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.
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.
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.
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.
Bankruptcy and alternative options
If you are struggling with overwhelming debt, you may be wondering what options you have. Bankruptcy is often a viable choice for people who have no other way to free themselves from their debt obligations. Bankruptcy can provide a much needed fresh financial start in order to begin financial rebuilding.
Student loans could become easier to discharge
Generally speaking, those who have student loan debt in Mississippi and any other state are unlikely to have it discharged in bankruptcy. However, recent trends have seen bankruptcy judges reduce the amounts that debtors are asked to repay. Furthermore, lenders themselves have been increasingly open to the idea of settling student loan debt for less than the full balance owed. Judges may be more sympathetic to student loan debtors because they see the impact it has on their own children.
