Southhaven Legal Issues Blog

People in Mississippi who are struggling to pay off their debts might consider bankruptcy as an option to reduce or eliminate them. For most individual filers, there are two options when it comes to filing bankruptcy: Chapter 7 and Chapter 13. It is important to know the differences between the two options as one or the other may be better for the petitioner in a particular case.

Chapter 7 bankruptcy is sometimes referred to as liquidation bankruptcy because it involves the liquidation of the petitioner's assets in order to pay off as much debt as possible. At the conclusion of a successful Chapter 7 bankruptcy, any unsecured debts will be wiped out, and the petitioner may be able to keep important assets like a home, vehicle or tools used for work. In order to qualify under Chapter 7, the person must pass the means test, which begins with a comparison of the person's income to the state's median income. If the person's income is at or below the statewide median, he or she is free to file for Chapter 7. There are cases in which people with higher incomes may also be able to file for Chapter 7.

Studies show finances as a strong catalyst for divorce in today's society. For those in severe financial strains, bankruptcy may be a beneficial consideration.

However, both divorce and bankruptcy have specific protocols that can affect each other. It is important to understand the implications of bankruptcy during divorce.

Many women in Mississippi are struggling with costly credit card debt, even more than men in the state. Of course, people in general have accumulated significant debt associated with revolving consumer credit. According to one study, total credit card debt has hit its second-highest point following the financial crisis of 2008. In one quarter in 2018 alone, people accumulated another $30 billion in consumer debt. Still, women have shown more anxiety about their credit card balances than men. One study said that over one-fourth of women participants were not confident that they could pay off their cards compared to 14% of men.

One factor is the generally lower incomes that women have. Women have 80% of the median annual income of men, which means that women may have greater struggles in getting out of credit card debt. While the median salary for a woman is $41,554, the median for a man is $51,640. In addition, 20% of men said that they had only paid their credit card balances in full once or never in the last six months. Over 30% of women said the same, meaning that they are accumulating larger amounts of interest charges as a result.

All types of people in Mississippi might experience financial hardship and fall behind on paying their debts. When debt collectors start to contact these people, they might use harsh tactics that inspire fear. The Consumer Financial Protection Bureau reports that 25% of debtors have felt intimidated by collection agencies. Although debt is a serious matter, people have legal rights that potentially give them the ability to limit aggressive collection practices.

Being served with papers for a lawsuit from a debt collector ranks high on debtors' fears. Even when people feel helpless when confronted by lawsuits, they should never ignore them. They should supply their official answer to the court within the deadline stated in the lawsuit. When people fail to tell the court their side of the story, judges side with debt collectors. They issue judgments against debtors that could enable drastic actions like wage garnishment or asset seizure.