Month: February 2019

Bankruptcy: Don’t Make These 6 Mistakes

The prospect of filing for bankruptcy protection is a serious decision that isn’t to be taken lightly.  Generally speaking, if you file bankruptcy the right way it will have very profound positive impacts on your life and allow you to restructure your finances in a viable way going forward. However, if it isn’t done correctly you can find yourself fighting for years to come to clean up the messes and mistakes of a failed bankruptcy. Often, we see people who come through our office who have experienced such failed bankruptcies and we are stuck cleaning up an expensive mess made by unqualified attorneys who filed things incorrectly or simply didn’t know what they were doing. Below, I list the top 6 mistakes that people commit when filing for bankruptcy,

They go to a “BIG BOX” bankruptcy firm  to file their case.

There are many great attorneys out there that work for these “big box” firms and they are wonderful, caring people. The only problem is, when you’re looking at these firms, you often have somewhere between five and ten attorneys juggling 150-200 or more cases a month. The long and short of this is, they can’t ever get to know your case PERSONALLY. They will pass everything off to a secretary or paralegal that just files the paperwork and never takes the time to actually get to know you and your case. Our office handles several clients a month who have had their case filed by a “big box” bankruptcy mill only to see it get dismissed because of some technicality or missed deadline by the untrained and overwhelmed staff. If you’re sitting in some rarely staffed satellite office or the waiting room has 50 chairs in it, you’re probably not going to get the personalized service you need and deserve. If getting good customer service from the same people ever time isn’t that important to you, you might be a good fit for a one of these types of firms.  The biggest difference between a “big box” firm and a local bankruptcy firm is service. You aren’t going to pay them any less in the long run but you definitely won’t have access to your attorney like you would going with a smaller firm.

Hiring an attorney that doesn’t have actual BANKRUPTCY experience.

They may be your buddy you went to high school or college with, they might be a general practice attorney that has been in the same spot for 40 years, they might even be $100 less than the bankruptcy practitioner up the street but don’t let them fool you. Bankruptcy laws change CONSTANTLY and the only people who keep up with those changes are the people who file bankruptcies on a regular basis.   Like doctors, attorneys specialize in certain aspects of the law because the law complicated and no one has time or the ability to be able to practice 10 different types of law, especially if they’re concerned about not making mistakes. Don’t end up being a lab rat for some attorney who THINKS they might be able to handle filing bankruptcies, your financial future depends on it.

Using a bankruptcy petition preparer service.

There’s an old adage out there that I love to use.  NEVER hire a discount plastic surgeon or a discount lawyer, the damage that a hack can potentially do just isn’t worth it. Hiring a petition preparer may be cheaper but it’s usually just an accident waiting to happen. While I list 6 major mistakes you can make, this one should probably be at the top of the list.   People often go through their case, sometimes for 5 years or more, thinking that everything is humming along smoothly.  Sadly, people often find out after the fact that a debt wasn’t reaffirmed correctly or paperwork was filed incorrectly. Petition preparers are just supposed to type and in the State of Georgia, they are not allowed to give legal counsel.  If something goes wrong, you have no recourse since you agreed that all they were doing was typing, it was your responsibility to handle everything else. We have cleaned up the mess of hundreds of people who used a petition preparer. These people often find themselves being investigated for fraud by the U.S. Department of Justice, facing the threat of losing a home they didn’t know they had equity in or even ending up in the wrong type of bankruptcy altogether.  Generally speaking, you can start a Chapter 13 for around $75 and a Chapter 7 for around that same price. There is literally no reason to not hire an experienced Bankruptcy attorney. In bankruptcy you’re dealing with the federal government and all its resources. Discount shopping for bankruptcy could leave you in a massive mess.

Not fully listing your assets.

When it comes to your attorney and your bankruptcy you have to tell the truth, the whole truth and nothing but the truth. If your name is on the title you absolutely HAVE to list it in your case.  Your trustee doesn’t care if it’s your grandmother’s car and she’s the only one who drives it, if your name is on the title you have to list it. Committing bankruptcy fraud is an actual criminal offense, thousands of people are investigated each year for bankruptcy fraud and hundreds of them go to FEDERAL PRISON each year for committing it.

Transferring property out of your name before you file.

Transferring a house or a car to someone else out of your name isn’t going to help you, in fact, it’s one of the biggest mistakes you’ll make. Trustees have broad investigatory power and they WILL look into your background.  If you sold your house to your aunt for $1,000 three weeks before you filed bankruptcy the trustee WILL find out. Sometimes transferring things isn’t a big deal but sometimes it is.  Only a competent attorney who specializes in bankruptcy can tell you which one is the case.

Paying debts to family members or friends before you file.

This is one of the biggest mistakes we see when people come in for a consultation. Obviously, you don’t want to stiff your Aunt Shirley out of the $500 bucks she loaned you to make the down payment on your car. Guess what, the court doesn’t care. In fact, if they find out you paid anyone off in full right before you filed bankruptcy whether it is a friend, family member of a title pawn, they’ll go after them to get that money back and distribute it to your creditors. Paying off one person while bankrupting on someone else is called a preference payment.  Preference payments are not legal. Meeting with a qualified attorney can help you understand this process and can also explain when a trustee can attempt to collect preference payments from friends and family member and when they can’t.

Speaking with a competent bankruptcy attorney in Newnan or LaGrange doesn’t cost a dime. Our attorneys will meet with you at a time that is convenient for you FREE OF CHARGE. We will do a complete examination of your financial situation and give you our recommendations for how to best meet your financial goals. Don’t make a major financial mistake that could haunt you for years to come.

Don’t Retire with Unmanageable Debt

Harmon and Gorove often works with clients who are looking to retire but are facing the prospect of retiring with overwhelming debt.  It often make sense for people who have significant debts to file bankruptcy before or during retirement but before you file there are many factors you need to take into consideration.

If you are a senior citizen who is looking to retire and who doesn’t have any assets you might consider stopping payments to your creditors. If you don’t own anything and your income is derived from social security, disability or other government program then creditors can’t garnish this money. While this will work for many people who do not have any recoverable assets keep in mind that doing nothing and just stopping your payments to creditors doesn’t actually eliminate your debt. The people you owe may still choose to send you letters, call you, and ultimately sue you. While it is possible for your creditors to obtain a judgement from you if your sole source of income is from social security or some other government disability the creditor can’t enforce the judgement against your income.

If you want to try to end the collection calls you can always reach out to your creditors and let them know you’d like to settle your debts for an amount less than you actually owe. In certain circumstances letting your creditors know you are on a fixed income and have little to no ability to repay them will cause them to negotiate with you to accept less than you owe just so they can actually get something out of you.  There are certain tax implications to debt forgiveness that can pop up so this isn’t the best option for everyone and every debt.

If negotiations fail or your creditor threatens you with a 1099-C your next step may be to file a Chapter 7 Bankruptcy. In filing a Chapter 7 bankruptcy you will discharge most, if not all, of your unsecured debt. You should always review your finances with an experienced bankruptcy attorney in your area to ensure that there are no other issues that could have an impact on your bankruptcy.  Much like social security and disability payments, most retirement accounts are protected from recovery by the trustee in your bankruptcy. This means that you can rid yourself of all your unsecured debt and still keep the money you may have stashed away in your IRAs, Roth IRAs, 401(k)s, 403(b)s, and Keogh plans.

If you are a senior citizen that has assets it is imperative that you meet with a competent bankruptcy attorney that can determine if a Chapter 7 will work for you or if you need to file a Chapter 13 case.  Debtors with assets must proceed with extreme caution when filing for Chapter 7 protection since certain assets can be liquidated and sold to repay your creditors by the Chapter 7 Trustee. Additionally, once you file a Chapter 7 you are not allowed to simply dismiss the case in the event you discover that you have assets that can’t be protected and that you may lose.  A competent bankruptcy attorney can go over what you have that is unprotected and review exemptions with you. Using this information you and your attorney can decide which path is best for you.

If you are like the nearly 80% of middle income seniors that are looking to retire and still maintain a significant debt load, DO NOT under any circumstances start pulling money out of your retirement accounts to satisfy your debts until meeting with a bankruptcy attorney.  We see people making this mistake all the time and once that money is gone, you’re not going to get it back. We often find that many senior citizens deplete their retirement savings trying to pay back debts that could have otherwise been taken care of completely in a Chapter 7 Bankruptcy or reduced significantly in a Chapter 13.  Don’t make a $500,000 mistake and put off your ability to retire any longer by depleting your savings to pay unscrupulous creditors. Contact the friendly attorneys at Harmon and Gorove for a free consultation to see what we can do to help make your retirement dreams come true.

Setting yourself up to fail: Filing “Pro Se” Bankruptcy

Yes, as with all legal matters in the United States, you are allowed to file for bankruptcy protection yourself and you can usually find the forms online or in a do it yourself workbook that you find at local bookstores or online. You are allowed to file “pro se” in bankruptcy court, just as in all other courts. As the saying goes though, just because you can do something, doesn’t  mean you should.

Bankruptcy Law is complicated.  It is a hybrid blend of the laws of the State of Georgia and Federal Government.  The amount of time you spend learning and researching the law, completing the mountains of forms and taking time off from work to appear in court pales in comparison to the extremely costly mistakes you can easily make by not hiring a competent bankruptcy attorney.

Bankruptcy Laws can vary from state to state

The books you purchase and forms you find in those books and online can make it seem to be a simple enough process, but that’s the point. It may even look like you will be saving some money by not hiring a competent debt relief attorney. However, the truth is quite the opposite. The laws are  very complicated. As mentioned previously, bankruptcy is a hybrid type of law that blends state law with federal law and what you can do in one state may not be what you can do in others. There is a high likelihood you will omit something important, make a mistake on the means test or say or do something that will cost you your home, your car or other assets, including your retirement savings. Losing tens or hundreds of thousands of dollars in an effort to save a few bucks is a very real possibility.   

The reality of Filing “Pro Se”

Once you file for Bankruptcy “pro se”, there is a high likelihood you will be faced by mountains of paperwork being filed on behalf of your creditors by attorneys whose job is to get the absolute best deal for your creditors as they possibly can.  These attorneys will work tirelessly and ruthlessly to ensure that your bankruptcy fails and that your creditors can resume harassing and collecting from you. Beyond the creditors attorneys, you will also be opposed by a trustee who is a highly trained attorney.  It is the trustee’s job to secure as much of your assets for your creditors as possible. Just because you’re not an attorney and don’t know the law doesn’t mean the creditors’ attorneys, the trustee or the judge will take it easy on you. You are still expected to know the United States Bankruptcy Code and the procedures of the bankruptcy court, including the local procedures of each individual federal bankruptcy judge.  

Investing in your future

The low cost of being represented by a competent bankruptcy attorney is one of the best investments you can make for your future.  Beyond not having to learn the many aspects of the law that your attorney is familiar with, it’s reassuring to have someone on your side who knows how the bankruptcy process works and can guide you through it successfully.  Beyond knowing the law, the attorneys at Harmon and Gorove have a long and successful relationship with many of the creditor attorneys and all of the current Chapter 7 and Chapter 13 trustees in the Newnan Division, all of whom know not to try to take advantage of our clients.

Hiring a Competent Bankruptcy Attorney

The experienced attorneys at Harmon and Gorove can give you advice based on your individual circumstances. Their decades of experience aren’t something you can get from a form you find in the internet. Do yourself a favor and invest in your future. Contact the competent and compassionate attorneys at Harmon and Gorove today for a FREE consultation.  Let us help you get your life and your financial freedom back from greedy creditors.

Cramdown: reducing the principal on secured debts

When considering filing a chapter 13 bankruptcy, you may find yourself in the position to be able to reduce the principal balance of a secured debt to the actual value of the property (car, household item, etc.) it is secured by. When you reduce this amount of debt in this way it is known as a “cramdown” and can be a very valuable tool in your bankruptcy case that can potentially save your automobile, real estate investments, and other personal property you have pledged to secure a debt. Because of the way the law is written, you aren’t allowed to use the cramdown provision on your primary home  but using it in other aspects of your financial life can net massive savings.

When your attorney initiates a cramdown, you’re taking the value of a secured item like a car and reducing the balance you owe in order to match the item’s true book value. When this happens, the crammed down amount is then placed in your unsecured debt in your Chapter 13 case. A cramdown can be extremely beneficial in certain cases and might allow you to pay only a small percentage of your unsecured debt.  Filing things this way could result in all of your unpaid unsecured debt being discharged at the conclusion of your Chapter 13 case. There are many other advantages to cramming down your loans with a Chapter 13. This includes reduced interest rates, the potential to stretch the payments across a greater period of time which might very well reduce monthly payment amounts to a more affordable level. Another fantastic benefit is that you can escape liabilities on any deficiencies by using a mortgage cramdown on investment real estate.

As with much in life, the cramdown in a Chapter 13 seems often seems too good to be true. While this is not the case, it does come with certain guidelines that were passed by Congress to place certain restrictions on how, why and when you can initiate a cramdown. The cramdown restrictions to remember are the 910 Day (roughly two and a half years) Rule on car loans, the One Year Rule on personal property (think TVs, furniture, etc.), and the restrictions on investment real estate mortgages.

The attorneys at Harmon and Gorove are extremely experienced in using cramdowns to the benefit of their clients.  With decades of combined experience, our team can help you find out of you qualify for a cramdown in a Chapter 13 and help you successfully navigate the intricacies of a Chapter 13 Bankruptcy so that you may emerge on the other side debt free.  Call our office today to set up a free consultation with an experienced and compassionate Chapter 13 Bankruptcy Attorney.

How do I find a good Bankruptcy Attorney?

This is a very important question, especially from people that haven’t ever had the need to hire an attorney or who are considering bankruptcy for the very first time. Depending on where in the State of Georgia you reside, there can be any number of options.  Finding a competent Georgia Bankruptcy Attorney is the most important factor in the outcome of your case. Below, we add a few bits of extra information to help you know that you have chosen the best lawyer for you that can help you navigate your way through the bankruptcy process successfully.

Finding the RIGHT Attorney

First, and most importantly, you want to make absolutely sure that the lawyer you choose is a SPECIALIST in bankruptcy law. We can’t possibly stress the importance of this enough.  Much like medicine, the law is extremely specialized.  Having an attorney who focuses on specific types of law allows them to have the kind of expertise you need in order to make sure your case is given the attention it deserves and has the outcome you want.

The United States Bankruptcy Code is second in complexity only to the United States Tax Code and thus, only an attorney who is a specialist in bankruptcy can possibly know all the ins and outs of the bankruptcy code of the United States and the specific laws of Georgia.

You have likely found several attorneys in your area that practice bankruptcy.  The question is, how do you choose between them? Probably the most important attribute of the best bankruptcy attorneys are their timeliness. Because of the very strict timelines in the bankruptcy filing process and the large amounts of paperwork necessary, the lines of communication between you and your lawyer are very important. At Harmon and Gorove, we pride ourselves on responding to our clients’ most urgent needs quickly and providing expedient service to keep their case on track.

Aside from timeliness, you want to find a local bankruptcy attorney who is not only experienced in successfully filing bankruptcies, but who also has a good relationship with the bankruptcy trustees in your division. Because each bankruptcy division and judge can do things a little differently than the other courts, it pays significant dividends to have a team of lawyers that is highly knowledgeable about the workings of the court in which YOU will be filing for bankruptcy.

There are many ways to find a good lawyer who can help you file bankruptcy, which include getting in touch with your state bar association, the local bankruptcy court, or asking friends or family who have filed before. Another good way is to just drive around and see which bankruptcy offices are actually open every day. Many of the bankruptcy attorneys you see advertising in the area only have satellite offices that are rarely staffed and if you do hire them, you likely won’t see them after the initial consultation.  Their attorneys work out of a centralized office somewhere in Atlanta and you definitely won’t see them walking through downtown, your kids won’t go to school with their kids and grandkids, and they won’t be at the high school football game on Friday night. Your attorney may not even show up at court with you, hiring a fill-in lawyer because you simply aren’t worth their time.  Finding an attorney that doesn’t just come in to the community to take your money just makes sense. Our attorneys at Harmon and Gorove are specialists who deeply care about the success of each client’s case. OUR attorneys will be there, by your side, every step of the way. We answer our own phone, we give you our direct emails and WE show up at court with you.

If you are looking for an attorney to help you through the bankruptcy process, give us a call to schedule a free consultation and let us show you why we’re the BEST choice to help you through the bankruptcy process.

Garnishment? My paycheck? Really?

The long and short of it is, yes, garnishment of wages can happen to you.

Finding yourself in a situation where you are experiencing financial difficulties can often create an immense amount of stress and people who find themselves in this unfortunate situation often don’t know who to turn to. When you have exhausted your other options one of the best solutions is to file for bankruptcy protection with the help of a qualified Attorney.

One of the concerns people face when dealing with financial hardship is the reality that your wages may be garnished by a creditor. If this happens, it magnifies the burden and will likely pose even greater problems than you were previously facing. Depending where you live there are federal and state laws in place that limit the amount that creditors can receive in a garnishment. However, when money is already tight any income you lose will have a dramatic effect on you.

When creditors seek a garnishment, they must first file suit in court and notify you of the pending legal action. Generally speaking, in Georgia, creditors can take no more than 25% of your disposable income or the amount that is above 30 times the federal minimum wage, whichever is less.

Rather than continuing to deal with unnecessary stress, many consider filing for bankruptcy protection as it causes all of the collection actions to cease immediately, under penalty of law.  In Georgia, we may even be able to recover some of your garnished wages. All of your creditors collection actions will be put on hold until your bankruptcy status has been determined and your case discharged. While many people view bankruptcy as giving up, we look at it as a form of relief when there are simply no other options available.

Filing for Bankruptcy allows you to get your finances back on track to give you more freedom and peace in your life.  When filing for Bankruptcy it is important to seek out a highly qualified attorney who SPECIALIZES in filing consumer bankruptcies. The attorneys at Harmon and Gorove have filed more than 5,000 successful bankruptcy cases and will put their knowledge and experience to work for you.  Contact our office today to arrange a FREE consultation with one of our highly trained attorneys.