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credit-cards-150x150Americans are in record debt – for the first time ever, credit card debt passes $1 trillion! Along with the skyrocketing of the country’s national deficit, a debt crisis is hovering over the private sector. New information shows Americans are more in debt now than at any point in history. According to the Federal Reserve, for the first time in our nation’s history, American credit card debt flew past the $1 trillion mark, with $250 billion in the last two years alone and $45 billion in the last quarter alone.  Just to put this into context, American credit card debt is now larger than the GDP of all but 17 countries on earth. Wow.

Even though some may think that reckless spending habits might play some role in this, the reality is that more and more Americans are being forced into credit card debt trying to pay off monthly living expenses. Over the last two years, as inflation has taken hold of the economy, the cost of necessary goods has hit the roof. A newly released report from Moody’s shows that the average American family pays $709 more now each month for the same goods they were purchasing in 2021.  With around 60% of Americans living paycheck to paycheck and 54% saying they wouldn’t be able to cover an unexpected $400 payment, it only takes a small monthly change to drive people into debt just to make ends meet. Another side effect of the Fed’s continuous rate hikes, the average credit card interest rate is now around 20% (which is the highest mark on record), translating to the cost of that debt being even higher.

Keep in mind that one of the fastest ways to negatively impact your credit score is to max out your credit card debt. It doesn’t matter that you’re paying on time nearly as much as it matters that you have maximized all available credit limits. If you are only paying minimum credit card payments monthly, you will be paying on that credit card debt for years and years. It will take a long time to ever pay down this debt, even enough to the point to regain traction on your credit score.  One small change in your income or overall financial situation can then cause late payments, which tank your credit score even further.  Without a decent credit score, lenders are unwilling to provide you with debt consolidation loan options.  Or if they do, they are at enormous interest rates. Many consumers, over the past two or so years, have consolidated their credit card debt only to then again run up the credit cards that were paid off in the consolidation.

As a result of legislation enacted by Congress, the student loan payment freeze is ending. Student loan interest will resume Sept 1, 2023. For most, payments will be due in October 2023. It is expected that nearly half of borrowers are unable to begin making payments again. Many people are simply not in a stable enough position to begin with these payments at this time.  One in five borrowers are facing monthly payments over $500! Another survey stated one out of four will have to consider putting off buying a house or getting married in order to begin payment on their student loans again.

If you are entering repayment or beginning your student loan payments for the first time, there are 3 things you should do now.

  1. Make a budget – take a hard look at your monthly income and expenses.

building-credit-300x177Managing your money: Step one to building credit. It may seem like a step backwards, but before you can build and/or rebuild your credit, you must first make sure you have laid a solid financial foundation based on proper management of your money. You must be able to manage what you have before you can increase and expect what you are building to stand.

So let’s take a moment and talk about managing your money. In order to begin managing your money, you must first know exactly how much you have now and will have on an ongoing basis (your income). Then you must know how much you spend (your expenses). Start with the money you earn. What is your Gross (before taxes & deductions) income?  Review your deductions – are you paying enough tax, too little tax? Are your other deductions in line with what you need? Are you carving out at least a minimum of savings for retirement? Now let’s take a look at your Net (take home) income.  Be sure you are looking at this amount as a “monthly” number. Next, list out all your expenses that must be paid from that Net income. House/Rent, food, gas, lights, etc. Everything. Trips to the candy store. All of it. You can look at your bank statements or receipts to get an idea of what the average costs are and to be sure you haven’t missed anything.  The most common issue people have when they get into financial trouble is that they do not know their numbers. Maybe round about – but money spent without a plan is usually much more than you would spend with a plan. 
Once you have both numbers – total income and total expenses – subtract your expenses from your income. Do you have money left? Are you breaking even or are you in the hole?  Now that you have an answer – it’s time to start making management decisions about your money. If your expenses are already at a minimum, what can you do to earn more? If your income cannot be changed, what can you do to spend less? 

replevin-steps-300x167How can I stop an Order of Replevin? If someone has received an Order of Replevin, (a legal procedure used to recover property) it probably is for property used as collateral on a loan or being purchased through a loan agreement by that person.  The lien holder desires to repossess the property (car, furniture, mobile home, shed, trailer, equipment, etc) and has filed a lawsuit and received an Order of Replevin against the debtor because the debtor refuses to surrender the property voluntarily.

The best way to stop an Order of Replevin is to not let it get to the stage of the Order being issued. You need to address things once the lawsuit has been filed against you by the person/company seeking the Replevin – stopping an order from being issued in the first place. This lawsuit is filed and called a “Writ of Replevin”. When you receive notice of this lawsuit, respond! If you fail to do anything, an Order of Replevin will be issued to the person/company seeking it. You should have received a Replevin Summons (Notice to Appear in Court) and been given 20 days to respond to the lawsuit to fight it. If you fail to respond, the person/company will file for a default judgment.  After the default (or final hearing), the judge will grant the final judgment (Order of Replevin).

Speak with an attorney. You can stop a Writ of Replevin by fighting the lawsuit itself or, if the debt is legitimate and you are behind without the ability to catch up, you can file a Chapter 7 or Chapter 13 Bankruptcy case.  The bankruptcy case will stop the Replevin action in it’s tracks. Depending upon which type of bankruptcy you file, you will either retain and pay under new terms for the property or you will surrender the property at a later date, established through the bankruptcy court process.

Definition of ReplevinRepossession vs Replevin – what is the difference? Click here for definition of Repossession. A Replevin is basically the repossession of collateral (ie: vehicle, furniture, etc) that could not be done without breaching the peace (ie: car locked in garage, furniture locked in house, etc) so the creditor seeks help from the court and this is called a Replevin Order or Writ of Replevin. With a replevin lawsuit, the court provides the creditor an order from the court requiring you to give back the collateral to the creditor. If you do not follow the court order, you will be subject to penalties.

Unlike repossession, a replevin entitles you to some due process before the creditor can take the collateral (property) from you.  This means you must receive written notice of the creditor’s intent to get a replevin order, you have an opportunity for a hearing, you will receive written notice of the time, date, and location of the hearing, and you have the right to dispute and/or respond to the complaint.  The time to respond and/or request a hearing varies by state, but it is typically short.

A replevin can apply to different situations, including a circumstance of where two parties both have rights to the possession of property, but one party might have more rights to that property than the other party. It can also apply to situations where property that has been lawfully withheld but should have been released later to a person, but was not released.

MSDefinition of Statute of Limitations Statutes of Limitations on Civil Matters – MS Code § 15-1 

Of course this 2013 MS Code Title 15 – Limitations of Actions and Prevention of Frauds § 15-1 covers more than just civil statutes, but for the purpose of this discussion, we will focus only on civil statutes, and even more specifically, collection of debt and judgments.   So first of all, what do we mean by civil statute of limitation? The definition is a statute prescribing a period of limitation for the bringing of certain kinds of legal action. In other words, this law sets the maximum amount of time that a party has to initiate legal proceedings against another party they have a dispute with and the time starts from the date of an alleged offense – whether criminal or civil.

Maybe you’ve had a car accident and it’s been a while or you have an old credit card debt, hospital bill, or other issue that you thought was long gone, but you’ve been served papers regarding a new or updated lawsuit. Hasn’t enough time passed? How are they still suing you over this issue?   Collection of Debt on Account is covered under Mississippi Code 15-1-29 and states a 3 year limit.   A Judgement (a lawsuit that was filed against you and was ruled in favor of the company/person that filed against you) is covered under Mississippi Code 15-1-43 and states a 7 year period.  The courts have these limitations in order to create as much fairness and predictability as possible. You have a certain amount of time for legal action to be taken against you and it guarantees that you don’t have unfinished legal matters hanging over your head indefinitely. There are deadlines and all parties must take action accordingly or take no action at all.

Stop RepossessionHow late can I be before repossession will happen?

We get asked this question a lot. I mean A LOT. There is no law that states your property cannot be repossessed unless you are a certain amount of time behind. You can be 1 day behind or 4 months behind. The lender is the one that decides when to take that action and they can take that action the moment you fail to fulfill the loan agreement you have with them.  Different lenders have different policies and procedures.  Know what your lender’s policies and procedures are regarding repossession now.  Don’t wait to know what will happen because it more than likely will catch you by surprise. Hopefully you will never need to know their process and procedure for this – but the saying “knowledge is power” is true.

Most repos occur after two+ months of no payment, but there is NO LAW dictating a set time frame in MS.

Many Americans are asking lately “What if I can’t pay my car loan?” First of all, you’re not alone in the struggle. If you’ve missed car payment or two recently – or worry you might miss one soon – you have options. Typically, missing a car payment will damage your credit score or even lead to your lender repossessing your vehicle. However, most lenders have some type of financial hardship program if you ask for help.  You do have to ask though. And ask ahead of missing a payment, if at all possible.  The worst thing you can do is to ignore the situation and hope it’ll work out on its own in time.  Here’s a look at some options & resources that might help you deal with your car payment.

First, see what assistance your lender has to offer

Find out what kind of programs your bank, credit union or other auto loan lender has available.  Also, get familiar with Mississippi Repossession Laws to know what can and cannot be done. Most of the automakers no longer advertise their payment relief programs. If you are facing missing a payment due to a job loss (from the pandemic or whatever other reason), the best thing to do is to contact your lender. Explain your situation, and hopefully they may be able to offer some short term assistance like a payment deferral, a partial payment option or a lease extension.

Mississippi Repossession Law allows “self-help” repossession. It states that your possessions can be repossessed under the following conditions:

  • You signed an agreement and used the property as collateral for the loan.
  • You failed to honor the terms of the loan agreement (note: the property may be put up for repossession immediately).

The FDIC frequently hears from bank customers who have been or think they were the victims of theft or fraud. The FDIC Consumer News highlighted 10 scams that specifically target bank customers and provided some basic instruction on how to protect your money and personal information in the article I have linked to below.  Be sure to click on “10 schemes”.

The topics included:

  • 10 schemes bank customers should watch out for, beginning with the crime that occurs when thieves pose as government employees with false claims about needing a payment or valuable information, such as Social Security or bank account numbers;
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