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Mississippi Debt Relief Guide: Understanding State Laws and Managing Debt
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Known as “The Birthplace of America’s Music,” the state of Mississippi also has a foot solidly in nature. Heavily forested and home to one of the richest fish faunas in the country, “Ole Miss” has a population just shy of 3 million as of 2018.
In terms of debt, Mississippi is not immune to the difficulty of making ends meet. If you’re one of those who are struggling, you will find the information you need in the following article. Read on to learn more.
- Debt in Mississippi: At a glance
- Debt collection in Mississippi
- Mississippi debt relief programs
- Payday lending laws in Mississippi
- Tips to tackle debt in Mississippi
- Filing for bankruptcy in Mississippi
- The bottom line
Debt in Mississippi: At a glance
|Type||Per capita balance, 2018||Rank out of 50 states*||U.S. per capita balance|
|Credit card debt||$2,110||50||$3,220|
|Student loan debt||$5,870||12||$5,390|
|*No. 1 is the highest
**First-lien debt only
Source: Federal Reserve Bank of New York, March 2019
Debt collection in Mississippi
In Mississippi, most debt collection firms will attempt to reach a debtor by phone. It’s important for you to know that Mississippi is a one-party consent state with regard to recording phone communications, so you are not necessarily going to be given the option of declining. Additionally, since there are no legal statutes addressing liability for third-party disclosures through voice messages, don’t expect confidentiality on your answering machine or voicemail.
If ignored long enough, a debt can escalate to a lawsuit. If this happens, it needs to be done in your home county. You may be personally served, or a family member who lives with you may be served if they are 16 or older and willing to accept it.
You can either be served by a process server or the county sheriff, and judgments come in three categories: default, consent or summary. Default judgments take place when a defendant does not respond within 30 days or more, while consent judgments happen when a defendant contacts the collector to come to an agreement. Summary judgments take place in a court of law.
Garnishment comes in two types: wage and bank. Up to 25% of a consumer’s take-home wages may be seized under a garnishment, while a bank garnishment seizes all available funds so long as it is clear that said funds belong to the consumer.
Under the Mississippi Fair Debt Collection Practices Act, debt collectors are forbidden from:
- Calling before 8 a.m. or after 9 p.m.
- Harassment or abuse
- Using false names to obtain information
- Informing anyone that you owe money
- Threatening criminal charges
- Calling you at work if you inform them that your employer disapproves
- Sending documents that appear to be official government forms
Additionally, debt collectors must stop contacting you if you request this in writing.
Responding to collection letters
Understandably, a letter from a collection agency can prove stressful. When deciding how to respond to these notices, keep in mind the statute of limitations we’ve detailed above. Here are a few things to keep in mind:
Request a debt verification letter. Be certain to get the name of the person who contacts you, the name of the company for which they work, and the address and phone number of said company. Also, be sure to get the name of the original creditor, the amount owed, and the method by which you can dispute the debt or confirm that the debt is yours. We’ve got some sample letters you can use to request a debt validation letter.
Don’t sweep it under the rug. If you have debt, waiting can only create trouble as debt-collection companies will continue to escalate their efforts over time.
Should you wish to complain about collections practices, you must fill out an official complaint form. The form may be obtained by calling the Consumer Protection Division at 800-281-4418.
It may also be accessed online at the attorney general’s website. When your complaint is received, a consumer protection mediator will inform the company and request a response in writing.
Either you or the company may need to provide additional information. Keep in mind that the attorney general may only file suit in the case of statewide deceptive business practices or when many consumers are affected. If the division cannot help you, it will try to refer you to other resources.
Understanding Mississippi’s statute of limitations
Debt doesn’t last forever, but different kinds of debt can ding you for varying amounts of time.
The statute of limitations on debt dictates how long a creditor has to pursue you in court for an unpaid debt. Once that window has closed, so has their window to sue you. However, they can continue to try to reclaim the money by other means, including phone calls and letters. It’s important not to make a payment on a debt that’s past it’s statute of limitations — or even promise to make a payment — because that can restart the clock all over, giving creditors another chance to sue.
The statute of limitations varies depending on the nature of a debt and the state in which it was incurred. If we’re talking about an open account, it’s three years from the time the account went into default; if we’re talking about a note, it’s three years from when the note was signed.
Refer to the table below to learn more about Mississippi’s statute of limitations on a wide variety of debt.
|Mississippi Statute of Limitations on Debt|
|Mortgage debt||3 years|
|Medical debt||3 years|
|Credit card||3 years|
|Auto loan debt||6 years|
|State tax debt||7 years|
Mississippi debt relief programs
If you’re finding yourself in debt, help is available. Here is a list of organizations – both state and national – that offer resources to debtors in need:
Debt Reduction Services: This nonprofit debt reduction company offers credit counseling and debt consolidation. Services include creditor negotiation, lowered interest rates, ceasing collection calls, and financial education.
U.S. Department of Justice-Approved Credit Counseling Agencies: These agencies have been given the thumbs-up by the court of the Northern District of Mississippi. They include:
- BK Class, Inc., which provides credit counseling and debtor education
- Debtorcc, Inc., which offers an online bankruptcy education course
- Wiser Consumer Education, Inc., a national nonprofit organization offering budget and credit counseling, along with debtor education
Payday lending laws in Mississippi
- Maximum loan amount: $500
- Maximum loan term: 30 days
- Finance charges: Maximum of $20 per $100 advanced for checks up to $250 and maximum of $21.95 for checks between $251 and $500.
A payday loan is defined as the following: cash advance loans, delayed deposit loans, and deferred presentment loans. These short-term cash loans involve a check that is written by the borrower but not cashed until a mutually agreed-upon later date.
While it is allowable to have more than one payday loan at a time, a borrower may not write checks totaling more than $500.
Payday loans are an extremely risky solution to short-term financial stress — and are not an answer to long-term debt. Instead, try creating a budget, cutting out unnecessary expenses, working with your creditors to make payment arrangements, and getting together an emergency fund.
In Mississippi, payday loans are regulated by the Check Cashers Act, which includes the following stipulations:
- Every payday lending business must have a valid license
- Payday lenders must not be less than 100 square feet in size and may not be located near such institutions as a pawn shop or title pledge office
- Agreements must be clear, particularly when it comes to fees and other obligations
- All borrowers must have proper identification.
Tips to tackle debt in Mississippi
The good news is that there are ways to manage debt, even if you have outstanding obligations. You might consider debt consolidation (rolling one or multiple unsecured debts into another form of financing), a credit card balance transfer (rolling over your debt from one or more credit cards to another one, typically carrying a lower interest rate), or a home equity loan or home equity line of credit (money borrowed against one’s property). Here are more details on such strategies:
Consolidate your debt. If you are behind on personal loans, medical debt, credit card debt, or other obligations, this may be a good option to combine your obligations and thereby simplify repayment. The pros of debt consolidation include less stress, saving money, and building credit; however, the cons include the fact that poor credit can lead to being turned down for a consolidation loan. In addition, this strategy won’t teach you how to better budget in the future.
Tap into your home equity. Whether you opt for a home equity loan (a lump sum) or a home equity line of credit (a line of credit used against the equity in one’s home), this strategy involves anchoring your debt management strategy in your home’s value. While it can be helpful to tap into your home equity to manage debt, keep in mind that if you fail to repay the financial obligation, you risk losing your home.
Refinance. This is particularly helpful if you’re looking to manage auto and mortgage debt. Refinancing simply means replacing your loan with a new one – likely with better terms more befitting your current situation. These may include a more competitive interest rate, lower monthly payment, or a shortened or lengthened loan term. Student loans may also be refinanced, combining all obligations into a single monthly payment. Keep in mind, however, that this disqualifies you from forgiveness programs on federal loans, so proceed with caution.
Use a balance transfer card. If you’re dealing with a lot of credit-card debt, this can give you time to pay down the obligation. You’ll likely need very good credit in order to qualify for cards with the longest 0% introductory APR offers (which typically tend to last 12 to 21 months). Keep in mind, balance transfers can only be used for credit card debt. If you need to consolidate other types of debt, consider a personal loan instead. Additionally, these cards often come with a balance transfer fee, which is typically 3% of the transferred amount. The key to seeing success with a balance transfer is making sure you can pay off the balance before the 0% promotional period ends. Otherwise, you risk being hit with high interest fees afterward, and ending up with even more debt than you had before.
Filing for bankruptcy in Mississippi
If you’re feeling desperate, bankruptcy is an option, albeit not always the most desirable one. The first thing you should know is that bankruptcy will remain on your credit report for a long time to come — to the tune of 10 years for Chapter 7 and seven years for Chapter 13. That said, it’s a chance to discharge your debts and start fresh so it may be worth considering depending on your situation.
A few things you should consider:
- Are you in danger of losing your home?
- Are debt collectors calling?
- Are you liquidating your retirement assets?
- Are you using loans to pay bills?
If your answer to the majority of these questions is yes, it may be time to think about filing for bankruptcy in order to get your financial life back on track. Here are a few Mississippi state resources along these lines:
- Mississippi Bankruptcy Law: Offers location, contact information and web pages for the federal bankruptcy court as well as local bankruptcy attorneys.
- U.S. Bankruptcy Court – Southern District of Mississippi: the official site of the state bankruptcy court.
- Mississippi Bar Association: legal information for those considering bankruptcy.
The bottom line
If you’re in over your head when it comes to your debt, there’s no need to throw in the towel. Whatever you decide to do, it’s better to act than to do nothing. Whatever you do, make sure you evaluate how you got into debt and formulate a plan for staying debt-free in the future.
The information in this article is accurate as of the date of publishing.