Table of Contents
  1. Filing Chapter 7 Bankruptcy in Mississippi: Can I keep my home?

Pecans, cotton, catfish, sweet potatoes — all have a huge, if not “capital,” presence in Mississippi. The nickname “Old Man River” is reserved for the Mississippi River, the largest river in the United States and the nation’s chief waterway. The Magnolia State also is rich in history, with the Mississippi Delta considered the birthplace of blues music while Vicksburg National Military Park preserves the site of a critical Civil War battle.

For those who live in Mississippi, they’ve no doubt felt the sting of the economic recession. The unemployment rate has remained at or above 5% throughout most of 2017. While the local economy has grown at a modest pace, it still remains behind the national average. It was one of only eight states with a lower employment rate in December 2016 than December 2007, the beginning of the Great Recession, and the second-lowest workforce participation rate in the nation.

Mississippi also is losing residents, with a state economist noting that “people are probably going where the jobs are.” The state’s adjusted per capita personal income from 2015 figures is just over $40,000 — the second-lowest in the nation.

Those who have found themselves struggling with debt in Mississippi may have options. They may be able to turn to bankruptcy for help.

See also: Qualifying for Chapter 7 Bankruptcy: Timing and the Means Test

Filing Chapter 7 Bankruptcy in Mississippi: Can I keep my home?

Many people can protect their property when they file for Chapter 7 bankruptcy protection. Some states allow debtors to use federal bankruptcy exemptions or state bankruptcy exemptions, without mixing or matching. In Mississippi, however, you must use the Mississippi bankruptcy exemptions.

That’s good news, in general. Mississippi’s homestead exemption, for example, is more general than the federal one. But how does it work?

Determining whether you can keep your home and file for bankruptcy is usually a fairly simple equation. First, determine home equity (value of your home minus any mortgage). Next, you’ll need to meet with a bankruptcy attorney to determine which state’s exemption laws will apply to your case. Note: A recent move may impact which state’s exemptions apply. State law varies as to how much home equity a debtor can retain while filing bankruptcy.

Mississippi bankruptcy laws allow $75,000 of equity in property owned and occupied by the debtor (primary residence) to be claimed as exempt, meaning the bankruptcy trustee can’t touch it. If the debtor is over 60 and married or widowed they may claim a former residence as exempt. Like many states, Mississippi limits the size of the homestead to be protected to 160 acres or less. Mississippi bankruptcy laws also allow the proceeds from the sale of a home to be exempted pursuant to the limitations described above.

In Mississippi, a mobile home can be exempted as personal property up to $30,000 (a mobile home does not qualify as homestead unless you own land on which it is located). Married couples filing a joint bankruptcy can double the homestead exemption if they live in separate residences.

Here are a few other popular bankruptcy exemptions in Mississippi.

Mississippi Bankruptcy Exemptions

The top 5 exemptions under Mississippi state law.
Type of exemptionMississippi law
Homestead$75,000 in equity under 160 acres; $30,000 in a mobile or manufactured home
Personal propertyUp to $10,000 in personal property other than real estate; plus $10,000 in personal injury awards; $5,000 in earned income credit, federal or state tax refunds; and tax-exempt education savings and health savings plans; plus a $50,000 wildcard exemption on any property if you're over age 70
VehicleNo motor vehicle exemption, but a $10,000 personal property exemption can protect your car
Wages100% of earned but unpaid wages owed for 30 days, 75% thereafter of earned but unpaid weekly disposable earnings (or 30 times the federal hourly minimum wage, whichever is greater)
Pension/retirementOf those deposited more than a year before bankruptcy: IRAs, Keoghs, and ERISA-qualified benefits

Mississippi Homestead Exemption

We’ve already given the amount, but how does the Mississippi homestead exemption work in the context of a Chapter 7 bankruptcy? Let’s say Jim, from Jackson, owns a home worth $100,000 with a $75,000 mortgage. In this example, Jim has $25,000 of home equity. If he were to file bankruptcy, the $75,000 Mississippi homestead exemption would completely shield his home from sale by the trustee. Jim would be able to shed burdensome debt and still keep his home. Miss. Code Ann. § 85-3-21

Mississippi Motor Vehicle Exemption

Mississippi bankruptcy laws allow debtors to protect up to $10,000 of personal property through a wildcard exemption. While Mississippi does not specifically provide an exemption for cars, the $10,000 wildcard exemption can be used to protect a car from the bankruptcy trustee. Miss. Code Ann. § 85-3-1(a)

For example, let’s say Bill from Oxford owns a Ford F-150 with an appraised value of $15,000 and an $8,000 loan. When we subtract the $8,000 loan from the $15,000 appraised value, we see that Bill has $7,000 of equity in his truck. If he were forced to file bankruptcy, he could allocate $7,000 of the Mississippi wildcard exemption to protect his truck and prevent its sale by the trustee. In other words, Bill could file for bankruptcy and keep his car.

Personal Property Exemption

As mentioned, the personal property exemption in Mississippi allows for $10,000 in personal property not including real estate. This can be your car, or any of the following items, up to $10,000 equity:

  • Furniture and household goods
  • Appliances
  • Clothing
  • Wedding rings
  • Tools of the trade
  • Books
  • Health aides
  • Pets
  • Crops

Additionally, if you’ve won a personal injury award, up to $10,000 is exempt. Miss. Code Ann. § 85-3-17

You also may exempt up to $5,000 in earned income credit, federal or state tax refunds. Miss. Code Ann. § 85-3-1(i), (j), (k)

Wages Exemption in Mississippi

If you’ve earned money but haven’t been paid it in the last 30 days, it’s 100% exempt from the bankruptcy trustee. Past 30 days, 75% of your weekly disposable earnings (or 30 times the federal hourly minimum wage) are protected from wage garnishment.

Pension and Retirement Accounts

In Mississippi, you may protect IRAs, Keoghs, and ERISA-qualified benefits that were deposited a year before you filed for bankruptcy. Federal non-bankruptcy exemptions also protect retirement account assets. Miss. Code Ann. § 85-3-1(e)

Wildcard Exemption for Seniors

Aside from the $10,000 wildcard exemption for all bankruptcy filers, those over the age of 70 have a wildcard exemption that allows them to exempt up to $50,000 of any property. Miss. Code Ann. § 85-3-1(h)

When filing for bankruptcy protection, be sure to seek the services of an experienced Mississippi bankruptcy attorney. He or she will go over which chapter of bankruptcy is most appropriate for your financial situation and review the bankruptcy exemptions with you. It’s much easier to file bankruptcy with a good lawyer at your side — and these cases have a better discharge rate than people who choose to file without an attorney.

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