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Filing for bankruptcy may improve financial position

For many people in Mississippi who are struggling to pay down debts, filing for bankruptcy is a viable option to improve their financial position. During the peak of the recent financial downturn, almost 1.6 million bankruptcies were filed. The majority of those filings were made by consumers. The total number of annual filings dropped to under 800,000 by the time ten years had passed. People who have credit card debt may be able to get a fresh start via bankruptcy.

Rights of debtors facing lawsuits from debt collectors

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.

The role of student loan debt in bankruptcy filings

People in Mississippi who are struggling with debt may be among the nearly one-third of people who filed for Chapter 7 bankruptcy with student loan debt. This was one finding in a study by LendEDU. The same study also found that among that group, on average, almost half of their total debt constitutes student loans. These figures do not include people who filed for Chapter 13 bankruptcy, which involves creating a payment plan.

Credit card delinquencies on the rise among younger borrowers

Young people in Mississippi and around the country are finding it increasingly difficult to manage their revolving debt according to the New York Federal Reserve's most recent Quarterly Report on Household Debt and Credit. The report reveals that more than 8% of the credit card balances owed by Americans between 18 and 29 years of age are 90 days or longer past due. This is the highest rate of delinquency since 2011 when the economy was still recovering from the Great Recession.

Understanding the consequences of Chapter 7 bankruptcy

Lots of Mississippi residents are facing an ever-growing amount of debt. As credit card bills, auto loans, personal loans and medical bills start to mount, it can be difficult to find a way to pay everything back. This is especially true for those who have had a significant change in financial circumstances due to job loss, divorce or other factors. Personal bankruptcy can be an important method for eliminating debts and moving forward toward a new financial future.

Medical issues most common reason for bankruptcy filings

Readers in Mississippi who are struggling to pay down debts might turn to bankruptcy protection for help. Increasingly, people are filing Chapter 7 or Chapter 13 bankruptcy due to medical debts. According to a study by academic researchers, 66.5% of bankruptcy filings occurred for medical reasons. The filers either could not afford to pay high medical bills, or they missed work for medical issues. Approximately 530,000 families file for bankruptcy annually because of medical expenses, illness or injury, according to the research.

Lawmakers propose bill to discharge student loans in bankruptcy

For many people in Mississippi, student loans have offered a pathway to future career success. Excessive student loan debts, however, have proven burdensome for many people in recent years. Nationwide, outstanding student loan balances will likely hit $2 trillion by 2020. Delinquency or outright default afflicts over one-quarter of student loan borrowers today. Due to the inescapability of these debts, a group of lawmakers has proposed the Student Borrower Bankruptcy Relief Act of 2019.

CFPB seeks to change rule about debt collector contact

If a proposed rule by the Consumer Financial Protection Bureau takes effect, debtors in Mississippi and elsewhere may be hearing a lot less from creditors. The rule would amend the Fair Debt Collection Practices Act to limit debt collectors to seven phone calls to a debtor per week. Debt collectors would also be required to send a written notice containing information about a debt balance and how to dispute it.

How bankruptcy affects credit scores

Mississippi residents who are coping difficult financial situations are often reluctant to pursue debt relief because they are worried about what a bankruptcy will do to their credit ratings. While a Chapter 13 bankruptcy will appear on credit reports for seven years and a Chapter 7 bankruptcy will show up for 10 years, how they actually affect borrowing is more influenced by the actions taken after a bankruptcy has been discharged.

Bankruptcy reform proposals highlight student loan debt

Many Mississippi residents are struggling under piles of insurmountable debt. The sources of these debts may include everything from credit cards and auto loans to medical bills and student loans. While many of these debts can be discharged through personal bankruptcy, people struggling with significant student loan debt have faced particular difficulties. In the past, the bankruptcy code was amended on multiple occasions to make it harder for borrowers to find relief from their student loans. At the same time, the cost of university has gone up dramatically, leaving Americans with $1.5 trillion in student loan payments.

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