Mississippi Consumer Help Blog

Will I lose my car in a Chapter 7 bankruptcy?

Published on: August 13, 2014 | Frank Coxwell

Not unless you want to! It is unusual for someone to lose a car or any other property that they do not want to lose in a bankruptcy case. It’s common for people to file bankruptcy in order to get rid of a vehicle. They lose it because they want to lose it. The payments may be too high or the vehicle is simply not worth keeping due to the current condition and/or when comparing the current condition to the amount still owed on that vehicle. For example, your car is worth $5,000 but you owe $10,000 because of interest, high mileage, and/or other current issues with the vehicle that has decimated the value.

But if you want to keep your vehicle and other debts are the issue needing to be addressed, as long as you are current on your car payments, the finance company will not repossess your car as a result of filing bankruptcy. The creditor (finance company) will send you a Reaffirmation Agreement that outlines your current loan (amount owed/monthly note amount, etc) and you will sign the Reaffirmation Agreement to keep the vehicle. It goes through the bankruptcy untouched.

The finance company wants you to keep the vehicle and pay for it. They really don’t want it back – that’s why many people end up filing a chapter 7 bankruptcy to force them to take the vehicle back and to wipe out the responsibility of any further debt related to that vehicle.

Can I Report My Mortgage Payments to the Credit Bureau?

Published on: July 9, 2014 | Frank Coxwell

The bankruptcy code does not require that you reaffirm, or sign an agreement to continue to be personally responsible for the payments on your mortgage. As long as you continue to pay the house notes they cannot foreclose. However, most mortgage companies will not report your payments to the credit bureaus if you did not sign a reaffirmation agreement. So it is important to know that it is still possible to get your payments included on your credit reports.

Request a payment history from your mortgage company. (The mortgage company is required by law to provide one every year free of charge.)
Send a letter to the three credit bureaus – TransUnion, Equifax, and Experian, and dispute the fact that your mortgage payments do not show up or that you have not paid your mortgage payments and attach a copy of the payment history you obtained from the mortgage company.

Can I Get Credit After Bankruptcy?

Published on: July 8, 2014 | Frank Coxwell

Can you get credit after filing bankruptcy? Absolutely. Will you have to wait for ten years to get a house or a car? Absolutely not.

Credit card companies will pack your mailbox with offers of credit. They want you back in the system using credit cards and carrying a large balance. It’s a temptation that few can resist. These cards and offers will be from lenders that will charge high interest rates. The same goes for cars and trucks. There are numerous companies that will be glad to give you credit. For a while, the question will be about how much interest they will charge you for that credit, which will be high until you’ve regained your footing.

Now, you shouldn’t run out and start charging up credit bills again, but if you need a vehicle or furniture and appliances you will be able to get credit. National creditors see people who file bankruptcy as a good credit risk since all their debts were wiped out, they can’t file Chapter 7 again for eight years and they have money to spend. Many Mississippi bankruptcy filers are able to reestablish their credit within one year of their bankruptcy discharge.

Will My Bankruptcy Affect My Spouse’s Credit Report?

Published on: July 7, 2014 | Frank Coxwell

Mississippi is not a community property state and in most cases, a husband and wife are not responsible for each other’s debts. There are some exceptions, but they usually would only come up in a divorce or action between the husband and wife, not in a situation between the husband or wife and a creditor. A bankruptcy filed by one spouse should not affect the credit of the other spouse because that spouse did not file bankruptcy. The spouse’s name and Social Security number would not be listed on the bankruptcy papers of the other.

If there are joint credit cards or other joint debts then the spouse that did not file would still owe the debts. Otherwise, if the debt is just in the name of the spouse filing for bankruptcy, creditors would not even know the other spouse exists.

Bankruptcy law allows a married couple to file together, but they are not required to do so. Either husband or wife can file by themselves, or not file, or even file two different types of bankruptcy at the same time. Your spouse may not need to file bankruptcy at all or one spouse may need to file a chapter 7 and the other may need to file a chapter 13. You are allowed to file a bankruptcy by yourself and wipe out the debts you can discharge. You have several options!

Three Questions to Ask About Filing Bankruptcy Together

Published on: June 26, 2014 | Frank Coxwell

Your Debts, My Debts and Our Debts.

Married and struggling with money problems? Thinking about filing bankruptcy? You know married couples can file bankruptcy together, they do it all the time. In most cases it’s better for them if they do. But, what if your spouse doesn’t want to file or has very little debt? Did you know you can file by yourself? There are many situations that arise when it makes more sense for just one of you to file by yourself. In some cases, you both need to file, but you each may need to file a different type of bankruptcy.

Question 1. “What debt are we trying to get rid of?”

What About My 401K, My IRA, and My Retirement?

Published on: February 12, 2014 | Frank Coxwell

Many people believe they will lose their retirement money if they file for bankruptcy. This is not true. Many clients meet with me and state that they “cashed out their retirement and are ready to file bankruptcy.” This is not necessary. Retirement accounts and pension plans are fully protected in bankruptcy. There are federal and Mississippi laws that protect your retirement money when you file bankruptcy. This includes accounts like 401(k), IRA, Roth IRA, SEP, 403(b), Keoghs, profit-sharing plans, and defined-benefit plans. Any ERISA Qualified Retirement Account is protected. In most cases, every penny you have in your retirement account is fully protected, regardless of the amount. But traditional IRAs and Roth IRAs are only protected up to a total amount of about $1.2 million.

Even if your retirement account is not ERISA-qualified, it will still be protected in bankruptcy by both federal and state law. Any retirement account that is exempt from taxation under the Internal Revenue Code is also fully protected by other federal laws. Leave your retirement money alone. Let it work for you over the long term and don’t worry about losing it if you need to file bankruptcy.

What Should I Do About My Checking and Savings Accounts?

Published on: February 11, 2014 | Frank Coxwell

If you are considering filing bankruptcy, you need to think about your savings and checking accounts.

There are a couple of important reasons to change credit unions or banks before you file bankruptcy:

First of all, many banks will freeze accounts that have your name on them as soon as you file bankruptcy. The banks say they are protecting assets for the bankruptcy court, but the bankruptcy court did not ask the banks to do this. If you are considering bankruptcy, avoid banking with Wells Fargo, Wachovia, Bank of America, Union Bank and any financial institution which has made it a policy to freeze accounts.

Help for Student Loans

Published on: January 25, 2014 | Frank Coxwell

If you are having trouble paying back your student loan debt, the Department of Education has options that will give you more protection from debt collectors collecting on federal education loans. These regulations should make it easier for you to get your federal student loans out of default.

These rules do not apply to private student loans, only to loans made or guaranteed by the federal government. For example, if you are in default you can”rehabilitate” loans by making nine “reasonable and affordable” on-time payments during a period of 10 consecutive months. You must agree in writing to make these 9 voluntary payments (as determined by your loan holder) within 20 days of the due date. This will allow you to get out of default and become eligible for further federal student aid or other repayment programs. Keep in mind that Student Loan Rehabilitation is a 1-time opportunity only. It cannot be repeated.

Some private debt collectors who were collecting on federal loans fail to offer payments that borrowers can afford; instead offering payments based on a percentage of the borrower’s total debt. Such payments mean increased commissions for the collection agencies, but are unworkable for borrowers. Some debt collectors try to also demand minimum monthly payments without telling people about the more affordable alternatives, even though the laws of federal student aid does not require those minimum payments. In 2014, the Department of Education really cracked down on these practices.

Have You Been Denied A Bank Account?

Published on: July 31, 2013 | Frank Coxwell

TransUnion, Equifax and Experian are the three credit bureaus that everyone is familiar with. Did you know that there are also credit bureaus for checks? If you bounced a check or used an overdraft on your checking account, you are in their database. All of the major banks regularly report information to these check bureaus; the largest of which are ChexSystems and Early Warning. Once a bank sees your information from the check bureau it is up to the bank to decide what to do with it. Every bank has a policy that will determine if they say yes or no to opening a checking account for you.

Millions of working people have been black listed because of past mistakes of thirty or forty dollars, even after paying the check amount, interest and fees. A checking account is a necessity today. Most employers and all government benefits require direct deposit. If you have a checking account, try to imagine what it would be like driving around and paying all of your utilities and household expenses in person at the end of the month. The fees you would pay to cash your check, get money orders and wiring money could eat up a substantial portion of your pay.

If you have been denied a checking account at one of the big banks, try one of the smaller banks or a credit union. They are more interested in getting new customers and do not subscribe to the check bureaus. They may not have all the convenient locations, but with direct deposit and a debit card you may never need to visit the actual bank again.

Can I Pay And Keep My Credit Cards After I File Bankruptcy?

Published on: July 30, 2013 | Frank Coxwell

Can you pay your credit cards after filing bankruptcy? Of course. You can pay anyone you want to pay. But should you? Let’s explore whether first of all you can keep them, and second if you have anything to gain by paying debts that were wiped out by the bankruptcy court…

Can you keep your credit cards after filing bankruptcy? You should know that your credit cards will be canceled by the creditor once you file bankruptcy. Even if you want to keep them and continue to pay, they will be canceled. Credit card companies are constantly checking your credit reports and the moment they see the bankruptcy they will cancel the card. This is a surprise to many people who thought that by not listing one or two cards in their bankruptcy, they could keep using them. No company is going to let you keep a credit card. They all want you to reaffirm the debt and pay it off, but they will not extend the current credit privileges, even if you agree to pay what is owed. Now after filing bankruptcy, you may get flooded with new offers for credit cards (some offers may even be from the same companies!) but they will not allow the current account to remain open.

Why? Once a debt is discharged in bankruptcy, the creditor can’t have any contact with you. No letters, no phone calls, no law suits, no efforts to collect, and no reports to the credit bureau. You can sue them if they violate these rules. So if you repay the debt, the creditor can’t and won’t report it on your credit record. They will take the money, but you won’t any recognition or credit for paying it.