Tag: bankruptcy

Cramdown: reducing the principal on secured debts

in Bankruptcy

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?

in Bankruptcy

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?

in Bankruptcy

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.

How much debt does it take to file Bankruptcy?

in Bankruptcy

Tons of people ask the question each day, “Do I have enough debt to file bankruptcy?”  The long and short of it is that the US Bankruptcy code lists no minimum amount of debt to be able to qualify for bankruptcy. However, in consumer bankruptcy, there is a debt ceiling that prohibits an individual from filing a Chapter 13.

The Minimum Amount of Debt

As we stated previously, there’s no minimum amount of debt you have to have to file for bankruptcy. That being said, the amount of debt you have should be a determining factor in whether or not you decide file a Chapter 7 or Chapter 13 bankruptcy. Should you have creditors who are unwilling to work with you, you find yourself owing more debt than you can pay back during the the next five years, or you are facing lawsuits due to debts in collection the time may be right to file bankruptcy. There is, however, only one way to decide if the time is right and that is to contact a local bankruptcy attorney to analyze your individual situation.

The Maximum Amount of Debt

Some people find themselves faced with insurmountable debts. One thing you should understand is that there is a limit to the amount of debt you have have in order to file a consumer bankruptcy. Owing more than $1,184,200 in secured debt or $394,725 in unsecured debt as of 2018 disqualifies you from being able to file Chapter 13 bankruptcy. If you find yourself in this situation then you may be forced to work on settling your debts or reducing outstanding principal in order to lower your debt load before we can file a Chapter 13. .

Bankruptcy in Georgia

Making the decision to file for bankruptcy protection is one that has long lasting implications and therefore shouldn’t be rushed into. Making contact with a local bankruptcy attorney like Harmon and Gorove can give you a better idea of where you stand financially and will allow you to determine which of your debts can be eliminated during bankruptcy and which ones you will have to pay back.

Chapter 7 or 13: Which Bankruptcy is Right for Me

in Bankruptcy

For people who are considering filing for bankruptcy protection the advice of a competent attorney can help them decide which type of bankruptcy is right for them. There are significant differences between a Chapters 7 and 13 bankruptcies and only the expert advice of an attorney trained in bankruptcy can help you decide which route to follow.  

Generally, a Chapter 7 bankruptcyis known as a fresh start or straight bankruptcy. Chapter 7s allow for the discharge of unsecured debts like credit cards, utility bills, medical bills, personal loans or other debts that aren’t being guaranteed by secured collateral. In Georgia, most Chapter 7s last between four and six months and most debt will be eliminated. The only types of debt that can’t be discharged are student loans, some criminal penalties, child support arrearages, recent tax debts, Alimony, and other types of non-dischargeable debts that can be discussed with your attorney.

Chapter 13s are a debt reorganization plan which will last at a minimum 36 months to a maximum of 60 months. Each month, the debtor makes a payment to the Chapter 13 trustee that consists of all of your disposable income left over after paying reasonable living expenses each month. The Chapter 13 Trustee uses this money to pay your creditors and your attorney according to a plan which is filed with the bankruptcy court.

What can go wrong with a Chapter 7

The difference between a Chapter 7 Bankruptcy which provides near immediate relief, and Chapter 13 plan, which  lasts 3 to 5 years is a significant difference. When you come in to speak to one of our attorneys, you are relying on their significant experience to help guide you towards the best outcome for yourself and your family. There are significant ramifications for filing the wrong type of bankruptcy. One of the first major problems is filing a Chapter 7 bankruptcy when you’re not eligible.

There are income guidelines that vary from district to district and state to state which ultimately decide whether you can file a Chapter 7. In the bankruptcy reforms laid out by congress in 2005, they created a means test. The means test is a mathematical formula used to determine whether someone is able repay a portion of their debt over time. This complicated figure is based upon income, the size of your family, and certain IRS guidelines for everyday necessities such as housing, food, clothing, grooming, transportation and other odds and ends. There’s also the a second part in the test. This determines whether you have the available income per month to repay your creditors. If you fail either these tests, then you will be forced to convert to a Chapter 13 or your case will be dismissed.

What Can Go Wrong in a Chapter 13

There are also some issues that come up in filing a Chapter 13 Bankruptcy. If your income is too low to provide the necessary funding for a Chapter 13 plan your case will likely never be confirmed and you’ll be back to square one. Often people trying to save property such as a house or a car propose Chapter 13 plans that are completely beyond the scope of their ability to fund.

Knowledge is Key

A good attorney who is an experienced bankruptcy practitioner can advise you on when a Chapter 7 or a Chapter 13 is unfeasible. There are some attorneys out there who will try to push you into one type of bankruptcy or another for reasons ranging from the ability to make more money off your case to just trying to make the client happy.  The attorneys at Harmon and Gorove will ALWAYS advise you on the best course to take regardless of what our fees will be and we will do our best to explain to you why a case may or may not work out.

There are many variables that go into deciding whether a Chapter 7 or Chapter 13 is appropriate for you and your financial goals. This isn’t a simple issue that can be taken lightly. Attorneys must have the expertise and experience to know the intricacies of Chapter 7 and Chapter 13 bankruptcies. It is a massive disservice to clients to file under the inappropriate section of the bankruptcy code. Doing so is going to lead to a terrible result for the client that could end up causing the client significant financial loss. This is where the expertise of a competent attorney is invaluable. You should always be cautious about using an attorney who doesn’t have significant experience in both Chapter 7 and Chapter 13 bankruptcies. The attorneys at Harmon and Gorove have filed more than 6,000 successful bankruptcy cases and provide expert advice on how you can best secure your financial future. Contact us today for a free consultation with our caring and competent staff.

The Automatic Stay: A Saving Grace in Bankruptcy

in Bankruptcy

Tens of thousands of Americans struggle with credit card debt, medical expenses, mortgages and other bills each day. Many of those people have been contacted by creditors in increasingly predatory and harassing ways about late and delinquent payments. Many businesses have probably even turned your unpaid and deficient amounts over to a collections agency. Many of these collections agencies contact you at the most inconvenient times or in the most inconvenient places such as your work, or at dinner time after a long day away from your family.  They are often ruthless in hounding you and over time may become more and more aggressive towards you in an attempt to collect from you. The best way to stop all of these harassing collection attempts is to file for a Chapter 7 bankruptcy. Filing a Chapter 7 Bankruptcy will stop all collection attempts while your attorney works out the details of your debts with the trustee, this is called the automatic stay.

The best thing about a Chapter 7 Bankruptcy is the automatic stay.  The automatic stay is issued to your creditors once your bankruptcy case is filed in the courts. When meeting with your attorney it is extremely important to include a complete and total list of who your creditors are, their address and phone number and how much you owe them in your bankruptcy petition. Doing this will ensure that these agencies receive notice to stop attempting to collect on your debt and to leave you alone. Once the automatic stay is in place, collection agencies can’t contact you, they must stop garnishing your wages and can no longer initiate or pursue lawsuits. Many of our clients often feel a deep sense of relief their case is filed and the threatening collector calls stop.

During, before and after the automatic stay bill collectors are also banned from taking certain actions including making threats, calling you at extremely late or very early hours, using profane language, increasing debts beyond the terms of the contract and threatening to have you arrested if you don’t pay their balance. These are protections afforded to you by the Fair Debt Collection Practices Act. If you feel that your right have been violated or you are tired of receiving the harassing phone calls and letters, being served with lawsuits or having your hard earned wages garnished, call one of the experienced attorneys at Harmon and Gorove.  They can help you find the right debt relief options for your situation and customize a plan to help get you out of debt for good. We offer convenient appointments and our consultations are ALWAYS free.