Author: Amanda Barrett

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Savings Rate in America is Scary

The average American family is struggling with savings.  While as much as 70% of people agree that the economy is humming along at a record pace, many people often do not see the real benefit that Wall Street is reaping in their own bank accounts.  Here in the United States, the economy may be doing well but the savings rate reaches has reached a new low.

 

A recent study by the Federal Reserve says that the average American consumer is unable to cover a $400 emergency expense without tapping credit or having to sell some possessions. Many attribute this to the rising cost of living and the recent uptick in consumer debt and student loan debt which are both having a negative effect on the savings rate.  Student loan debt in America now tops 1.4 Trillion dollars and is causing many people to not be able to purchase homes and cars and is even blamed for delaying marriages and keeping people from starting families.

 

Another disturbing trend in the savings rate in America is the fact that more than 50% of people have less than 1,000 dollars in savings.  Despite the fact that more Americans are feeling confident in the economy, a full 57% of Americans don’t even have 1,000 dollars saved. This is disturbing because many people still expect to retire at or around 65.  The average social security check people receive in retirement is approximately 1,400 per month.  While that will continue to increase as time goes on, it is a sobering thought that many people who are late to get into the savings game may have to finance their retirement on just under 17,000 dollars per year.  


As we stated earlier, most people are feeling more financially secure but they are failing to save.  You can make that savings easier if you contribute to employer funded or matched retirement plans which save your money for you, keeping you from ever getting your hands on it.  If you work for an employer that does this, we highly recommend you using this. If you are having to save on your own and you keep finding it harder and harder to put money away you may be a good candidate for bankruptcy.  Bankruptcy can be a positive thing for your finances and it can help you eliminate may of the unnecessary debts that are holding you back from creating a savings plan. If you are struggling with creating a savings plan, give us a call.  The attorneys at Harmon and Gorove have decades of experience helping people out of debt and making meaningful financial changes in their lives.  

Someone Told Me I Can’t File Bankruptcy…

Today, so many people are worried that once they have decided to seek help someone might tell them they can’t file bankruptcy.  Whether it is the judge, a trustee or a creditor, They fear that someone might reject their bankruptcy petition all together or tell them they can’t file bankruptcy and put the right back at square one.  The long and short of it is that the chances of this happening are very very slim. This is why you hired an attorney to begin with. Trying to file a case “pro se” might lead you down a road full of serious legal problems, but filing with an attorney is definitely the right choice.  Your attorney’s job is to guide you through the process and make sure that your situation is fully vetted. The attorney will know your entire situation so that when your bankruptcy petition is filed with the court you will be in full and complete compliance with the bankruptcy code and the local rules set out in each judge’s courtroom. Whether it is a Chapter 7 or a Chapter 13 bankruptcy, your attorney will make sure that it is smooth sailing through the bankruptcy process.  

Like I stated earlier, the road is usually smooth and clear when you hire an experienced Newnan Georgia Bankruptcy Attorney. The only time you might find yourself facing problems in your bankruptcy is when you don’t disclose your entire financial history up front to your attorney and the court.  Your mother probably used to tell you that honesty is the best policy and if she did, she was right. That proverb holds true in Bankruptcy as well. You have to tell your attorney everything that’s going on in your financial life.  Whether you had a car accident and have the potential to recover money from it, you’re going through a divorce or you are being sued for something that you may be liable for, you have to disclose this to your attorney from the start.  Your attorney is best able to serve you when they have to complete and total picture of your financial situation. When that is the case, your attorney can almost always guarantee smooth sailing all the way through your bankruptcy case.  

If you are behind on your bills, being harassed by creditors or just feel like there’s no way you’re going to get ahead, make an appointment today with one of our compassionate and experienced bankruptcy attorneys at Harmon & Gorove. We will work with you to get you a fresh start in your financial life and get your credit back on track after bankruptcy.  

 

Positive Aspects of Bankruptcy

Bankruptcy has the ability to solve a bevy of financial problems but it is often associated with negative thoughts and reactions.  When the prospect of filing bankruptcy appears on the horizon, it is easy to only see the negative. If you have determined that bankruptcy is your only way out, it is important to focus on the positive impacts that bankruptcy can have on your life.  Remember, the night is always darkest just before the dawn and there are many positive aspects of bankruptcy protection.

Yes, there are negatives to Bankruptcy

Filing for Bankruptcy protection will often stay on your credit report for a minimum of 7 years and may hang around for as long as 10 years. There is also the very real possibility that bankruptcy could make it more difficult and expensive to finance a car or a home for a few years. It likely also will be difficult to get unsecured lines of credit like personal loans and credit cards for a time after your bankruptcy. Some people also feel embarrassed for having filed bankruptcy and many put it off because they feel shame by having to resort to bankruptcy.  Let me remind you though, if you find that bankruptcy is your only way out, you should not wait to file.  There are many circumstances where bankruptcy isn’t appropriate for you and your situation but until you contact a competent Newnan, Georgia Bankruptcy Attorney, you won’t have the right information to make your decision.

But there are also many positive aspects of Bankruptcy

First things first, filing for bankruptcy will allow you to discharge your debts if you follow the bankruptcy plan. In the majority of situations, you will also be able to retain most of your property if you want to keep it.  Once you have eliminated your debt you will be free to chart your new financial future in your own way. A lot of people learn significant life lessons from the bankruptcy process and it allows you to adjust your priorities in the least painful way possible.  Bankruptcy also allows you to stop collections action through the Automatic Stay. This keeps creditors from harassing you over unpaid debts and allows you to devise a plan to tackle your debts and re-organize your life around your new financial reality. There is even the possibility that you could improve your credit score by filing for bankruptcy. In the end, perhaps the most positive aspects of bankruptcy is peace of mind and knowing your finances are getting back on track and you’re able to successfully plan for your goals and your future. Filing bankruptcy puts you back in control of you life and protects you from the actions of unscrupulous creditors.

 

 

If You Die With Debt, Here’s What Happens

When you are making your plans and enjoying the present with your loved ones you build a legacy.  One of the things that people often don’t consider when building that legacy is the debt that they may leave behind in the event that they die with debt.  Unfortunately, many of your debts can and will out live you and the people you leave behind could be affected by those debts. If you have already created a will you will likely have named an executor who will be responsible for taking care of your debts and disposing of your assets when you pass.

When I Die, What Happens to My Debts?

If you die with debt, these are the most common types of debts that can have an impact on the ones you love:

Student Loans: If your student loans were obtained from the Federal Government, they will be forgiven upon your death.  If you took out private students loans, they can recover money from your estate or from a co-signer or guarantor. In the event that your estate has exhausted its resources, the private loans will also be wiped out.

Home Loans and Mortgages: If you own a home jointly with someone else or you wish to pass your home to a loved one and you die with debt on the property, they are responsible for continuing to pay your mortgage(s) after you pass. While the government protects you from having the loan called in upon your death, the note will have to continue to be paid until those you leave behind decide what to do with the property

Car, Boat, Motorcycle Loans: If the payments on these types of loans are not made then the person who lent you the money can take possession of the vehicle.  The person you leave the vehicle to will have the option of continuing to pay on the note but there are other probate concerns that often arise with transfer of title but that is something you may need to speak with a qualified probate attorney about.

Credit Card Debt and Medical Bills: While these types of debt are not secured by collateral (a car, house, etc.) if your estate has remaining funds they can be recovered by the credit card company or medical firm.  If the estate has no remaining assets then your debts are generally wiped out. In the event that that you have a JOINT credit card account, the non-deceased person will be on the hook for the debt incurred by you.  This generally doesn’t apply to an authorized user but if the primary passes away and you do not intend to continue to pay on the credit card, you shouldn’t continue to use that card.

Taxes: If you die with debt owed to the IRS or your state department of revenue it can create a headache for those you leave behind.  If you die owing back taxes and you have filed jointly with a spouse, your spouse is liable for the entire amount of the taxes.  Additionally, the IRS can try to collect any tax debts owed from your estate, even if you did not file jointly with your spouse. The IRS does allow certain exemptions but it would be advisable at that point to consult a qualified tax attorney to discuss your options.  

These situations can be avoided

If you need to file bankruptcy, get help now. Reach out to a qualified bankruptcy attorney, tax attorney or financial planner to discuss your particular situation. Ridding yourself of debt before you pass might be a good option for you.  The best thing you can do for your loved ones is to prepare your estate so they aren’t hit with unpleasant surprises in a time of profound grief. At the very least, you should have a last will and testament in place. You should also keep those you love apprised of your financial situation.  Provide them with a list of assets and liabilities, where you keep safe deposit boxes, a list of passwords and combinations to safes and lockboxes to assist your loved ones in closing out your affairs when the time comes. While your creditors are allowed to contact your heirs about collecting on debts when you retire, they must follow the guidelines set out the the Fair Debt Collection Practices Act.

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.