Those drowning in debt do have an option: chapter 7 bankruptcy. While not a pleasant option, it can be a helpful one, as many types of consumer debt can be erased as a result. In addition, there are some types of personal property, which are exempt under Mississippi state laws, allowing the debtor to retain that property, up to a specific exemption amount. While in some states filers have the option of applying federal or state exemptions, Mississippi requires that residents use only their own state exemptions.
Some types of personal debt cannot be erased through bankruptcy, including spousal and child support, tax debts, and some types of student loans. However, married couples filing jointly can double their exemptions when filing chapter 7 bankruptcy. Careful attention must be paid to the chapter 7 bankruptcy rules, otherwise filers could lose their exemptions and, in turn, their property.
How to Keep Your Car
State and federal exemptions differ in this area:
- Federal exemption - $3,225
- Mississippi state exemption - the filer can only claim a total exemption of $10,000 for all personal tangible property, including automobiles
Even if a Mississippi resident claims a vehicle under their personal property exemption, if they still have an auto loan with the vehicle as security, they must keep up the payments or the loan holder may still have the option to repossess the vehicle.
How to Keep Your Home
- Federal homestead exemption - $20,200
- Mississippi state exemption - $75,000 for property that is owned and occupied
- Those over 60 and married or widowed may claim a former residence as their exempt property
- Exempt property cannot include more than 160 acres
- Proceeds of property sales are exempt
- Mobile homes do not qualify for homestead exemption unless the land is also owned
A homestead exemption, however, does not guarantee that a filer can keep the home in the long run. If a lien remains on the property, the homeowner must continue making payments or the lender may still have the right to foreclose.
In addition, Mississippi allows exemptions for other forms of personal property:
- A total of personal property up to $10,000
- Personal injury judgments up to $10,000
- Mobile homes – up to $20,000
- Personal property worth less than $200, kitchenware, furniture, dishes, appliances, household goods, 1 TV, 1 radio, 1 lawnmower, 1 firearm, clothing, wedding rings, motor vehicles, tools of the trade, crops, health aides, books and domestic animals
- Personal property does not include works of art, electronic equipment, jewelry, or antiques
Schedule C of Your Bankruptcy Petition
When filing a chapter 7 bankruptcy, filers must be certain they complete schedule C to ensure they receive all the exemptions on property to which they are entitled. This form requires them to enter the following information for each exemption, according to Mississippi state laws:
- Type of property
- State statute allowing that exemption
- The value of the property exemption
- The current value of the property (the assessed, not the market, value)
Getting Legal Help
There are many protections for honest consumers who have fallen on difficult financial times. However, there are also specific legal requirements that must be met in order to gain the most protection through this process. If all the steps are not followed correctly and completely, exemptions can be denied. It can be vital to have a knowledgeable bankruptcy lawyer to help filers meet those requirements and find debt relief.
