Many people across Mississippi struggle to support themselves and their families financially, and if you count yourself among them, you may be sorting through your options and trying to figure out if a bankruptcy filing might give you the fresh start you desire. While, in many cases, filing for bankruptcy can be a great way to get your affairs in order so you can start to dig your way out of debt, your credit will most definitely take a hit after doing so.
When to file for bankruptcy
Bankruptcy may be an option for Mississippi residents who have been overwhelmed by substantial debt. However, filing for bankruptcy can have a long-term impact on their credit. Before filing, they should consider several factors to decide whether it is the best option for them.
Two-thirds of all U.S. bankruptcies related to medical bills
Mississippi residents who have had health emergencies likely can appreciate that medical bills are a factor in approximately two-thirds of all bankruptcy filings across the country. A study that contained this information was published in the American Journal of Public Health on Feb. 6.
Bankruptcy offers protection from foreclosure
People in Mississippi who have fallen behind on their mortgage payments face the possibility of foreclosure. While some lenders are open to loan modifications or short sales to satisfy the debt, many are not. Many lenders will begin foreclosure proceedings, which can end with the lender taking possession of the house and selling it at auction. The proceeds of the auction are then used to pay down the mortgage as well as the legal costs associated with foreclosure.
Second bankruptcy possible but waiting periods apply
Bankruptcy law recognizes that debts might overwhelm Mississippi consumers. When individuals file for bankruptcy protection, they generally do so under either Chapter 7 or Chapter 13. The form of bankruptcy determines whether eligible debts will be discharged or if the person must continue to pay creditors under a court-mandated payment plan. The chapter under which people file also establishes waiting periods before they can file for bankruptcy again.
