Northwest Georgia Bankruptcy Attorney &#187; Ch 13

4. How do I stop a garnishment?

5. How do I stop a foreclosure?

Bankruptcy And The Problem With Receiving Christmas Gifts

Jeff Kelly, Esq. — Tue, 22 Nov 2011 13:04:19 +0000

I know this sounds really strange but a bankruptcy case can get really messed up sometimes because of Christmas gifts. I absolutely love Christmas and I don’t like the Grinch but it is my job to tell you truth about how Christmas can really wreck a case.

Let me give you an example. Let’s say you have a married couple who is going through a difficult financial situation. Their parents decide to help them out during this Christmas season by giving them $5,000.00. I realize that very few people ever get this kind of gift from their parents but you would be surprised how often this happens when parents see their children struggling.

The problem is that this $5,000 gift must be counted on the median income test. Everyone who files for bankruptcy must list all of their income for the six month period that precedes the date of the filing of the case. Thus, if you receive the gift in December and we file your case in December, then this income won’t count because this six month period that matters is June through November.

However, most people delay filing bankruptcy until the last possible second. As a consequence, most people who receive gifts of money from their parents don’t file until a few months later.

Sometimes, even a small gift can mess us up on the median income test. For example, if you are right on the border of going over the median income test, a small cash gift may be just enough to change your three year Chapter 13 bankruptcy into a five year Chapter 13 bankruptcy.

What is the solution? The solution is to meet with me before you take the gift so that we can see where you land on the median income test.

In addition to the median income test, we need to take a look at the value of your assets. Under Georgia bankruptcy exemptions, you can claim up to $5,600 of a wildcard exemption to protect cash gifts. However, you may need this wildcard exemption for some other asset like your house.

If you have more than $10,000 equity in your house and you are a single filer, you most likely will not have any wildcard exemption that will be left over after you file bankruptcy.

Take advantage of a free consultation with me and call 706-295-0030 so that we can sit down and review your entire economic situation.

Other Posts:

4. How do I stop a garnishment?

5. How do I stop a foreclosure?

Will Chapter 13 Bankruptcy Help Me Get My Car Back in Georgia?

Jeff Kelly, Esq. — Tue, 30 Aug 2011 10:00:57 +0000

If your car was repossessed within 10 days of the filing of your case, Chapter 13 bankruptcy may help you get your back.

Many Georgia consumers depend on their car to get them back and forth to work. Public transportation for all intents and purposes does not exist for 99 percent of the people who live in Northwest Georgia. When the car gets repossessed, this means you will have no way to get to work. In most companies, you will be quickly fired if you don’t show up.

The good news is that Chapter 13 may help you get your car back.

This past week, I met with a Dalton GA bankruptcy client who was a few months behind on her car payment. She had been behind before and thought the car company would let her make up the payments again. However, things did not work out like she had planned. At about two a.m., she heard the roar of a tow truck pulling her car away. She had trouble sleeping the rest of the night knowing that she had no way to get work the next morning. Fortunately, she was able to call a friend the next morning and get a ride to work.

While at work, a coworker explained to her that she might be able to file Chapter 13 and get her car back. As a result, she made a call to my office and we were able to meet with her the same day. In her situation, we filed the case one day and got her car back the next.

Under Georgia law, a car creditor has to give you ten days notice before they sell your car at auction. Once your car is sold at auction, it’s gone forever. In Georgia, if a car creditor sells your car without giving you the 10 day notice, they will not be able to collect a deficiency against you.

If your car creditor is still in possession of the vehicle at the time we file your Chapter 13 bankruptcy case, they must give the car back to you. If they sell the car after they have knowledge of your Chapter 13 bankruptcy case, they will be in violation of the bankruptcy laws and will subject themselves to the wrath of the bankruptcy court. It is an absolute must that your car creditor receive a notice that the bankruptcy was filed before they sell it.

If your car has been repossessed and you are trying to get it back with Chapter 13, it will help your bankruptcy attorney if you provide him with the phone number and the fax number of the automobile creditor. Your account number is also a huge help as well. You must have full coverage insurance on your vehicle if you want to get it back. If the car is not insured, they don’t have to give you the car back until you obtain proper insurance.

If you would like to explore the option of getting your car back, call me today at 706-295-0030. If you wait too long, we may not be able to get it back.

4. Stop Garnishment

5. Stop Foreclosure

Can Chapter 13 Protect the Car From Repossession If I Just Bought It?

Jeff Kelly, Esq. — Tue, 16 Aug 2011 10:00:04 +0000

As a general rule, Chapter 13 bankruptcy protects you from repossession of your car. However, what happens if you just bought the car right before filing bankruptcy? The answer to this question in Northwest Georgia is that it depends on the facts of your case.

For example, let’s say you bought a car six months before filing. The reason you filed is because you lost your job after you bought the car but now have found a new job. After your bankruptcy case is filed, your car creditor files a Motion for Relief from the Automatic Stay so that they can get permission from the Bankruptcy Court to get your car back. I don’t think that under this kind of fact scenario that a bankruptcy judge is going to allow the car creditor to repossess your car as long you have maintained insurance on it and you need the car for a legitimate reason like going back and forth to work. Furthermore, six months is long time.

Another important question to answer when analyzing car situations is what is the percentage of debt that your unsecured creditors will receive in your Chapter 13 plan? For example, if you are paying back all of your debts at 100 cents on the dollar, you are going to be able to keep the car. When you are wiping out all of your unsecured debt in your Chapter 13 plan, your bankruptcy attorney will have to look at your situation carefully to make sure you will be able to keep your car.

In this next example, I want to paint a picture where I think a judge most likely would grant a Motion for Relief so that a car creditor could take the automobile. Let’s assume you have a person who bought a car two months before filing. Also, assume that this person has never made a single payment on the car. Furthermore, assume that nothing in this person’s economic situation has changed since the car was purchased. With these types of facts, I think a bankruptcy judge will most likely consider it to be abusive to the car creditor to prevent them from repossessing the car. If a situation smells bad to an average person, it’s going to smell bad to a bankruptcy judge as well.

Every case is fact specific. There are always exceptions. For example, in some bankruptcy cases, the cause of filing is a creditor who has filed a lawsuit so that they can garnish their wages. A person who is now facing garnishment clearly has suffered a change in circumstances since the purchase of the automobile.

If you have recently purchased a vehicle and you are afraid that it will get repossessed if you file bankruptcy, I strongly encourage you to sit down with an experienced bankruptcy attorney who can review your entire situation.

Other Posts:

4. Stop Garnishment

5. Stop Foreclosure

Georgia Bankruptcy Attorney on Financed Cars in Chapter 13

Jeff Kelly, Esq. — Wed, 10 Aug 2011 02:22:29 +0000

When you file Chapter 13 bankruptcy in Northwest Georgia, your financed car will be paid through the plan. For many debtors, this can drastically lower your monthly bills. Many bankruptcy clients have difficulty understanding that their car payment is included in the Chapter 13 plan. As a Northwest Georgia bankruptcy attorney, I love it when the light comes on and it becomes clear to the client that Chapter 13 is going to provide some huge relief.

I would like to walk you through an example of how financed cars are treated in a Chapter 13 bankruptcy. Let’s say you have a person from Dalton, Georgia who owes $10,000.00 on a financed vehicle that was purchased more than 910 days before the filing of the case. Also, assume the interest rate is twenty five percent and that the vehicle is worth about $5,000.00. Believe or not, there are many people in Dalton who pay twenty five percent APR on their vehicles.

The first benefit that this hypothetical person will receive in bankruptcy is a lower interest rate. As a general rule, this interest rate will be around six percent. Right off the bat, this person will save money in a Chapter 13 bankruptcy case.

The next huge benefit is that this person will pay the value of the car instead of the amount owed. In this case, this Dalton resident will pay $5,000.00 in a Chapter 13 plan instead of the $10,000.00 that is owed per the contract. Thus, not only did the interest rate get knocked down but the balance to be paid is knocked down as well.

Once the case is completed, this Dalton filer will receive the title. However, if the case is ever dismissed for any reason, all of the contract interest and contract balance comes back to life.

If the car has been purchased within the 910 day period before filing, the entire contractual balance will have to be paid. We can still lower the interest rate but if you made a bad deal on the purchase price, Chapter 13 is not going to help you out of it unless you surrender the car to the creditor so that we wipe out the debt.

Other Posts:

4. Stop Garnishment

5. Stop Foreclosure

Chapter 13 Bankruptcy – 7 Ways Your Life Will Improve After Filing

Jeff Kelly, Esq. — Tue, 12 Jul 2011 10:00:48 +0000

Some people believe that a Chapter 13 bankruptcy will be a miserable experience. The truth is that for most people, it’s a huge relief because it ends the pressure from your creditors. Below, I’ve listed the top seven ways your life will improve after you file Chapter 13 bankruptcy.

1. The phone calls from creditors will stop. Any creditor that calls you after your case has been filed is violating the automatic stay As a consequence, if they keep calling your after your case is filed, they are breaking the law.

2. The foreclosure stops. The thought of losing your house is scary. Without bankruptcy, you are totally at the mercy of your mortgage company when you are behind on your house payments. After filing Chapter 13 bankruptcy, the foreclosure stops the second your case is filed. We do not need permission from your mortgage company.

3. The garnishment stops. Losing 25 percent of your net income is impossible to bear for most people. Unfortunately for the citizens of Georgia, a creditor can garnish up to 25 percent of your disposable wages. With Chapter 13, you don’ t have to worry about this. Once your case is filed, we need to fax a judicial order to your payroll department to get it stopped.

4. The lawsuit stops. Knowing that you have a deadline to respond to a lawsuit can be extremely stressful. Once you file Chapter 13 bankruptcy, we take care of that for you. You won’t have to worry about the lawsuit once your case is filed.

5. The interest rate on credit card debt is lowered to zero percent. Without bankruptcy, most people pay between 25-30 percent interest on their credit cards. For many people, its a struggle just make the interest payments. In contrast, people who file Chapter 13 have the peace of knowing that there is light at the end of the tunnel.

6. The late fees stop. Getting nailed by a late fee is so frustrating. Your money just goes up in smoke. With Chapter 13, the late fees on your credit cards completely stop.

7. The interest rate on your car note is lowered. In Dalton Georgia, its not uncommon to see an interest rate as high as 30 percent. I see rates this high in the Rome, Cartersville and Dallas areas as well. Many people pay back more in interest than the purchase price for the car! With Chapter 13, we can lower the interest to around six percent in most cases.

There is light at the end of the tunnel.

Other Posts:

4. How do I Stop a Garnishment in Georgia?

5. How do I Stop a Foreclosure in Georgia?

6. What do I need to bring to my first meeting?

Chapter 13 Bankruptcy – Who is the Trustee?

Jeff Kelly, Esq. — Mon, 27 Jun 2011 11:50:15 +0000

In Chapter 13 bankruptcy, who is this mysterious player called the Chapter 13 Trustee?

The Chapter 13 Trustee is an attorney who is hired by the United States Bankruptcy Trustee to basically ensure that everyone is playing by the rules. In addition, the Chapter 13 trustee is the person who collects money from the debtor and distributes it to creditors.

The Chapter 13 trustee gets paid by collecting roughly 5.5 percent of the debtors Chapter 13 payment as a fee.

In the Northern District of Georgia in the Rome division, we are blessed with a very nice Chapter 13 Trustee named Mary Ida Townson. She does not ridicule or harass people who file for bankruptcy. However, if any debtor tries to game the system or pull a fast one, she will not hesitate to lower the boom.

A debtor’s first interaction with the Chapter 13 trustee is the 341 meeting of creditors. In the Rome division of the Northern District of Georgia, this meeting takes place on the first floor of the Federal Building in downtown Rome approximately 30 days after the case is filed.

During this hearing, it is not uncommon for the trustee to announce her objections to the Chapter 13 bankruptcy case. In most cases, these objections can easily be fixed after the debtor meets with their bankruptcy attorney.

During this hearing, it is important that the debtor remembers to answer questions with a clear “yes” or “no” so that the recorder can pick up the answer. As a general rule, the trustee will want simple short answers to her questions. When she wants more detail, she will clearly ask for it.

Many Chapter 13 debtors come to court feeling extremely nervous. “When I say, there is no need to be nervous,” I usually get the response, “Hey, that is easy for you to say because you come to bankruptcy court all the time.”

However, the reason most people feel nervous is because they are afraid that some mysterious controversy will arise out of nowhere and sink their case.

The reason this will not happen to my clients is because I believe that every debtor should spend at least two hours with their bankruptcy attorney reviewing the bankruptcy petition before the case is filed. It is imperative that both the debtor and their bankruptcy attorney carefully review every single page of the petition. If there is something that will blow up your case, we will find it before the case the is filed.

When you carefully review everything before filing a case, there will not be any surprises when you go to court and meet your Chapter 13 bankruptcy trustee.

1. Tell your bankruptcy attorney everything.

2. Should I sign my house over to someone before I file bankruptcy?

3. What is Chapter 13?

4. How much does it cost to file bankruptcy?

Chapter 13 Bankruptcy and Insurance Claims In Georgia

Jeff Kelly, Esq. — Thu, 05 May 2011 10:11:14 +0000

Anyone who has an active Chapter 13 bankruptcy must understand that any distribution of insurance proceeds in Georgia must be approved by the Bankruptcy Court. In April 2011, Northwest Georgia was ravaged by tornadoes. Many people in Ringgold, Rome, Calhoun and Cave Spring had serious damage to their houses. Some people lost their home altogether.

If your house was damaged and you intend on filing a claim with your insurance company, the first step is to speak with the insurance adjuster. They will come to your house and give you an estimate as to how much it will cost to fix it.

The next step is for you to find a contractor that will make the repairs. You should get at least three estimates from contractors and make sure you check their references. The local newspapers are already reporting that many scammers are going door to door in hard hit areas and trying to rip people off.

Once you have your contractor lined up, your insurance company will issue you a check. In most cases, the check will be made payable to you and your mortgage company.

Call your bankruptcy attorney and make sure they are aware of every step in the process. If you have temporarily moved to another location, I need to know so that I can forward you any notices we may receive from creditors or the Court.

At this point, we want to file a Motion To Distribute Insurance Proceeds with the Bankruptcy Court. In this motion, we need to know the amount of insurance proceeds that you will receive and the total cost of repairs. It will usually take 30 to 45 days to get approval from the Court. Once an order is signed by the bankruptcy judge, everything can move forward.

If you don’t get court approval of the distribution of the insurance proceeds, most mortgage companies will not sign the sign the check. As a result, this can cause a major headache and slow things down for you and your contractor.

When you do it correctly from the beginning, you will save yourself some time and things will flow much more smoothly.

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