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How To Consolidate Your Debts in Mississippi

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In a Nutshell

Whether you have already scheduled your free non-profit credit counseling session or not, you can start working on your Mississippi debt consolidation now. All of the steps that follow are designed to usher you quickly and easily through your own customized debt consolidation process.

Written by Upsolve Team
Updated December 31, 2021

According to a recent survey, Mississippians have the fifth-highest credit card debt burden among residents of the United States. With just over $7,600 in credit card debt compared to a median household income of $44,717 residents of Mississippi often struggle to pay their credit card bills. If you're having a hard time paying your credit card bills and other debt and are looking for a way to make your dollars go further every month, then Mississippi debt consolidation may be the solution you are looking for.

Mississippi debt consolidation combines your high-interest rate unsecured credit card debt and other eligible debts into one single monthly payment. Debt consolidation is especially helpful for individuals with regular monthly income and otherwise low cost of living expenses.

Mississippi debt consolidation combines and potentially lowers your monthly debt payments and helps you streamline the process of paying your creditors back. Individuals are able to consolidate multiple monthly debt payments into one payment that's often has a significantly lower interest rate. This can help you budget for your other monthly expenses like rent or your mortgage, groceries, child care, and healthcare.

You can achieve Mississippi debt consolidation in several ways. One way involves taking out a new personal loan or opening a new line of credit to pay off your high-interest credit card debt and other debts you want to consolidate. Your new loan can be a personal loan, a home equity loan, a refinance of your mortgage, or a credit card balance transfer. Another way to achieve debt consolidation in Mississippi is through a debt management plan. A debt management plan doesn't require you to take out a new loan. Instead, it consolidates all of your high-interest debt into one lower monthly payment. Once your DMP is in place, you’ll submit your monthly payment to the credit counseling agency, which will distribute that payment to your creditors.

Learn More Through Free Nonprofit Credit Counseling

To receive a more thorough explanation of how Mississippi debt consolidation works and what type of debt consolidation might be best for you, you can connect with a non-profit credit counseling agency in Mississippi that provides credit counseling free of charge. Organizations including Money Management International, CESI, and Green Path offer these services.

A nonprofit credit counseling session can help you understand whether you could benefit from debt consolidation and/or other money management tools available to you. During your free session, your non-profit credit counselor will work with you to assess your current financial situation and create a personalized action plan to help you achieve your financial goals. If you like, most credit counselors will review your credit history and credit score with you as well.

Credit counseling sessions are not only free of charge, they are confidential. Nothing you share with your credit counselor will be reported to or shared with any credit bureaus. For help finding an accredited non-profit credit counseling agency in your area, feel free to contact Upsolve.

How to Consolidate Your Debts in Mississippi

Whether you have already scheduled your free non-profit credit counseling session or not, you can start working on your Mississippi debt consolidation now. All of the steps that follow are designed to usher you quickly and easily through your own customized debt consolidation process.

Collect the Details About Your Debts 

You’ll want to start by collecting the details of the debts you would like to consolidate. You’ll need to know who you owe, how much you owe them, your minimum monthly payment, your annual interest rate, late fees, over-the-limit fees and any other loan terms that might be important to include in your Mississippi debt consolidation deliberation process. In most instances, the best way to obtain all of these details will be with your most recent credit card statements. However, you should collect details on other debts you have as well, like car loans, medical bills, and student loans. Even if these debts cannot be consolidated, your credit counselor will use this information to help you create your broader financial action plan. You should also obtain a free copy of your annual credit report to ensure the accuracy of the details in your statements and make sure you do not overlook any outstanding debts.

Determine Your Monthly Income

Because you need a steady, reliable monthly income to make monthly debt consolidation payments, assessing your monthly income is just as important as assessing your debts when it comes to determining whether debt consolidation is right for you. Generally speaking, the best measure of your regular monthly income is the pay reflected in your two most recent paychecks. Just make sure not to include any overtime or special pay in your calculation. Additionally, be sure to note whether you are paid bi-weekly or semi-monthly. If you are paid bi-weekly, your monthly income is not simply your paycheck multiplied by two every month. Bi-weekly income occurs every two weeks, 26 times per year and generally includes 80 hours. Semi-monthly income, on the other hand, occurs twice per month, 24 times per year and generally includes 88.67 hours each pay period. As a result, if you get paid bi-weekly you receive two more checks per year than someone who gets paid semi-monthly, however your checks are about ten percent smaller each pay period. You can determine your pay frequency by looking at your monthly pay stub. 

Put Together Your Budget

One of the most important tools for proper money management is a sensible and realistic budget. A budget is a snapshot of your income and expenses over a certain period of time. For purposes of debt consolidation, the period of time you’ll want to use is a month. You’ll use your budget to track the income you bring in every month (regularly) and the expenses you pay out. The difference between these two is known as your “disposable income.” As you track your expenses, divide them into two categories, “fixed costs” and “variable costs.” Variable costs are those expenses you can usually control to some extent every month. Fixed costs include expenses that do not fluctuate more than $10 per month such as your rent or mortgage payment, auto loans, student loans, and insurance. Variable costs include expenses that fluctuate from month to month such as gas, groceries, recreation, and entertainment. If you do your calculation and do not have any disposable income left, or you have significantly more disposable income available to you than makes sense, try to identify the source(s) of the inconsistency. Potential reasons for inconsistencies may include:

  • Very high disposable income - compare this to your monthly debt payments. Are your numbers in line to show an accurate figure of what you have left every month? If not, what is the reason?

  • Missing expenses. Check your bank statements and receipts to see if you have accounted for all your expenses. Pay attention to bills that get paid automatically that you might have missed, like gym memberships.

  • Did you make any serious errors and omissions in calculating your monthly income by using paychecks that include a lot of overtime? Your budget needs to be based on your regular, steady income sources before you can make an informed decision about debt consolidation.

Do the Math

You can get a quick preview of whether or not debt consolidation is a good debt relief option for you by doing a little math. Using the total amount of debt you came up with when you detailed your debts, divide that number by 60 months if you feel you might need five years to pay off all your debt. The result is the approximate monthly debt consolidation loan payment you would have during that period of time. The number is an approximation because it will be slightly higher or lower depending on the interest rate you get on your debt consolidation loan and whether or not any of your creditors grant you a reduction in principal. 

Review Your Mississippi Debt Consolidation Options

Before you apply for Mississippi debt consolidation, you should use the information you have put together so far, along with your budget, to review your debt consolidation options and narrow down the type of debt consolidation that is best for you. A few of the things you should take into account when making your decision include:

  • Are most of your debts secured or unsecured? If secured, then debt consolidation may not be a good option for you unless you have good enough credit to take out a new personal loan.

  • What is your credit score? Do you have good, bad or fair credit?

  • Some forms of debt consolidation require good credit like an unsecured personal loan. However, other forms of debt consolidation, like a DMP, do not.

  • How many credit cards do you have? Do you intend to consolidate your debts and then close them all? Or do you want to consolidate your debts but keep some of your credit lines open. If so, a credit card balance transfer may be what you are looking for.

  • Do you have a lot of high interest rate debt? If lowering the interest rate on your debts is the most important factor for you in a debt consolidation then refinancing your mortgage, or a home equity line of credit might be a great option.

Apply for a Mississippi Debt Consolidation Loan

If you choose to apply for your Mississippi debt consolidation loan, here are a few tips to keep you from being taken advantage of:       

  • Don’t overlook your local bank or credit union. If you have good credit or some form of collateral you may be able to get good terms on a debt consolidation loan.      

  • Avoid direct mail offers. Despite the claims made in most direct mail advertisements, many of the terms and conditions advertised have a lot of preconditions or are simply false.

  • Look for brick and mortar lenders. If you do decide to respond to a direct mail offer only deal with lenders who have brick and mortar locations where you can apply for your loan.     

  • Never “pay” for a loan upfront. If a lender indicates you have been approved for a loan but need to pay a fee upfront before the funds are released, do not do it. Legitimate lenders only get paid after they have provided a service.

  • Do not give out your personal information over the phone or cash unsolicited checks received in the mail. Both of these actions expose you to fraud.

How to Stay Current with Payments After Consolidating Your Debts in Mississippi   

After you have consolidated your debts in Mississippi, there are few things you can do to make sure you stay current with your debt consolidation payments:

  • Make your payment early. Making your debt consolidation payment early reduces the chance that you will use any income you have available to meet an alternative financial need.

  • Set aside funds for large, one-time expenses that occur throughout the year like tax payments, vehicle registration and tuition. Otherwise, it’ll be harder to make your debt consolidation payment because you’ll be racing to pay these other expenses.        

  • Set your own due date. Ask your credit counselor if you can set the due date for your debt consolidation loan so it does not fall on the first or last day of the month when other large expenses are probably due.

  • Reward yourself. Treat yourself to small rewards as you make regular payments as an incentive to successfully complete your debt consolidation.

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Mississippi Debt Management Plan

A Mississippi debt management plan is a form of debt consolidation that you can qualify for whether you have good credit or bad credit. A debt management plan consolidates all of your eligible debts into one single monthly payment. Once a month you make your monthly DMP payment to an agency that distributes the funds to the creditors per the terms of your debt management plan. Your DMP may generally also feature a lower interest rate, extended repayment terms and waived over-the-limit and late payment fees. 

Mississippi Debt Settlement

An alternative to debt consolidation is something known as Mississippi debt settlement. Mississippi debt settlement does not consolidate your debts. Instead, a debt settlement company attempts to resolve the balance of your debt with individual creditors for less than you owe on them. Debt settlement is risky because many debt settlement companies will instruct you to intentionally stop paying your bills so your creditors are more likely to settle with them. However, your creditors are not required to settle your debts for less than they are owed, and many will not. If this happens, your credit score will be negatively impacted and your debts will remain unmanageable. 

Mississippi Bankruptcy

As attractive as debt consolidation may be, if you have little or no income or you are sick and unable to work, debt consolidation will probably not work for you. Instead, a Mississippi bankruptcy may be the best debt management and debt relief option available to you. Bankruptcy allows you to legally eliminate or restructure your eligible debts even if you have little or no income. To learn more about filing bankruptcy in Mississippi, contact Upsolve today.

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