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Bankruptcy: Mississippi

Filing bankruptcy in Mississippi not only gives honest debtors an opportunity to recover from debt, but also repays creditors to the extent that a debtor’s property value or earnings permit. 13,934 bankruptcies were filed in Mississippi in 2010, ranking Mississippi 24th in the country for the number of bankruptcy filings per capita. 55% of Mississippi’s bankruptcy petitions in 2010 sought protection under Chapter 7 bankruptcy.

Filing Bankruptcy in Mississippi

Federal law governs bankruptcy proceedings in Mississippi, and as such all bankruptcy cases are filed in the US Bankruptcy Courts located in:

  • Mississippi Northern District Court: Aberdeen, Greenville, Oxford
  • Mississippi Southern District Court: Biloxi, Gulfport, Hattiesburg, Jackson, Meriden, Natchez, Vicksburg

Although the federal courts have exclusive jurisdiction over bankruptcy proceedings, Mississippi law prohibits petitioners from using the exemptions listed in the U.S. bankruptcy code in favor of the exemptions provided under Mississippi law. With the guidance of a bankruptcy attorney Mississippi petitioners can gain a full understanding of what personal property they are permitted to keep in bankruptcy and what must be sold.

Chapter 7 Bankruptcy, Mississippi

Chapter 7 bankruptcies in Mississippi are the most common bankruptcy filing.  Chapter 7 is suitable for petitioners who do not possess major assets such as investments or much equity in a home, for the reason that a Bankruptcy Trustee may liquidate personal property that is not protected by Mississippi’s bankruptcy exemptions. Liquidation occurs when a court-appointed Trustee converts personal assets to cash to distribute among creditors. Mississippi’s Chapter 7 bankruptcy law allows petitioners to keep some essential property and such exempt assets are unavailable to creditors seeking repayment.

The vast majority of Chapter 7 cases are “no-asset” cases where no property is taken.

Mississippi Bankruptcy Exemptions

Mississippi bankruptcy law assigns defined property exemptions permitting debtors to keep specific personal property and assets so bankruptcy proceedings do not leave them washed up.  In real terms, this means creditors cannot force debtors to sell the shirt off their back to settle outstanding debts.  Bankruptcy in Mississippi lets petitioners choose exemptions from the state list, exclusively.

Due to changing exemption values, individuals or couples entering bankruptcy proceedings should first visit a Mississippi bankruptcy attorney to learn which exemptions are applicable to their current financial situation.  Mississippi bankruptcy exemptions include:

Mississippi Homestead Exemption

  • $75,000 total: Property you own and occupy; if over 60 and married or widowed may claim a former residence; property cannot exceed 160 acres; sale proceeds exempt
  • Mobile home does not qualify as homestead unless you own land on which it is located

Mississippi Tenancy by Entirety Exemption

  • Tenancy by the entirety has been recognized by Mississippi state courts. Consequently, such interests may also be exempt. Status unknown.

Mississippi Personal Property Exemption

  • $5,000 total: Federal tax refund
  • $5,000 total: State Tax Refund
  • $30,000 total: Mobile home
  • $10,000 total: Tangible personal property, any items worth less than $200 each; clothing, wedding rings, motor vehicles, tools of the trade, books, crops, health aids, domestic animals, kitchenware, dishes, household goods, appliances, furniture, 1 radio and 1 TV, 1 firearm, 1 lawnmower (not including works of art, antiques, jewelry or electronic entertainment equipment)
  • $10,000 total: Personal injury judgments
  • Sale or insurance proceeds for exempt property
  • State health savings accounts
  • Tax-qualified education savings plans, including those under the prepaid Mississippi Prepaid Affordable College Tuition (MPACT) Program

Mississippi Wage Garnishment Exemption

  • Earned but unpaid wages owed for 30 days; after 30 days, 75% of earned but unpaid weekly disposable earnings, or 30 times the federal hourly minimum wage, whichever is greater (low-income debtors may be authorized for more)

Mississippi Public Benefits Exemption

  • Social Security
  • Assistance to aged, blind and to disabled
  • Workers’ and Unemployment compensation
  • Crime victims’ compensation

Mississippi Insurance Exemption

  • $75,000 total: Homeowners’ insurance proceeds
  • Disability benefits
  • Fraternal benefit society benefits
  • Life insurance proceeds if clause prohibits proceeds from being used to pay beneficiary’s creditors

Mississippi Pensions and Retirement Savings Exemption

  • $5,000 total: Earned income tax credit
  • Firefighters, Volunteer firefighters, Police officers, Law enforcement officers, Highway patrol officers (includes death benefits)
  • State employees and Teachers
  • Public employees retirement and disability benefits
  • Tax-deferred private retirement benefits
  • Qualified state health saving accounts
  • ERISA-qualified benefits, IRAs, Keoghs deposited over 1 year prior to filing bankruptcy

Mississippi Wild Card Exemption

  • $50,000 total: Any property, real, personal or mixed, tangible or intangible, including deposits of money, available to any Mississippi resident who is 70 years of age or older.

Chapter 13 Bankruptcy, Mississippi

In 2010, 45% of petitioners filed for protection under Chapter 13 bankruptcy in Mississippi.  Filing Chapter 13 bankruptcy in Mississippi initiates a financial restructuring process where a court-appointed Trustee manages the petitioner’s finances to develop and implement a 3-5 year repayment plan, using the debtor’s future earnings to repay creditors.  Chapter 13 petitioners in Mississippi keep most – or all – of their property.

How to File Bankruptcy in Mississippi

Eligibility for property exemptions should be a major factor when deciding if bankruptcy protection is a feasible solution to one’s financial problems. The ideal resolution will include protecting major assets and discharging major debts.  Because personal bankruptcy cases are distinctly challenging, a Mississippi bankruptcy attorney can be a great source of knowledgeable advice concerning the benefits and impact of Chapter 7 or Chapter 13 bankruptcy.

Bankruptcy Attorney: Mississippi

Filing for bankruptcy protection can be a stressful and complex process.  A Mississippi bankruptcy attorney can clarify federal bankruptcy laws and state property exemptions and can advise petitioners what bankruptcy options are a good fit for their individual circumstances.