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The Reality of Unemployment

COVID- 19 is having a dramatic effect on the average American household. We are seeing unemployment numbers reaching record highs not seen since the great depression. With a  wave of corporate bankruptcies having already begun, taking out legendary retailers like Neiman Marcus and J. Crew as well as the second oldest airline in the world, Avianca, with more pain in the corporate world likely to come and with that will come even more unemployment. 

Consumers, likewise, have faced an enormous amount of uncertainty.  A recent poll taken since the coronavirus outbreak paints a grim picture of household finances: Almost two-thirds of respondents (64%) anticipate that lost wages due to the pandemic will yield at least a $500 shortfall when trying to pay monthly bills. Nearly half of those households (27% of all respondents) predict a shortfall of $1000 or more. Those are real and substantial amounts of money.  We have already discussed how the average American is unlikely to be able to fully fund a $1,000 emergency.  Add that in with the fact that many Americans are likely to be $1,000 short of being able to make basic expenses and you have a recipe for catastrophe.  

While many have been able to float their expenses by relying on their $1,200 stimulus check and their boosted unemployment checks, others still find themselves short and others still haven’t received either their stimulus or their expanded unemployment benefits.  This leaves consumers with very few options.  As we outlined in an earlier blog post, you need to prioritize your payments.  You have to keep a roof over your head, food in your belly and you have to be able to obtain reliable transportation when it is safe to return to work or when you are able to find gainful employment in that order.  One of the best ways you can handle the shelter and transportation issue is through bankruptcy.  When times get tough, the bankruptcy code provides immense relief for people who have found themselves to be in tough financial situation.  This is done through the automatic stay which provides relief and stops actions by creditors.

Bankruptcy is a saving grace for people who have experienced financial hardship.  If you’ve exhausted your options or are feeling overwhelmed by your financial situation, don’t keep waiting for the next financial catastrophe to come down the pipe, get ahead of it and contact our office today for a free, no obligation consultation via phone, videoconference or in person (with social distancing of course) with one of our award winning attorneys.  In times of trouble, it’s good to know someone.  Let us work for you. 

A Study: Debt in Georgia

Consumer debt all over the country is approaching record levels.  We are all aware of the student loan crisis and medical debt, but the reality is, debt of all kids is at an all time high.  Citizens of the State of Georgia are facing incredible levels of debt.  More than 39% of Georgia residents have at least 1 account currently tied up in debt collection.  A recent CNN report states that more than $14 Trillion dollars of debt is outstanding in America.  That includes mortgages, student loans, car loans and credit cards, medical debt and other debts.  These levels of debt are scary to most people because levels of debt this high represent unsustainable amounts of money to service these debts.

The average American Family lives on less than $64,000 per year and while that number has risen lately, it pales in comparison to the average amount of debt carried by Americans at more than $137,000 .  Citizens of Georgia face higher collections and levels of debt that the national average. Citizens of Georgia have on average about $2,700 of credit card debt which on average costs around $275 a month in payments in order to actually pay it off.  That is a significant payment for most citizens in Georgia who average a gross monthly income of only $4,600 before taxes.  

What can we do about debt? Well that’s the million dollar question.  We try to pay it off if we can.  No one takes out a loan wanting to not pay it.  We often find ourselves struggling to deal with paying our debts and maintaining basic necessities and unexpected emergencies.  If your level of debt has become unsustainable, contact the attorneys at Harmon and Gorove to see how we can help you achieve freedom from debt with a completely free consultation with one of our award winning attorneys.

Don’t let the fear of bankruptcy hold you back: It will get better.

Fear is a powerful thing.  Fear motivates people and holds other back. It’s true,  your life after bankruptcy may be different than it was before you went and made the best financial decision you’ve made recently. While its true that bankruptcy generally reduces your credit score, it’s likely that your credit was already not so great.  Bankruptcy can occasionally make it harder to get credit in the future, especially in the short term, but over time things get better.

Fear of bankruptcy and its aftermath isn’t a good reason to avoid using it when you need it. Bankruptcy is there for a reason and that reason is to help you in your time of need.  Bankruptcy can free up your finances and allow you to get through life without the need to take on more and more debt. With the financial freedom and stability bankruptcy provides, you may not even miss the credit lines you once had.

Recovery after bankruptcy: What happens next?

After a bankruptcy you’ll be considered, at least temporarily, a high risk borrower. Your best bet for rebuilding your credit is to make on time payments with your utility providers, especially cell phone and internet companies as they often report on your credit. With a Chapter 7 bankruptcy, you’ll have it reported on your credit report for the next 10 years and if you choose a Chapter 13 bankruptcy, it will stay on your credit report for the next 7 years. 

While you may have trouble getting loans or credit, most people are able to get credit for some kinds of purchases after only a year or two.

While you’re in the bankruptcy process you’ll encounter some minor difficulties on occasion. You may find it harder to rent an a place to live, buy a car or get a job.  If you already have a place to live and a good job or a reliable car, do your best to maintain the status quo. It could be difficult to get a car loan immediately after bankruptcy and while many landlords understand that people get in trouble sometimes, there are landlord who may exclude you if you have poor credit. 

After bankruptcy, the key things to do is remember to pay all of your bills on time. Stay current on them so that your new post-bankruptcy record stays clean and shows positive change from the bankruptcy moving forward. You may want to take out a credit card that requires a full deposit. These are available at many reputable banks and are usually available to people regardless of their credit history. This kind of card is designed to help you build your credit on one hand and it also keeps you protected by not allowing you to borrow more than you put down as a deposit. 

These are some things to think about with bankruptcy. We are always up front with our clients about he way their life will change. Your life may change after bankruptcy, but you will be able to move on and have a life without debt that overwhelms you. If you’re interested in scheduling a free consultation to discuss your options, contact the compassionate attorneys at Harmon and Gorove for a free consultation today. 

3 uses for your Stimulus Check

As of the writing of this blog entry, more than 22 million Americans have filed for unemployment and millions more are staring into the abyss.  COVID-19 has decimated what was one of the strongest economies in American history. Businesses are closing and some of the most famous names in retail are likely to be seeking bankruptcy protection in the very near future. There is one silver lining in all this and that’s the help we’re all getting from the government in the form of Stimulus checks to help offset the damage COVID-19 has done to people’s ability to function financially. A lot of people don’t often receive a big lump sum payment like this and many are asking, what should I do with my newfound windfall.  We have a list below to help you decide. 

Meet your basic needs

Everyone has ongoing expenses that they must pay for, your stimulus can help.

Food: You’ve got to eat and so does your family.  You’ve got to be able to put food on the table day in and day out.  If you don’t have any other means of putting food on the table, this check can seriously help with one of life’s greatest necessities. 

Housing: You’ve got to keep a roof over your head.  Many people are finding offers of forbearance on loans and rent, but be sure to read the fine print.  Many banks and landlords are offering forbearance but the devil is in the details. Many of those banks and landlords will expect the entire amount due at the end of the forbearance period.  If you can, pay your mortgage or your rent.  

Transportation: If you’re lucky enough to have a job now or one to go back to once everything goes back to normal, you need to keep a set of wheels. 

Utilities: You should pay your bills if you can.  While many utility companies are’t disconnecting during the crisis, don’t think that’s going to be a free ride. The tab is still running and they will eventually expect payment, possibly with interest and fees. The bottom line is, look on their websites for coronavirus accommodations and how to contact them for assistance. Don’t ignore bills. Stay in touch with each company if financial hardship puts you behind and you can’t pay.

Save it

We have written before about the number of Americans who don’t have even enough money  in their bank account to cover a $1,000 emergency. With each person getting $1,200 in stimulus money and families getting more, if you are one of the fortunate people who still have a job, use this money to help build up a fund to cover the unexpected burdens you may not see coming yet.  

Invest in your future

Eventually, everything will get back to normal and when it does, you’re going to have a lot of financial decisions to make.  If you aren’t in the position to save your money and you’ve stopped paying some of your bills like credit cards and personal loans, know that your creditors will eventually come looking for you and the money you owe them.  If you already had a good amount of debt to begin with maybe you’re realizing that now may be a good time to start fresh with a clean slate. At Harmon and Gorove, that’s what we’ve done for nearly 40 years. If you’re facing financial uncertainty because of unsustainable debt, contact the attorneys at Harmon and Gorove for a free consultation to discuss how bankruptcy can put you on the path to financial security.

Chapter 7 is often a better choice than debt consolidation

Every day, you turn on the radio and listen to product advertisements.  One of the major advertisers in the United States are debt consolidation companies.  You see their ads on TV and hear them on the radio every day.  They pop up in your facebook feed or in some google ad on the side of a webpage.  They make fantastic claims about being able to reduce your debts and consolidate your debts into a manageable debt load like they have some kind of magic wand.  It sounds like its too good to be true, and it often is.  What they’re selling you costs money, lots of it.  They make very good money on people’s need to be free of the burden of unmanageable debts.  Most of these companies just consolidate your existing debt into another loan with a lower rate.  When you’re already struggling, how are you going to make the payments on another, albeit potentially smaller loan. 

Another reason why debt consolidation can be dangerous for those struggling financially is that using a lump-sum payment to reduce the balance on your credit cards means that there’s more money to spend on your credit cards and the cycle of debt often just starts over again.  Debt consolidation loans can actually cause you to end up deeper in debt than you already were. 

Debt consolidation is a temporary fix at best.

Consolidating or reducing your existing debts may feel better temporarily but it fails in one aspect.  It doesn’t address the issue of having a substantial debt load still out there that is no longer sustainable with your current income.  You’ll probably still have a very high debt to income ratio and you’ll probably still be spending a ton of your disposable income servicing this newly consolidated debt.  Chapter 7 Bankruptcy can change that.

Chapter 7 proceedings can eliminate your debt, freeing you from it forever

Debt consolidators just change who you pay.  Instead of having to write 10 small checks every month, you write one big one to a loan company.  Sometimes, it feels good and gives you a false sense of security because you pay a lower interest rate or have lower monthly payments due to the loan being spread out over a longer period of time. The bottom line is though, you will still have to repay those debts in full.

In a Chapter 7 bankruptcy, those debts no longer impact your financial future. If you qualify for a Chapter 7 and successfully complete your bankruptcy proceedings, the result will be a discharge of your unsecured debts, such as credit cards, signature loans and medical debt.

Instead of being on the hook to repay thousands of dollars, you’ll have a blank slate that will free up more of your income for other expenses. You’ll also have an opportunity to rebuild a positive credit history. Instead of spending all your time worrying about bills and struggling to make monthly minimums, wouldn’t it be nice to be able to have the money every month to handle your finances responsibly and buy not just what you need but what you want as well.  Contact the attorneys at Harmon and Gorove today to find out how we can help you get debt free. 

Interview with an Attorney

We interview people for things all the time.  Whether we know it or not, we’re constantly trying to gauge people and find out what their angle is, especially when trusting them with something as important as your legal affairs.  We’re thrilled to let people know where we stand during an interview and we want them to feel comfortable with us.  Below, we list and answer a number of questions you should ask in an interview before you hire a bankruptcy attorney, or any professional for that matter. 

Questions you should ask during an interview relating to experience:

  • Will you be handling my case from start to finish? 
    • Yes, Harmon and Gorove prides itself on handling every aspect of your case.  We don’t farm our work out to people we don’t know. 
  • What percentage of your clients are individuals or businesses?
    • Most of our clients are individuals or consumers.  That said, we often handle small business bankruptcies for our clients and are very experienced at handling small business bankruptcies. 
  • Is there anyone else in your firm who handle bankruptcy cases and will they be involved?
    • Harmon and Gorove handles its cases in house as a team.  Every member of Harmon and Gorove has the experience necessary to handle your case from start to finish.

Questions you should ask during an interview relating to your case:

  • Should I even file bankruptcy?
    • We get this question all the time and based on our analysis of each case, we often advise that bankruptcy wouldn’t help someone.  We want everyone to feel comfortable with the process and being honest with someone and actually helping them is more important to us than making money by convincing someone to do something they don’t need to do. 
  • What are my alternatives to filing for bankruptcy?
    • We take the time to list out your options but honestly, there usually isn’t a good alternative to bankruptcy.  See our blog here about the alternatives to bankruptcy.  Usually, you have two options.  File or don’t.  As we stated in our previous answer, bankruptcy isn’t for everyone but when it isn’t right for you, it doesn’t mean one of these debt settlement companies is a better idea. 
  • How long will the process take?
    • This depends on the type of bankruptcy you file.  A routine Chapter 7 usually takes 3-6 months from filing date to discharge. This varies based on your individual situation. A Chapter 13 bankruptcy usually runs for a minimum of 36 months to a maximum of 60 months.  
  • Will you keep me up to date about deadlines and other things I need to know?
    • We always keep people posted about what’s going on.  You’ll receive letters from the court and from us.  We’ll also email and call you in addition to letters we send out to people just so you always know what’s going on.  That’s why it’s so important that you take our calls and keep us up to date on your contact information. 

Questions you should ask during an interview related to Service:

  • What is the best way to get in touch with you?
    • The best way to reach our office is via email.  We check our email religiously and we can often respond in a matter of hours.  We’re always happy to get a phone call from you though and we’ll provide you an answer as fast as we can. 
  • Who will attend court with me?
    • We pride ourselves on showing up to court with our clients.  Unless it’s a dire emergency or it’s been pre-cleared with you, one of our attorneys will be there with you when you go to court.  Even when someone else attends on our behalf, know that we have a relationship with that person that spans decades and we trust them implicitly. 
  • How will you keep me updated on the progress?
    • As we stated before, we’ll keep you up to date with letters, phone calls and emails.  We never want you to be in the dark about your case. 

Questions you should ask during an interview Related to Cost:

  • How do you calculate your fees and what do they include?
    • We are a flat fee law firm.  We don’t charge retainers like most attorneys.  We quote you an UP FRONT price.  No games, no gimmicks, no $15 to respond to an email or $20 to answer a phone call. What you pay is what you’re quoted and any possible extra fees are disclosed at the time. We base our fees on the complexity of your case and the time necessary to complete a standard case.  
  • Is there a retainer?
    • NO.  We never charge a retainer fee for any legal work.  We always quote you a price up front. 
  • Are your fees negotiable?
    • Generally, our fees are among the most competitive in the area. We are the low cost legal leader in Newnan district.  We constantly work to save money and keep overhead low so we can afford to provide you the best legal services at the lowest possible cost. That said, we are flexible and can usually find a middle ground to make everyone happy. 
  • Do you offer payment plans?
    • We don’t want your finances to get in the way of you getting the help you need.  We are happy to discuss payment plans with our clients.  

We’ve spent the last 36 years working hard to make our clients feel comfortable and well represented.  During an an interview, you should always ask your attorney, or any professional you’re hiring for that matter, some combination of these questions.