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Bankruptcies among elderly population rising rapidly

Researchers have identified a startling new trend in bankruptcy filings. They have gone up significantly for elderly people in Mississippi and nationwide. Since 1991, the number of filings from people over the age of 65 went up by 480 percent by 2016. When looking at the filings from people over 75, the increase during that period approached 1,000 percent.

Insufficient income and medical expenses represent the primary forces overwhelming older people and retirees. Drawing upon survey data collected by the Consumer Bankruptcy Project, researchers found that almost 70 percent of elderly bankruptcy filers cited job loss, income decline or inadequate retirement savings as the cause of their financial troubles. Medical bills or problems interfering with work came in a close second with 62 percent of people responding that health care issues motivated their filings. Some people experienced a financial hardship because of changing eligibility for Social Security and the shift away from pensions to 401(k) savings plans.

Consumer debt is creeping up on many households

A cautionary tale is being given to consumers after some in the financial world are looking backward to 2008. Those in Mississippi and elsewhere in the country may want to pay heed to the warning.

During the housing and financial crisis of 2008 and the subsequent recession many not only had a larger housing debt than practical, but consumer debt was also higher than ideal. With the recession, nearly 10 percent of credit cards had at least one missed payment.

How to recognize debt settlement scams

If you, like so many others, have found that overwhelming debt has become a fixture in your life, you may be exploring your options and trying to figure out how to get your finances back under your control. People in your circumstances often feel hopeless, but the good news is, there are a variety of options that may meet your needs. Regrettably, however, some companies tend to prey on those struggling with seemingly insurmountable debt, and they do not always engage in ethical tactics when doing so.

For example, if you are facing massive amounts of, say, credit card debt, you may start receiving offers from so-called debt settlement agencies that attest that they can resolve your debts for only a small fraction of what you owe. Sounds great, right? Keep in mind, however, that, as with many things in life, if something seems too good to be true, it just well might be.

Finding debt relief with Chapter 13 bankruptcy

Many people in Mississippi feel like they are drowning under the weight of credit card bills, medical expenses and other forms of debt. When the pressure of debt becomes too great to bear, people can look for options to find relief and forge a path to a new financial future. Personal bankruptcy, including Chapter 13 bankruptcy, is one such option that can allow a person to keep their property and pay back their creditors over a set period with a court-approved repayment plan.

In general, if the monthly income of the person filing for bankruptcy exceeds the state's median income, he or she must pay back the debt over a five-year period. On the other hand, if his or her income is equal to or less than the state's median income, the debt can be addressed with a three-year repayment plan. At the end of the repayment period, debtors can find significant relief or eradication of the bills that have overwhelmed their lives.

Should I apply for a home loan modification?

When you are experiencing financial difficulties, you would do almost anything to keep from losing your home. The thought of foreclosure is enough to cause chronic stress and fear in any Mississippi resident. Fortunately, you have options that may allow you to keep your home and make your debt more manageable, such as Chapter 13 bankruptcy. You may also have been advised to apply for a loan modification, but you might hesitate before you learn more about this option.

U.S. News & World Report explains that there are positive and negative aspects to getting a mortgage modification. The immediate benefit to a modification is that the lender lowers your payments, which can help your mortgage payments fit nicely into your monthly expenses. However, the numerous downsides to a loan modification can include the following:

  • A loan modification can significantly raise your interest rate and add years to the length of your repayment schedule.
  • The lender may mislead you on the terms of your loan and other options that could better fit your situation.
  • The lender may tell you that it will forgive a portion of your loan with the modification, only to add the “forgiven” amount to the end of the loan without your knowledge.
  • A loan modification can involve lots of paperwork, hassle and time.
  • Scammers posing as legitimate lenders often target people desperate for help, and they may ask for up-front processing fees, which are illegal.

How do I dispute a debt that isn’t mine?

Like many Mississippi residents, you have some debt. It can be challenging enough taking care of your usual bills every month. The last thing you need is another debt added to the pile. However, one day you get a collection notice in the mail for a debt you don’t recognize. You are sure you didn’t make this purchase, so why are you receiving a bill for it? Even worse, why are you being taken to collections for it?

This is, unfortunately, not an uncommon scenario. Countless people receive bills for unfamiliar purchases, which can spark uncertainty and panic when they start receiving collection notices or harassing phone calls. Can you get this debt taken off your record? Will it affect your credit score? How can you get the harassment to stop?

Student loans could become easier to discharge

At the end of March 2018, there was a total of $1.4 trillion in student loan debt, according to the New York Fed. Across America, there are 44 million people - many of whom live in Mississippi - who have student loan debt, and it is highly unlikely that it can be discharged according to current bankruptcy laws. However, there is support for new rules that may make it easier to get rid of this type of an obligation in a bankruptcy proceeding.

Under proposed legislation, the definition of undue hardship would be broadened. To have student loan debt discharged, the borrower must show that being required to make payments would constitute an undue hardship. The Department of Education has asked for public comment about this issue as it believes that current rules are discouraging some debtors from filing for bankruptcy. There is no set definition of what an undue hardship is, which means that criteria are applied on a case-by-case basis.

Automatic stay in bankruptcy halts creditor collection efforts

When people in Mississippi file for bankruptcy, the court issues an automatic stay that prohibits creditors from continuing to seek payment. Although issues like multiple bankruptcy filings could interfere with the immediate issuance of an automatic stay, the court order typically becomes effective as soon as debtors file their bankruptcy paperwork and lasts until the discharge of debts. Creditors might initially violate the stay in the first couple of weeks after a filing because they have not yet processed the notice about a bankruptcy. Unless evidence shows that creditors willfully violated a stay, they will likely avoid legal consequences unless they persist with collection efforts.

Since debtors could expect to receive letters and telephone calls right away a bankruptcy filing, they should be ready to provide their case number and bankruptcy court information. Debtors should keep records of contact with creditors so that they can show that they provided notice to creditors about the stay. The court also mails official notices to all creditors, and attorneys can alert creditors to the stay for their clients as well.

The myth of building credit by carrying a balance

Some Mississippi consumers may be paying more than they have to in credit card interest rates because of a prevalent myth. Many people believe that carrying a balance is a way to build credit, but financial experts say this is not the case.

A report from Creditcards.com found that more than one-fifth of cardholders carried a balance as a way to build their credit. However, this is not one of the criteria used to determine a credit score. In fact, carrying a balance can hurt a person's credit if the balance is creeping up toward the card's limit.

How a bankruptcy filing can actually improve your finances

When many people think about the prospect of filing for bankruptcy, one of their primary concerns may be how the filing will affect their financial future. There are many tales of bankruptcy causing financial ruin and the difficulty of rebuilding a solid financial foundation.

Many of the stories that circulate about bankruptcy ruining your finances are actually not based in fact. The truth is that a bankruptcy filing may actually be the most positive step you can make, depending on your particular situation. 

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