Bankruptcy Articles and Information

If you are buried in debt and feel like it will be impossible for you to ever dig your way out, filing for bankruptcy may the answer. The purpose of the law is to provide people who have fallen deeply in debt to have a fresh financial start in life. The reasons for needing to file for bankruptcy are not important.

There are different types of bankruptcy. The main ones used by individuals are Chapter 7 and Chapter 13. Each one serves a different purpose and has its own set of filing and discharge rules. No matter which chapter you use, on the day you file your bankruptcy petition, all debt collection by all creditors must immediately stop. A bankruptcy attorney will evaluate your financial situation and the type of debt you have and help you decide which bankruptcy chapter is the one that best meets your needs.

A common question that arises from clients is whether they can get their driver’s license back if it has been revoked after a car accident.  The topic of whether you can discharge debts related to a car accident bankruptcy has been previously discussed by Grant McNutt in his blog post from December 18, 2014.  He discussed that normally you can discharge debts arising from a car accident.  Some common reasons a driver may lose their driver’s license after a car accident would be because they did not have insurance and/or were unable to pay to repair the other person’s car. …Read   More

One of the hardest concepts for clients in bankruptcy to understand is “disposable income”.  Essentially, while you are in an active chapter 13, if you have money or come into money that can be paid to your creditors then that money should go to your creditors.  Specifically, the Bankruptcy Code defines disposable income as “[C] urrent monthly income received by the debtor” less domestic support obligations (i.e., child support, alimony), charitable contributions and money used to continue the operations of the debtor(s) business.  11 U.S.C. § 1325(b)(2) In interpreting the Bankruptcy Code, some districts, like the Southern District of Alabama,…Read   More

The annual contribution limit for 2016 is $18,000.00, which is unfortunately the same as it was for 2015.  This is the amount employees who participate in 401(k), 403(b), and most 457 plans can contribute.  Federal government employees who contribute to the Thrift Savings Plan (TSP) can contribute this amount as well. It seems the Treasury Department’s increases are set on a 2 year plan.  We saw an increase last year (2015) of $500.00 to the $18,000.00.  2013 and 2014 were in the amount of $17,500.00.  So if the trend continues, maybe next year we will have another increase in limits….Read   More

As an attorney who meets with clients in difficult financial situations every day, I can say with certainty that there is still a stigma associated with filing bankruptcy.  However, if you stop and think about it, I think you’ll realize that bankruptcy is a part of what makes America great. Bankruptcy is Part of the American Spirit Ours is a nation of risk-takers.  We value entrepreneurs, inventors, and everyone with the “can-do” attitude that is quintessentially American.  But where would that attitude be without bankruptcy?  How many risk-takers would we lose if there wasn’t a safety net in place?  If…Read   More

Recently, the City of Jackson, Mississippi settled a federal class action lawsuit that challenged the use of debtors’ prisons. The civil rights group Equal Justice Under Law and the Roderick and Solange Macarthur Justice Center of the University of Mississippi School of Law filed the lawsuit on behalf of seven plaintiffs. The previous system jailed people who were unable to pay court imposed fines and fees without assessing their ability to pay. Those people were credited a rate of $25 a day for general incarceration or $58 a day for work at the Hinds County Penal Farm. After the settlement,…Read   More

Many of our clients schedule an appointment with our office because they are struggling to save their home from foreclosure proceedings.  A bankruptcy filing stops foreclosures as long as they are filed PRIOR to the foreclosure date.  What then?  Many times, the reason the foreclosure is set is because the monthly payment requirement is more than a client can afford as a result of reduced income due to layoffs or loss of job altogether.  What options are available?  One option is the HAMP program. What is HAMP? HAMP stands for Home Affordable Modification Program.  This program was started to help…Read   More

On this past Tuesday, the Honorable Jason Woodard spoke in Columbus, Mississippi about what bankruptcy is and why it is necessary for some people in Mississippi. Judge Woodard is the Chief U. S. Bankruptcy Judge for the Northern District of Mississippi. While speaking to the Columbus Rotarians, he stated that there are some misconceptions about bankruptcy including the misconception that those who file a bankruptcy case are financially irresponsible. Local television station WTVA quoted Judge Woodard as saying, “A lot of times it’s driven by market forces, it’s driven by divorce or illness or a job loss.” Judge Woodard noted…Read   More

Before deciding if a debt can be discharged in a bankruptcy, it must be determined whether the debt is a type that can or cannot be discharged.  This sounds simple enough but when it comes to divorce and whether or not a debt is a domestic support obligation, it can be much more complicated. As previously discussed in Cynthia Lawson’s blog post of 3/1/2013, there are two types of debts owed to an ex-spouse 1) a domestic support obligation which is defined in 11 U.S.C. §101(14A) and 2) a property settlement obligation.  Domestic support obligations are not dischargeable in either…Read   More

Cancer and Bankruptcy

Posted on June 17th, 2016 by Amy Tanner

Cancer and Bankruptcy? Unfortunately, these two issues, one medical and one legal, many times go hand in hand. A recent report by Reuters Health citing a study conducted by Dr. Matthew Banegas at the Kaiser Permanente Center for Health Research in Portland, Oregon, found that  one third of cancer survivors ages 18-64 have gone into debt because of their cancer treatment incurring in excess of $10,000 of debt. This debt is caused, in part, by the rising costs of the medical care required to treat cancer.  Drug cost are the major financial burden for most cancer patients who are treated…Read   More

A Proof of Claim is the method a Creditor uses to get paid in a Bankruptcy.  Chapter 7 and Chapter 13 are the 2 main types of Bankruptcy for individuals or consumers. Creditors rarely file a Proof of Claim in a Chapter 7 (or straight Bankruptcy as it is sometimes called) because in most instances the Debtor’s assets fall within their Exemptions and thus there are no funds available to receive any payment.  A Chapter 7 is usually over in approximately 3 to 3 ½ months and every debt that you listed in your petition is wiped out or discharged…Read   More