Mississippi Debt Relief: The Tools You Need to Escape the Debt Trap

Mississippi Debt Relief

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Mississippi is home to an estimated 2,949,965 residents, many of whom struggle financially. In fact, poverty rates are amongst the highest in the state at approximately 19.4% — or just over half a million people. The average Mississippian household owes $60,375, an exceedingly high number considering the median household income is just $46,511.

If you’re a Mississippi resident struggling to make ends meet, here are some options for debt relief and economic help.

Are you eligible for debt relief?

If you’re a Mississippi resident, DebtHammer may be able to help.

Mississippi debt statistics

For Mississippi, here are some recent debt statistics:

Debt Relief Options for Mississippi Residents

If you’re looking for debt relief in Mississippi, here are your best options:

  • Debt consolidation loans: A debt consolidation loan lets you combine several high-interest debts into one, usually with a lower monthly payment and interest rate. With a loan, it’s often easier to make on-time payments. When done right, you could save hundreds or thousands of dollars in interest payments.
  • Debt management plan: A DMP is a three- to five-year program that combines multiple debts into one monthly payment so you can more easily pay them off. Depending on the plan and your creditors, you may also be able to lower your monthly payments or waive any late fees. DMPs are available through nonprofit credit counseling agencies.
  • Debt settlement: A debt settlement agency can help you negotiate expensive debts to a lower overall amount. Some people see an overall reduction in debts by up to 50% or more. This process involves making regular payments into a secured account until you have enough to repay the reduced amount in one lump sum.
  • DIY plans: If you’re good at dealing with debt collectors, consider a DIY debt settlement plan instead. Even if you can’t get the debt reduced, you may be able to lower monthly payments or interest rates.
  • Bankruptcy: Filing for bankruptcy could give you a fresh start but it’s also the last resort for most people. Only go this route after exhausting all other options and speaking with an attorney.

READ MORE: Which type of bankruptcy is right for you?

Debt settlement in Mississippi

If you’ve fallen behind on your bills or are struggling to make multiple monthly payments, a debt settlement plan could help. Debt settlement could also be the answer if you find yourself regularly relying on high-interest options like credit cards or payday loans to try to make ends meet.

With debt settlement, your creditor agrees to accept a payment that’s lower than your original debt. This could make it easier to repay what you owe or help you pay off debt faster. It could also help if you’re only other option is bankruptcy or if you’re facing a potential lawsuit for unpaid debts.

In Mississippi, a debt settlement plan can help you pay off different types of consumer debt, including:

  • Credit cards or lines of credit
  • Department store cards
  • Personal loans
  • Student loans in default
  • Old judgments
  • Other unsecured debts

There are a few risks to going this route. For example, creditors are not legally obligated to agree to settle a debt. The process can also hurt your credit score, though not as much as bankruptcy would. The IRS could also view the settled amount as taxable income.

Mississippi debt settlement companies

If you’re seeking debt relief in Mississippi and want to go the debt settlement route, here are some companies to consider:

Debt settlement attorneys

Here are some of the best debt settlement attorneys in Mississippi:

Debt resources for Mississippi residents facing hardship

In addition to offering debt relief, Mississippi also has many free or low-cost resources for residents facing financial hardship. This includes nonprofit, local, state, and federal programs that can help with the following:

  • Legal assistance
  • Rent/mortgage or utility bills
  • Education and childcare
  • Career help

One often-overlooked issue in the country is the cost of food. According to a recent survey, nearly half of Americans struggle with this issue daily. Mississippi is no different, with an estimated one in six residents facing hunger.

Fortunately, there are many charitable programs — like SNAP —, food pantries, and food banks available throughout the state. Here are some of the bigger ones:

For a comprehensive list of food banks and related services in Mississippi, check with Feeding America. The organization is dedicated to fighting hunger by helping individuals and families find nutritious food.

Income and employment in Mississippi

Mississippi’s unemployment rate was 15.4% in April 2020, during the height of the COVID-19 pandemic. Since then, it’s dropped to 3.8% — slightly higher than the national average of 3.5%.

Debt collection laws in Mississippi

Like the rest of the United States, Mississippi adheres to the Fair Debt Collection Practices Act, a federal law that regulates debt collection in the country. The FDCPA does many things to try to protect consumers against unfair debt collection practices. It prevents debt collectors from:

  • Harassing or threatening the person who owes the debt
  • Contacting the individual or their friends, family, or employer without prior consent (except to obtain contact information)
  • Claiming the individual owes a debt they do not have
  • Engaging in threatening, deceptive, or manipulative activities to collect money
  • Claiming they will take legal action against the person who owes the debt unless they can legally do so
  • Represent themselves as someone they are now (such as a legal professional or government official)

Mississippi also has an entire chapter devoted to debt management, known as the Mississippi Debt Management Services Act (repealed July 2022). This Act details the rules that a debt management service provider had to follow.

More recently, the state governor signed HB 687 to further establish and regulate debt collection and licensing requirements in Mississippi. Debt collectors in the state are prohibited from doing certain things. For example, they cannot garnish your wages or place a lien on personal property without first receiving a court judgment against you.

As for job growth, the state is ranked 50th and has had a steady decline in new job creation. Currently, it’s the only state where there are fewer jobs each year.

Mississippi is an “employment-at-will” state and a “right to work” state, meaning:

  • Employment-at-will: An employer may fire a current employee with or without a reason, barring discrimination. This often results in lower job security for residents.
  • Right to work: Employees do not have to join a union or pay union dues to work. However, they may also have less job security or lower wages.

How to apply for unemployment benefits in Mississippi

In Mississippi, two ways to apply for unemployment benefits exist:

  • Go to the Mississippi Department of Employment Security website and fill out an online application. You’ll need to register with MDES either online or at a WIN Job Center.
  • Call (601) 493-9427 and complete the application via phone during business hours (M-F from 8:00 am to 5:00 pm).

When registering online, you’ll need personal and employment information, such as:

  • First and last name
  • Social Security number
  • Physical address
  • Phone number
  • Contact information for all previous employers in the past 18 months
  • Dates of recent employment (start and end)
  • Reason for leaving a previous job
  • Alien Registration number or Visa number (for non-citizens)

Most people must wait about a week after registering and filing for benefits to receive their first payment. After that, be prepared to file weekly claims to continue receiving benefits. You’ll also need to start looking for a new job to remain eligible.

Banking and taxes in Mississippi

A few states, including Mississippi, use a graduated income tax rate for individuals and businesses. The rate is:

  • 0.00% for the first $4,000
  • 3.00% for the next $1,000
  • 4.00% for the next $5,000
  • 5.00% for all income over $10,000

For joint (married) filers, each spouse uses the above tax rate for their own income and then combines the totals to determine their final taxable amount.

Thanks to new legislation, Mississippians will pay a lower income tax rate beginning in 2023. The goal is to help struggling residents, help induce economic growth, and bring new people to the state.

This change will eliminate the 4.00% tax bracket. It will also reduce the 5.00% tax bracket to 4.00% for the next several years. Also, single filers will experience no income tax on the first $18,300 ($36,0600 for married couples) for the first year.

As for sales tax, Mississippi’s current rate is 7.00%.

And finally, when it comes to banking, 12.8% of Mississippians are considered unbanked. This essentially means they have no active checking or savings account. It also means they are more likely to turn to expensive financing options like cash advance apps or payday loans to make ends meet.

Mississippi housing market

According to Zillow, the average Mississippi home value is $171,495. This is a 12.90% increase over the past year. However, it’s still far below the national average home value of $357,589.

Nearly 70% of Mississippi residents own their own home. The average mortgage payment is $1,149.

Rental prices vary by city. For example, a 933 sq. ft. apartment in Jackson, the most populous city in the state, costs about $928.

Homeowners in Mississippi may benefit from the homestead exemption. This exemption protects up to $75,000 or 160 acres from creditors. To be eligible, you must own and occupy the property as your primary residence.

Retirement in Mississippi

The typical Mississippi resident has $347,884 in retirement savings. This falls short of the recommended $505,346 to retire comfortably.

Average Mississippi insurance premiums

On average, Mississippians pay $1,471 a year ($122 a month) for their car insurance premium. This is slightly lower than the national average of $147.

Mississippi residents pay $1,377 annually for homeowners insurance — $114 a month — for a $100,000 home. For a home valued at $250,000, the average premium is $2,761 — $230 a month. This is almost twice the national average.

Payday lending status in Mississippi: Legal

Payday loans are legal in Mississippi. The situation is so dire that Jackson ranks second on the list of cities with the worst payday lending problems. However, lenders do have to follow specific guidelines. This includes:

  • Maximum loan amount: $500
  • Maximum Interest Rate (APR): Up to 572%
  • Minimum loan term: N/A
  • Maximum loan term: 30 days

Statute of limitations on debt in Mississippi

The statute of limitations on consumer debt ranges from three to seven years in Mississippi:

  • Medical debt: 3 years
  • Credit card debt: 3 years
  • Auto loan debt: 3 years
  • State tax debt: 7 years

State hardship programs

Here are several state-specific hardship programs for Mississippians struggling with debts or making ends meet:

Help for Veterans

Mississippi is home to approximately 187,072 veterans. The state has multiple programs and resources to help struggling veterans and their families facing unemployment, homelessness, or other hardships. Many programs are through the Mississippi Department of Veteran Affairs.

Facilities in Mississippi

The U.S. Department of Veterans Affairs has a complete list of VAs throughout the country, including in Mississippi. Here are the major ones:

Biloxi VA Medical Center

  • 400 Veterans Avenue, Biloxi, MS 39531-2410
  • (225) 523-5000

Hattiesburg VA Clinic

  • 5003 Hardy Street, Tower B, Suite 402 Hattiesburg, MS 39402-1331
  • (601) 296-3530

G.V. (Sonny) Montgomery Department of Veterans Affairs Medical Center

  • 1500 East Woodrow Wilson Avenue Jackson, MS 39216-5116
  • (800) 949-1009

Biloxi Vet Center

  • 288 Veterans Avenue Biloxi, MS 39531
  • (228) 388-9938

Jackson Vet Center

  • 15 River Bend Place Suite 15A Flowood, MS 39232
  • (601) 985-2560

Jackson Regional Office

  • 1600 E. Woodrow Wilson Ave. Jackson, MS 39216
  • (601) 364-7083 or (601) 364-7088

Biloxi National Cemetery

  • 400 Veterans Avenue Bldg. 1001 Biloxi, MS 39531
  • (228) 388-6668

Employment resources for Veterans

Here are some employment resources for veterans and their families:

  • CareerOneStop offers everything from job resources to career advice and a job search portal
  • MilitaryHire.com connects veterans, active military members, and their family members to civilian careers in many industries
  • VeteranRecruiting.com has virtual career fairs throughout the year for veterans and military spouses
  • Helmets to Hardhats helps active service personnel and veterans transition into a civilian construction career
  • Hiring Our Heroes works with veterans, spouses, and active military members to get them hired and build upon their job education
  • My Next Move helps veterans move into a civilian career that uses their military skills
  • Warriors to Work matches veterans with employers and helps them improve their odds of finding work

The bottom line

Mississippi has a higher-than-average poverty rate and is one of the lowest-ranked states in terms of job growth. However, there are many debt relief and financial resources and programs available to help if you’re struggling with the high cost of living or need help paying bills.

FAQs

How long can a debt be collected in Mississippi?

Most consumer debts can be collected for three to seven years.

When does the statute of limitations begin in Mississippi?

The statute of limitations starts on the date of your most recent or missed payment.

Am I responsible for my spouse’s debt if I get divorced in Mississippi?

Typically, the original contract with the creditor will determine who is responsible for repaying the debt. If, for example, your spouse owed a debt prior to marriage, they may be responsible for it. However, you could be equally responsible if the debt is under both of your names. During divorce proceedings, the court will decide which spouse must repay the debts.

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