Before filing for bankruptcy, you want to know whether you can keep valuable property—especially your home. If you qualify to use the Mississippi homestead exemption, you'll be able to protect some equity in your house. In this article, we explain:
For more information, read How to File for Bankruptcy in Mississippi. Not only does it explain the process, but you'll find helpful checklists and a link to an interactive bankruptcy quiz. Or, for a comprehensive bankruptcy guide, try What You Need to Know to File for Bankruptcy.
Under the Mississippi exemption system, a homeowner can exempt up to $75,000 of equity in a home on less than 160 acres. For example, let's say your house is worth $100,000. You have a $30,000 mortgage on the property, leaving $70,000 of home equity. If you file bankruptcy, your equity will be fully exempt using the Mississippi homestead exemption. Your creditors won't be able to touch your equity, and you will keep your home.
The Mississippi homestead exemption also protects insurance proceeds from condemnation (for 18 months) or the home's sale. You can also safeguard up to $30,000 of equity in a mobile or manufactured home in which you reside if you own the land it's on, too. However, you can't combine this exemption with the personal property exemption to protect a manufactured home. (Miss. Code Ann. § 85-3-1(d).)
Married couples filing a joint bankruptcy can double the homestead exemption only if they live in separate residences. (Miss. Code Ann. § 85-3-21.) However, property held as a tenancy in the entirety might be fully exempt. If you own property this way, consult with a local bankruptcy attorney.
You can learn about the advantages and disadvantages of joint bankruptcy filings in Filing Considerations for Married Couples.
You can file for bankruptcy in Mississippi after living there for more than 180 days. However, you must live in Mississippi much longer before using Mississippi exemptions—at least 730 days before filing, to be exact. Otherwise, you'd use the previous state's exemptions.
But suppose you weren't living in any particular state during the two years before filing for bankruptcy. In that case, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing. (11 U.S.C. § 522(b)(3)(A).) Learn more about filing for bankruptcy after moving to a new state.
Some states allow bankruptcy filers to use federal bankruptcy exemptions instead of state exemptions. Mississippi isn't one of those states. If you reside in Mississippi, you must use the state exemptions (but you can protect more with Mississippi's homestead exemption than the federal exemption).
In Mississippi, you can file a homestead declaration form with the county recorder's office. Filing the exemption puts your right to a homestead exemption on record, but it is not required before filing for bankruptcy. Contact your county recorder for information on how to file a homestead declaration.
Mississippi's homestead exemption is found in the Mississippi state statutes at Miss. Code Ann. § 85-3-1 and Miss. Code Ann. § 85-3-21. To learn how to find state statutes, check out Nolo's Laws and Legal Research area.
Updated May 26, 2021