something. Then your debts must be under a certain amount. If you add up all your secured debts, like the mortgage, vehicle loans, and furniture notes, the total needs to be under approximately $1.1 million for secured debt. If you then add up what you owe on all your other debts, like credit cards, student loans, taxes, and medical bills you need to be under $383,175.00. (These numbers are current as of April 2013 and go up every 3 years.)

How does bankruptcy affect my credit?

Published on: October 8, 2014 | Frank Coxwell

How does bankruptcy affect my credit? Bankruptcy has a negative impact on your credit, but it’s the road to credit recovery, not a death sentence to your credit. Think for a moment – if you are already behind on payments and debts – your credit couldn’t get much worse than it is now. Bankruptcy improves your credit by getting rid of all the debt that is keeping you down. Your debt to income ratio is hurting you as much as the late payments and no payments. Most people will find their credit will recover within 1 year of filing a Chapter 7 bankruptcy. Believe it or not, you’ll get credit card offers flooding your mailbox right after you file bankruptcy. You could also go out and buy a car right after you file bankruptcy, but you wouldn’t be happy with the interest rate they put on the loan.

Bankruptcy doesn’t affect your ability to get credit as much as it affects the cost of your credit. I have a credit instruction package I give to my clients that gives step by step directions for getting your credit score where it should be, where you can qualify for the better interest rates. So if you’re wondering “Will I ever get credit again?”, YES, you can have good credit again and a lot sooner than you think.

The secret Debt Management companies don’t tell you

Published on: October 6, 2014 | Frank Coxwell

Whether you are doing a debt consolidation, debt management, debt settlement, credit counseling, or bankruptcy, all negatively affect your credit. The secret they don’t want you to know: your credit will suffer if you are not paying creditors exactly like you agreed or exactly like they want. Debt consolidation, debt management, debt settlement, and credit counseling companies want you to pay them a fee in addition to what you pay on your debts. These payments are NOT improving your credit and in many cases the payment won’t cover the interest on the debt.

Bankruptcy can get you back on track to good credit faster and cheaper than any of the other options. Don’t sacrifice your financial future by using your savings or cashing out 401k’s and retirement accounts in an effort to stay afloat. Right now, you need to do what is best for you and your family. Things aren’t like they used to be. Your credit will recover after bankruptcy.

How are unsecured debts treated in Chapter 7 bankruptcy?

Published on: October 5, 2014 | Frank Coxwell

Most unsecured debts will be wiped out in a Chapter 7 bankruptcy. Unsecured means that the debt does not have any property pledged as security. This includes credit cards, medical bills, lines of credit, payday loans, overdraft protection, signature loans, and personal loans. There are certain types of unsecured debts that cannot be eliminated in bankruptcy. The two most common types of debt that people think cannot be done away with are student loans and taxes. These can be wiped out, but only if you meet special circumstances. Student loans are not wiped out in bankruptcy, unless you can prove that paying them would create an undue financial hardship for you or your family. Income tax debts can be eliminated, under certain circumstances, if they are more than 3 years old before the date you file the bankruptcy.

How are secured debts treated in Chapter 7 bankruptcy?

Published on: October 4, 2014 | Frank Coxwell

Secured debts are debts that have some sort of property pledged as security. When you get a loan to buy a car or a house, you take out a secured loan. The car or the house is the security or collateral for the loan. Secured debts can either be wiped out in a Chapter 7 bankruptcy or not – you have a choice with secured debts. You can keep the car, house, or property and continue to pay the debt or you can give the property up and walk away, owing nothing.

A secured loan creates two obligations for the loan. The first obligation is the security interest that allows the lender to repossess or foreclose the property if you stop making payments. The second obligation is your obligation to pay the loan. If the car is repossessed or the house is foreclosed, the loan company can come after you for the money you still owe on the loan. This is known as the deficiency balance. Chapter 7 bankruptcy eliminates your personal obligation to pay the loan and if the property is repossessed or foreclosed, the company cannot come after you for the deficiency. If you choose to continue paying and retain the car, house, etc – the creditor provides what is called a Reaffirmation Agreement.

What are secured creditors and unsecured creditors?

Published on: October 3, 2014 | Frank Coxwell

Secured creditors are creditors that have some type of property (ie. security) or collateral for the loan you owe. They have a lien on your property, which is an interest in property that allows a creditor to repossess that property if you don’t pay. Your mortgage company has your house as security for the mortgage loan. The auto finance company has your vehicle as security for the auto loan. The local finance company may have some of your furniture and household goods as security for the money they loaned you. These are all secured creditors.

Unsecured creditors are creditors who you owe money to, but they do not have the right to repossess anything if you don’t pay them. Credit cards, medical bills, signature loans, payday loans are some examples of unsecured debts.

What is the Automatic Stay?

Published on: October 2, 2014 | Frank Coxwell

As soon as you file bankruptcy, an “Automatic Stay” goes into effect and stops all collection activity against you. This happens automatically the second your bankruptcy is filed. All creditors must stop trying to collect from you. They must stop doing anything to get money from you; this includes making calls, sending letters, and filing lawsuits. An automatic stay will also stop foreclosures, repossessions and sales of property from moving forward. Now, if you don’t pay your house notes the mortgage company would have the right to start the foreclosure up again after your bankruptcy case is finished.

There are some important exceptions to the automatic stay. It may not give you protection from some types of domestic support actions and it will not protect you from criminal charges made against you.

The automatic stay is temporary for secured creditors. They must get permission from the court before taking any action. Bankruptcy does not allow you to keep property that is security for a loan without making payments on the loan. You don’t get anything for free. If you don’t pay, a secured creditor may get court permission to seize and sell the property.

I need to file bankruptcy, but what if I’m married?

Published on: September 30, 2014 | Frank Coxwell

Commonly asked questions of married individuals needing to file bankruptcy:

Do married couples have to file bankruptcy together? If you are married there are three options for filing bankruptcy: 1) file together, 2) file alone, or 3) both file separately. There are several factors to consider when deciding if you should file jointly or alone. The biggest factors being how are the debts split between you, how much does each of you make, and who owns the property.

What about joint and co-signed debts? When a debt is joint or co-signed, both spouses owe 100% of the debt. It makes no difference what name comes first or who the debt was actually for. If your name is on the bill, you owe the whole thing. If you file joint tax returns then you both owe the tax debt.