Dalton

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

by Jeff Kelly, Esq.

in Ch 13

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.

1. What is Chapter 13?

2. What is Chapter 7?

3. How much does it cost to file?

4.  Stop Garnishment

5.  Stop Foreclosure

Is Retirement A Factor When Considering Bankruptcy?

by Jeff Kelly, Esq.

in Georgia Bankruptcy

When considering bankruptcy, retirement should definitely be taken in account.

I meet with quite few potential bankruptcy clients in Dalton, Dallas, Cartersville and Rome, Georgia who reluctantly come to my office and resist the idea of bankruptcy even though economic reality demands it.  The tide usually begins to shift when we start talking about retirement.

Sometimes, I ask the question, “How soon do you plan on retiring?”

The potential bankruptcy client usually responds, “To be honest, I haven’t really thought about it.  I get at least 10 nasty creditor calls a day which stresses me out so bad that all I can think about is this debt problem.”

“Why not wipe out the debt problem and start focusing on a retirement plan?”  I will respond.

Many clients become more open to the idea of bankruptcy when they start to contemplate retirement.  When both a husband and wife are working full time, a married couple might be able to squeak by each month and make that minimum credit card payment.  However, once one of them retires, reality hits.  Half the income is gone but the bills are the same.  Actually, with twenty-five percent interest on credit card debts, they can grow rapidly.

I’ve heard many clients say to me, “I wish I had filed this case years ago.  I’m about to retire and I have no savings.”

A most disheartening situation is when a person empties out their 401k account to make payments on credit card debt.  Under Georgia law, your retirement account is 100 percent protected from your creditors.  Why would you ever want to take a protected asset and convert into cash so that you can pay a debt that could have been wiped out in a bankruptcy?

Everyone knows that you can’t retire on social security alone.  You must have some savings to cover medicine and other medical expenses.

Busting your tail to pay twenty five percent interest on your credit card debt instead of funding your 401k retirement account just isn’t smart.  Make funding your 401k a priority and if you there is nothing left for the credit card companies, you need to come see me soon.

Related Posts:

1.  Can I Keep Contributing to My 401k After I File Bankruptcy?

2.  Don’t borrow against your 401k to pay off credit cards or medical debt!

3. What is Chapter 13?

4. What is Chapter 7?

5. How much does it cost to file?

What Falling Home Values Mean to Homeowners in Georgia

by Jeff Kelly, Esq.

in Georgia Bankruptcy

As everyone in Georgia knows, home values have been falling this past year. On the down side, this means that borrowing on the equity of your home is difficult  and if you are trying sell, you may not be able to get the price you need.

People all across Northwest Georgia, from Dalton to Rome, Cartersville, Hiram and Dallas have gasped in agony at the tumble in home values.

From a bankruptcy perspective, falling home values have helped many debtors.  The biggest upside to falling home values is that it gives many Chapter 13 debtors the opportunity to eliminate their second mortgage on their homes. If your house is worth less than what you owe on the first mortgage, you can eliminate the second mortgage in a Chapter 13 bankruptcy case. For a more detailed explanation of how this process works, click here.

Another upside of the falling homes values is that Chapter 7 bankruptcy has become much easier for many debtors.  During the housing boom, there were many debtors who needed to file for bankruptcy but could not do so because they had too much equity in their homes.  For example, married couples with more than $20,000 equity in Georgia should not file Chapter 7   In situations where the equity exceeds what can be protected by Georgia law, a Chapter 7 trustee can put a house up for sale and use excess proceeds to pay creditors.

During the housing boom, it was not uncommon to see a Chapter 7 trustee challenge the value that a debtor listed on their home.  Today, with the tremendous drop in housing values, I not personally seen trustee challenge the home values listed on the bankruptcy petition.

A great place to start when trying the determine the fair market value of your home is your tax assessor.  Take a look at your most recent tax bill.  How much did they list as the estimated fair market value?  In the past, we could not rely on this value but most tax assessors had underestimated the fair market value.  Today, this is no longer the case.

I had a recent bankruptcy case where the county tax assessor had actually overvalued the property by $40,000.00.  In this particular case, the debtor obtained an expert appraisal and overcame a creditor objection.

If you would like to explore your bankruptcy options, please do not hesitate to call me at 706-295-0030.

Related Posts:

1.  How do I wipe out my second mortgage in bankruptcy?

2. What is Chapter 13?

3. What is Chapter 7?

4. How much does it cost to file?

 

Cosigner Did Not Pay The Debt – What Now?

by Jeff Kelly, Esq.

in Georgia Bankruptcy

When a cosigner does not pay a debt, the bottom line is that the creditor will now be coming after you.

The story usually goes something like this.  Daughter’s car broke down on Walnut Avenue coming home from grocery store.  The engine fell out and now she is desperate for transportation.  Her old car had to be junked.  Now, she can’t get back and forth to her job at the mall in Dalton without a car.  Then, she finds this really nice car dealer who will sell her the car of her dreams but…………she needs a cosigner.

Mom does not want to cosign the loan but daughter begs.  Mom has great credit and knows that her daughter has trouble holding down a job.  Mom has also heard stories at work from people who got into financial trouble because they cosigned a loan with a friend or family member.

As a mother will almost always do (even though I advise them against it) they consign the loan for their child’s dream car.  You already know where this story is going.

Daughter gets into a fight with her boss at the mall in Dalton and gets fired.  Now, she can’t make any of the car payments.  As a consequence, the car gets repossessed.  Pursuant to Georgia law, the car is then sold at a public auction for a fraction of what it is really worth.

Now, the dealer files a lawsuit in Whitfield County Superior Court to collect on the remaining balance of $15,000.00.

What are the options for dealing with this cosigned nightmare debt?

Option #1: Mom makes arrangements with creditor to pay the debt in full.

Option #2:  Both Mom and daughter can file separate Chapter 7 bankruptcy cases to eliminate the debt.  If only the daughter files for Chapter 7 bankruptcy, the creditor will still be able to go after the mother.

Option #3:  If either the daughter or mother files for Chapter 13 bankruptcy, the debt can paid in the Chapter 13 plan.  As long as the debt is paid at 100 cents on the dollar along with applicable contract interest in the bankruptcy plan, the nonfiling cosigner will be protected from lawsuits and harassment.

It never hurts to explore your options.  If you are dealing with a cosigned debt problem, call me today and lets see if we find a solution that will work for you.

Related Posts:

1.  What is Chapter 13?

2.  What is Chapter 7?

3.  What is the Means Test?

4.  How much does it cost to file bankruptcy?

Rising Used Car Prices Will Impact Bankruptcy Cases In Georgia

by Jeff Kelly, Esq.

in Georgia Bankruptcy

The recent rise in used car prices will impact both Chapter 13 and Chapter 7 cases in Georgia.  The Wall Street Journal recently reported that “prices for used cars hit a record high in April and are poised to go even higher as production cutbacks during the recession and the more recent Japanese earthquake has made used vehicles a hot commodity as dealers dive into the depleted pool for cars to fill their lots.”

The rising used car prices will change the battleground in Chapter 13 bankruptcy cases.  In the past, bankruptcy debtors and car creditors have argued over how much the car will depreciate after the bankruptcy case is filed.  Chapter 13 plans are required to pay a car creditor a monthly payment that will protect the creditor from losing value of their collateral from depreciation.  These payments are called adequate protection payments.  Since most used cars are now increasing in value, debtors won’t be required to make large adequate protection payments like many have in the past.

Instead of arguing over depreciation, I predict that car creditors in Chapter 13 bankruptcy cases will focus more on the value of the car.  In many bankruptcy cases, a Chapter 13 debtor will underestimate the value of their car.  A great place for you see how much your car is worth is NADA.com.  In cases where the car was purchased within 910 days of the filing of the bankruptcy case, the value will not matter because the bankruptcy code requires that this type of claim be paid in full.  In contrast, debtors are required to pay only for the value of the car and not full amount owed when the car was purchased more than 910 days from the date of filing.  In cases where the car was purchased more than 910 days from the date of filing, creditors are going to push for the highest value they can to maximize their recovery.

In Chapter 7 cases, I think we might start seeing some creditors refuse to allow the debtor to reaffirm the debt.  I’ve seen this happen with some used car dealers in Dalton, Georgia.  Nothing in the bankruptcy code requires a car dealer to participate in reaffirmation agreements.  If they want, they can file a motion for relief from the automatic stay and then go get the car after the order is entered.  With high demand for used cars, repossessing the car and selling it auction becomes more appealing.

One of the appeals of Chapter 7 is the fact that you can surrender an expensive car to a creditor and then go buy a cheaper replacement after your bankruptcy is discharged.  Rising used auto prices will make this more difficult.  In some cases, it might make more sense to keep the current car and pay for it at a lower interest rate in a Chapter 13 bankruptcy.

If you would like to explore all of your bankruptcy options, please call me today at 706-295-0030 for your free consultation.

Related Posts:

1.  What is Chapter 13?

2.  What is Chapter 7?

3.  When is it better to file a Chapter 13 instead of a Chapter 7 bankruptcy?

4.  How much does it cost to file bankruptcy?

Dalton Chapter 13 Bankruptcy? Attorney Gives 3 Tips For Success

by Jeff Kelly, Esq.

in Ch 13,Georgia Bankruptcy

During the past few weeks in Dalton, Georgia, I’ve seen an increase in Chapter 13 bankruptcy issues. Perhaps it is the struggle of the Dalton carpet industry that is the source of these bankruptcy issues.  Maybe it is the high unemployment rate in Dalton and the large number of foreclosures that have taken place in Whitfield county and the surrounding areas.  Regardless, my office seems to be receiving an increase in Chapter 13 cases from the Dalton area.

While my main office is located in Rome, Georgia, I also have a satellite office in Dalton on West Crawford Street (I also have satellite offices in Dallas and Cartersville as well).  To help our many Dalton bankruptcy clients who are interested in investigating whether Chapter 13 might be a good option to resolving their bill problems, I’ve listed three tips for a successful bankruptcy case.

1.  Educate Yourself Before the Appointment.  In my website, I have written over 150 articles on the subject of consumer bankruptcy.  Reading up on the subject before the appointment will help you ask good questions as to how the laws apply to your specific situation.  Hopefully, these articles will help dispel any misinformation about bankruptcy that you may have heard from friends or coworkers.  On the lower right hand side of my homepage, there is search box where you can type in your question to see if I’ve written an article on your question.  If you can’t find it, please email me your question and I will try to write an article that addresses your general question.

2.  Make a list of all your debts.  In this list, we need the name of your creditors, the mailing address, the account number and how much you owe.  Credit reports are a great source of this type of information but the problem is that some creditors in the Dalton area won’t report to any credit agency.  For example, many finance companies and small car lots will never report to any credit agency.  You and your stack of bills are the best source of a creditor list for your bankruptcy case.

3.  Collect your paystubs for the past six months and take a look at your monthly expenses. When we meet, I will help you analyze your income flow and your monthly expenses.  With this analysis, we will be able to come up with a Chapter 13 plan that works for you.

I look forward to meeting with you soon.

Related Posts:

1.  What is Chapter 13?

2.  What is Chapter 7?

3.  What is the Means Test?

4.  How much does it cost to file bankruptcy?

Consumer Bankruptcy News Reports on Foreclosure Crisis

by Jeff Kelly, Esq.

in Ch 13,Foreclosure,Georgia Bankruptcy

The foreclosure crisis was supposed to end with help from the federal government. Consumer Bankruptcy News reports in the May 6, 2010 issue that the response of the federal government to the mortgage crisis is too slow.  The article reports that is has “been more than one year since President Obama announced the establishment of the Making Home Affordable initiative that included the Home Affordable Modification Plan.”  The plan was supposed to help between 7 and 9 million families restructure their mortgages and save their homes from foreclosure by the mortgage companies.  The article goes on to report that “the actual number of homeowners who have received final, five-year loan modifications through the program administered by the U.S. Department of the Treasury stands at 168,708.

The Congressional Oversight Panel’s April 2010 report entitled, Evaluating Progress of Tarp Foreclosure Mitigation Programs, “finds that Treasury is still struggling to get its foreclosure programs off the ground even as the crisis continues unabated.”  The report also states that in 2009, 2.8 million homeowners received a foreclosure notice,and one in four homeowners with a mortgage currently has negative equity. While housing prices have begun to stabilize in many regions, home values in several metropolitan areas continue to fall sharply.”

I have personally witnessed in my Dallas, Rome, Cartersville and Dalton Georgia office locations that consumers are not getting the promised federal help they need to stop the foreclosure of their homes.  While I have seen a few loan modifications approved even after my clients have filed Chapter 13, most loan modification applications have been denied.  I have been shocked how many mortgage companies are aggressively pursuing foreclosure in this dreadful market.

The good news is that Chapter 13 stops foreclosure   In a Chapter 13 bankruptcy, we can eliminate credit card debt and medical debt.  As a result, most consumers find it much easier to make their future mortgage payments when they no longer have worry about their past due credit card debts and medical debts.