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How to Get Debt Relief in Mississippi

Dena Standley | June 05, 2024

Dena Standley
Legal Expert, Paralegal
Dena Standley, BA

Dena Standley is a seasoned paralegal with more than 20 years of experience in legal research and writing, having received a certification as a Legal Assistant/Paralegal from Southern Technical College.

Edited by Hannah Locklear

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: If you're struggling with debt in Mississippi, SoloSuit can help you find the relief you need.

Having some debt is healthy. You earn lenders' trust when you pay it back on time, and it can help you get competitive interest rates in the future. However, when unsecured and other debts pile up, they become a problem. Instead of an excellent credit score, you get bad credit as creditors threaten to sue.

Too much debt can make paying for ongoing expenses a challenge, even with minimum monthly payments. It helps to know that you are not alone and can get debt relief. Mississippians can utilize state and federally-approved debt relief programs while working on better financial management. In this article, we'll discuss several debt relief options:

  • Utilize Mississippi debt relief programs
  • Get rid of your credit cards
  • Negotiate with creditors
  • Consolidate debts
  • File for bankruptcy

Let's dive right in.

Utilize Mississippi debt relief programs

If you are a Mississippi resident struggling to make ends meet because of debt, you may be eligible for financial assistance. Check out these Mississippi debt relief programs to see if you qualify:

  • Mississippi Temporary Assistance for Needy Families (TANF): Provides benefits for families with needy children under age 18. The TANF program is designed to help needy families achieve self-sufficiency through employment and training activities provided by the TANF Work Program (TWP). TANF supportive services such as assistance with child care and transportation expenses are available to help the adults in the family prepare for employment and to promote self-sufficiency.
  • State Health Insurance Assistance Program (SHIP): A counseling program designed to answer questions about health insurance.
  • Mississippi Lifeline: Offer $10-$20 per month to help low-income families pay for local phone service.
  • County-specific low-income programs: Mississippi has several financial assistance programs that are specific to certain counties only.

Get rid of your credit cards

Not using credit cards can be a serious change of pace for you, but cut up those cards if you honestly can't use credit responsibly. While taking this route doesn't instantly relieve debt, you protect yourself from raking in more debt.

As mentioned earlier, forgoing the use of credit cards may stagnate or lower your credit score. But the urgent issue here is getting out of debt. You can build your credit later.

Remember that refraining from using your credit card won't take away the debt. The next step would be to work out a repayment plan. Choose between the snowball or the avalanche method.

Use the snowball method

With this method, you start by paying off your smallest debt, interest rates notwithstanding. The first step is listing your debts, starting from the least to the largest. The goal is to pay off one debt at a time and move up the ladder until you are debt-free.

Here's an example. You have seven unsecured debt accounts. The balances are $500, $750, $800, $1,000, $1,125, $1,600, $2,000. Your main focus should be on the first account ($500). In the meantime, keep making minimum repayments on the remaining accounts to avoid late fees or delinquency.

You won't save on interest. However, as you watch the debts disappear one after the other, you will feel encouraged to keep up with the remaining accounts. You will sometimes feel like giving up, especially when you start tackling the larger debts, but if you do, you only fall back to where you were. Resilience is of the essence.

Consider the avalanche method

The goal of the avalanche method is to save on interest. So, you take on the account with the highest interest rate first.

Using the preceding example, suppose the interest rate for the $1,000 is higher than that on the other accounts, at 20% APR. That is the account you should pay first. After that is cleared, you move on to the account with the next highest interest rate until you pay off all your debts.

Negotiate with creditors

You can negotiate a settlement, a different payment plan, or ask for debt forgiveness if you are experiencing hardship. You can represent yourself when contacting credit providers if you are willing to try. Or you can enlist the help of a debt relief company or a debt counselor.

Negotiating on your behalf is the cheapest option. You don't pay for enrollment, and no one takes a portion of the forgiven money. Creditors are always willing to negotiate, especially if there's the risk that you may never pay at all. So, call to book an appointment or walk into your creditors' office and request an audience.

It is important to note that you should never say too much to your creditors. Anything you reveal can be turned around and used against you. Watch the video below to learn more about what you should and should not say:

Actions your creditors may take in negotiations:

  • Adjust the monthly repayments to suit your needs
  • Agree to settle for less than the total amount
  • Waive late fees
  • Review interest rates

Nonprofit organizations can also help negotiate with your creditors. Credit counselors work with you to help you stay on top of your finances. A workable budget, a revised payment plan, or late fee waivers are just some relief options you can get by requesting debt counseling. Remember that you will need to make monthly payments to the agency. They will then distribute the money among the creditors. Also, you may be required to avoid using credit until your outstanding balances are paid.

If you decide to use for-profit debt relief providers, you need to pay for their services. Some of these companies require a minimum amount of unsecured debt to work for you. Some may only partner with you if you have thousands of dollars in debt.

Debt relief companies can help you:

  • Consolidate debts into one low-interest account
  • Negotiate a settlement with creditors

When you settle a debt for a percentage, the creditor reports it to the IRS, which may require that you pay tax on the forgiven money. The settled account is also reported to the major credit reporting bureaus and will impact your credit score.

Filing for bankruptcy in Mississippi

In Mississippi, filing for bankruptcy wipes out bills like credit card balances, personal loans, overdue utility payments, medical bills, etc. Other loans, such as student loans and mortgages, may take more than bankruptcy to fall off.

The process falls under federal law. So it is largely similar to that in other states. However, the state laws determine the filing information and "exempt" property.

It's best to decide ahead which bankruptcy chapter fits your needs. The type you choose affects if and which property you can keep. Before filing, determine if you:

  • Qualify
  • Need to hire a bankruptcy attorney
  • Need to register for credit counseling
  • Have qualifying debts you can stop paying
  • Will erase the debt you are trying to clear

Filing for bankruptcy is neither easy nor pleasant, but you can do it. And it can provide the reprieve you need now.

The key to debt relief is staying in control of your spending. Because even if you pay all your debts but are not disciplined, you will soon find yourself under a mountain of debt again. SoloSuit helps consumers get out of debt by providing useful resources and helping them win in court.

What is SoloSuit?

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