While the bankruptcy filings in Mississippi have not skyrocketed like some other states, they still had over 14,000 in 2009, and their unemployment rate is 14th in the nation, making it likely that many more residents are facing this choice. It is important to understand the alternatives, consequences, requirements, and benefits before taking this serious step. While one’s credit rating is hurt by a bankruptcy, it is also hurt by late or missing debt payments. A bankruptcy attorney can advise a debtor of the best options for their situation and help them through the preparation and filing process.
Finding a Bankruptcy Attorney
It is important not to pick a lawyer randomly out of the phonebook, however. There are sources of information, not the least of which is the state bar association, to help investigate and find reliable candidates and then interview each to determine which one suits a debtor’s needs.
Bankruptcy Options
It can be confusing to scan the six bankruptcy options and determine which is appropriate for the debtor. However, there are generally two that fit most individuals and families:
- Chapter 13 is appropriate for those with property they want to protect from liquidation and enough disposable monthly income to pay smaller debt payments. After bankruptcy reorganization, they should be able to create a repayment plan they can complete in three to five years.
- Chapter 7 is better suited for those with few assets, if any. They have nothing to lose to liquidation, but they may have the majority of their consumer debt discharged, or erased.
Mississippi Exemptions
A small majority (54%) of Mississippi residents file for Chapter 7, but they have property exemptions available to them under state statutes to protect most of what property they own. While federal exemptions exist, they are not available to Mississippi residents. State exemptions include:
|
Homestead |
Up to $75,000 |
|
Personal Property |
Clothing, furniture, household items; motor vehicles; cash on hand; health aids; tangible personal property up to $10,000; state health savings plans; qualified education savings plans; personal injury judgments up to $10,000 |
|
Wages |
Income earned but unpaid for 30 days; after that time, either 75% of unpaid weekly earnings or 30 times the federal hourly minimum wage, whichever is greater |
|
Pensions |
Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000/person; police and firefighters; teachers; highway patrol; state employees; volunteer firefighters’ and law enforcement officers’ death benefits; private retirement benefits; ERISA-qualified benefits |
|
Public Benefits |
Social Security; assistance to blind, aged, & disabled; worker’s comp; unemployment; earned income tax credits and state/federal tax refunds up to $5,000 each; crime victims’ compensation |
|
Insurance |
Some types of life insurance proceeds; disability benefits; homeowners’ insurance proceeds up to $75,000 |
Filing the Petition
Once the filer has completed a required credit-counselling course, their attorney can file the bankruptcy petition. The judge then orders a stay on all debt collection, and a bankruptcy trustee administers the process. They hold a mandatory meeting with the filer, their attorney, and any creditors, so that the filer and their attorney can be questioned about the process. If all requirements are fulfilled and questions answered, the bankruptcy is granted and the filer is able to move on with a clean slate (Chapter 7) or manageable debt payments (Chapter 13).
