Additional Bankruptcy Info

In these trying times, more and more people are finding themselves unemployed and seriously behind on their bills. My first suggestion is to talk with your creditors, including banks, to see if they will grant you a deferment on your debt. Some banks and even large lending institutions are granting extensions due to the present pandemic. Even if there was not an eminent crisis in the country, some banks will grant you additional time.

If that does not work, you have the option of bankruptcy. If you have not filed bankruptcy in the last eight (8) years, you can file a Chapter 7 bankruptcy which is a liquidation in which you are allowed to keep certain items which are considered exemptions. A bankruptcy under Chapter 7 requires that you reaffirm with the creditor any debt that you intend to keep such as a mortgage or car loan. Chapter 7s are most beneficial when you have large, outstanding debts for medical bills, car wrecks or substantial credit card debt. Chapter 7s are not as helpful when you are simply behind on a mortgage or car loan and wish to keep the house/car. The exemptions by Mississippi law which are applicable to any Mississippi resident filing bankruptcy are as follows:

  • Tangible personal property of the following kinds selected by the debtor, not exceeding Ten Thousand Dollars ($10,000.00) in cumulative value: (i) Household goods, wearing apparel, books, animals or crops; (ii) Motor vehicles; (iii) Implements, professional books or tools of the trade; (iv) Cash on hand; (v) Professionally prescribed health aids; (vi) Any items of tangible personal property worth less than Two Hundred Dollars ($200.00) each. Household goods, as used in this paragraph (a), means clothing, furniture, appliances, one (1) radio and one (1) television, one (1) firearm, one (1) lawn mower, linens, china, crockery, kitchenware, and personal effects (including wedding rings) of the debtor and his dependents; however, works of art, electronic entertainment equipment (except one (1) television and one (1) radio), jewelry (other than wedding rings), and items acquired as antiques are not included within the scope of the term "household goods."
  • The proceeds of insurance on property, real and personal, exempt from execution or attachment, and the proceeds of the sale of such property.
  • Income from disability insurance.
  • All property in this state, real, personal and mixed, for the satisfaction of a judgment or claim in favor of another state or political subdivision of another state for failure to pay that state's or that political subdivision's income tax on benefits received from a pension or other retirement plan. "pension or other retirement plan" includes: (i) An annuity, pension, or profit-sharing or stock bonus or similar plan established to provide retirement benefits for an officer or employee of a public or private employer or for a self-employed individual; (ii) An annuity, pension, or military retirement pay plan or other retirement plan administered by the United States; and (iii) An individual retirement account.
  • One (1) mobile home, trailer, manufactured housing, or similar type dwelling owned and occupied as the primary residence by the debtor, not exceeding a value of Thirty Thousand Dollars ($30,000.00); in determining this value, existing encumbrances on the dwelling, including taxes and all other liens, shall first be deducted from the actual value of the dwelling.
  • Assets held in, or monies payable to the participant or beneficiary from, whether vested or not, (i) a pension, profit-sharing, stock bonus or similar plan or contract established to provide retirement benefits for the participant or beneficiary and qualified under Section 401(a), 403(a), or 403(b) of the Internal Revenue Code (or corresponding provisions of any successor law), including a retirement plan for self-employed individuals qualified under one (1) of such enumerated sections, (ii) an eligible deferred compensation plan described in Section 457(b) of the Internal Revenue Code (or corresponding provisions of any successor law), or (iii) an individual retirement account or an individual retirement annuity within the meaning of Section 408 of the Internal Revenue Code (or corresponding provisions of any successor law), including a simplified employee pension plan.
  • Monies paid into or, to the extent payments out are applied to tuition or other qualified higher education expenses at eligible educational institutions, as defined in Section 529 of the Internal Revenue Code or corresponding provisions of any successor law, monies paid out of the assets of and the income from any validly existing qualified tuition program authorized under Section 529 of the Internal Revenue Code or corresponding provisions of any successor law, including, but not limited to, the Mississippi Prepaid Affordable College Tuition (MPACT) Program established under Sections 37-155-1 through 37-155-27 and the Mississippi Affordable College Savings (MACS) Program established under Sections 37-155-101 through 37-155-125.
  • The assets of a health savings account, including any interest accrued thereon, established pursuant to a health savings account program as provided in the Health Savings Accounts Act.
  • In addition to all other exemptions listed, there shall be an additional exemption of property having a value of Fifty Thousand Dollars ($50,000.00) of whatever type, whether real, personal or mixed, tangible or intangible, including deposits of money, available to any Mississippi resident who is seventy (70) years of age or older.
  • An amount not to exceed Five Thousand Dollars ($5,000.00) of earned income tax credit proceeds.
  • An amount not to exceed Five Thousand Dollars ($5,000.00) of federal tax refund proceeds.
  • An amount not to exceed Five Thousand Dollars ($5,000.00) of state tax refund proceeds.
  • Subject to the provisions of Section 27-7-1003(2), the assets of a catastrophe savings account, including any interest accrued thereon, established under Sections 27-7-1001 through 27-7-1007.

Chapter 13 bankruptcy for someone that has a regular income sufficient to pay regular plan payments into the trustee for a specific period of time (36 to 60 months). In the plan, if you are delinquent on your mortgage or car payment, these debts are incorporated into the plan and the arrearages are spread out over the life of the plan. Delinquent taxes, both state and federal, can also be included in the plan. There are also certain other advantages to a Chapter 13 plan in which you sometimes can discharge certain marital obligations created in a separation agreement with the exception of child support or alimony. In a Chapter 13 you normally pay a percentage of your income depending on your disposable income to your unsecured creditors.

Some individuals make too much money to qualify for a Chapter 7 bankruptcy and they are required to file a Chapter 13 bankruptcy.

The bankruptcy code has been in existence for a long time and the bankruptcy law is a part of the United States code. It was set up for those individuals that due to unexpected circumstances get into serious debt. Some time it is due to abuse of credit but most of the time it is due to unexpected circumstances such as job loss, high medical bills, high credit card bills, medical bills not covered by insurance, judgment rendered as a result of an uninsured accident or other circumstances. Sometimes individuals just get behind on their payments.

We are the Gene Barton Law Firm are familiar with handling Chapter 13 bankruptcies and are familiar with how to develop a plan which will be approved by the court and which will save your house/car if you get behind.

Please call us at our office for additional information regarding Chapter 7 or Chapter 13 Bankruptcy.