September 16, 2020 / Jeffrey Kelly
Do you remember where you were when you first realized that Covid-19 was going to alter the course of your entire life? I remember the restaurant. I remember the smells. I remember the family members that were sitting with  me.
March 2020 was the strangest month of my life. How do you really prepare for a national shutdown? Do you remember the empty shelves at the grocery store? This past six months have seemed like such a strange bad dream.
What do we do now? Lay down and give up? You can’t. People are depending on you. We have to move forward. For many people in this country, bankruptcy is going to be a good tool to help bounce back.
After Covid-19 hit, over 40 million people in this country lost their jobs due the shutdowns. While the stimulus money helped, lots of people still missed many months of mortgage payments and car payments. The good news is that Chapter 13 can help people catch up on the past due payments. Chapter 13 stops the foreclosure of your home. Chapter 13 stops the repossession of your car.
This past week, NBC news reported that the unemployment rate has fallen back into the single digits for the first time since the pandemic began and that over 1.4 million jobs were added to the economy last month. Things seem to be heading in the right direction.
Georgia courts were shut down in March due to the pandemic. In mid-September, they fully reopened. I suspect that there is about to be a huge deluge of garnishment orders coming down the pipe. Unfortunately, most people wait until the very last second to do anything about a garnishment.
Georgia garnishment law is brutal. Once a creditor obtains a judgment against you, they can take 25 percent of your net paycheck. The good news is that Chapter 13 can stop the garnishment as soon as we get a bankruptcy case number.
To illustrate how Chapter 13 and Chapter 7 can help people bounce back from Covid-19, I would like to tell a story about a young couple I recently spoke with. To protect their privacy, I will alter some of the facts of the case. This young couple has three children. Before Covid-19 hit, they both worked full time jobs. After the pandemic hit, their local daycare completely shut down. In addition, their local elementary school also closed and moved everything online. With no one to watch the kids, they decided in their particular situation, it would be best for the wife to quit her job because the husband was earning more.
About a year ago, they both realized that the minimum credit card payments they were making were slowly slipping out of their reach. To their misfortune, they heard a debt settlement commercial on the radio that promised the moon and the sun. They called the phone number, set up a payment plan and assumed all was well until the sheriff showed up.
A few weeks ago, to their horror and dismay, the local sheriff pulled up into their driveway while they were playing in the front yard and served them with a collection lawsuit. At first, they thought that there must have been some kind of misunderstanding. Then, they called the debt settlement company only to discover that most of the money they had paid out over the past year went to the fees of the debt settlement company (I hear the exact same story from clients all the time). Furthermore, they learned that they debt settlement company had zero legal means to prevent the collection lawsuit.
In contrast, when a person is in an active Chapter 13 case, no one can file a lawsuit against you. Creditors cannot call, garnish, or bother you while your case is live. You get great protection from the bankruptcy court.
This young couple was extremely frustrated to learn that they had essentially wasted a year with the debt settlement company. The good news is that we were able to get their house and cars protected with a solid Chapter 13 plan. Also, we were able to eliminate all of their credit card debt.
Chapter 13 helped this young couple and I believe it is going to help thousands of consumers in Georgia bounce back from Covid-19.