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Cosigning is ALWAYS a Bad Idea

We understand how hard it is to say no, especially to a friend or family member.  Let me say this loud and clear, when a family member of a friend asks about cosigning a loan for them, RUN FOR THE HILLS! JUST SAY NO! DO NOT UNDER ANY CIRCUMSTANCES SIGN THAT LOAN!

No matter how sure you are that they won’t default on the loan, you may even feel it in your soul, DON’T DO IT.  If a lender is asking for a cosigner, there’s a good reason. It’s because they believe that the primary borrower won’t be able to make their financial obligations.  More often than not, the lender is right.

When it comes to cosigning, you’re being asked to guarantee a debt.  If the primary borrower doesn’t repay the debt, you’re on the hook for the debt and the creditor WILL come after you. You’ll be on the hook for late fees, collection costs, attorneys fees and the principal balance of the loan.  If the debt goes into default it WILL show up on your credit report. The bottom line is, cosigning is always a bad idea.

Cosigning is always a bad idea.  Have I made myself clear up to this point? Cosigning a debt puts you in the worst possible situation.  You receive no benefit from the loan you’re cosigning. You aren’t getting a student loan to improve your education, you’re not getting a house to live in and build equity in, you’re not getting that flashy new car to ride around town in. You’re just on the hook for all of it.  You can have you bank accounts and assets seized, your paycheck garnished, you could be subject to litigation and you could ultimately end up in bankruptcy.

We understand that it’s difficult to refuse to help someone you love.  Telling friends or family members no is one of the toughest things you can do. However, it may be the best thing you can do for your relationship.  Think about what your relationship will be like if your friend or family member defaults on the loan or even just misses a payment. That’s going to show up on your credit at a minimum and will likely bring your score down 20 or more points.  The damage that cosigning can do to relationships can not be understated. You’ll be left with a loan and a relationship that will be severely damaged from here forward.

If you’ve cosigned a loan with someone who has missed payments or defaulted on a loan completely and you find yourself on the hook for their mistakes the attorneys at Harmon and Gorove can help.  We are experts in dealing with these kinds of issues through the bankruptcy code.  Contact us today for a free, no obligation consultation about how we can help you get out from under these debts and get your life back.

Protecting Assets From Creditors

Look, we all get it. When we get scared we hide.  It’s a natural reaction to trouble to take the things we value and try to keep them safe. The same thing goes when people you owe money to come calling.  You think about how you can keep those things you’ve worked hard for and value in your possession. Protecting Assets from creditors becomes a top priority.

One of the first reactions is to transfer ownership of your car or house or other items of value you have laying around the house.  You may think about giving certain things away to friends or family. In the end, you’d rather someone you love have it instead of it going to some greedy creditor.  

The only problem with protecting assets this way is that it’s illegal.

People who receive the fraudulent conveyance often get sued by someone, whether its a creditor or a trustee.  These types of transfers have been illegal for at least the last 200 years.  You simply can’t give away your wealth when you owe money to other people. The law is the same whether it’s at the state level or in the bankruptcy code.  Gifts and/or fraudulent conveyances are not effective tools you can use to put your assets beyond the reach of creditors. If you are trying to fraudulently transfer assets, all you’re doing is setting the recipient up to be sued.

You can sell if the price is right.

What all this DOESN’T mean is you can’t sell your assets, it just means that you have to actually sell them for what they’re worth.  For instance, if you have a 2 carat diamond ring, you can’t sell it to your friend Cindy for $50 and if you’re driving a Rolls Royce, you can’t sell it to your Aunt Jean for $1,000.  You have to sell the items for what they’re worth, otherwise it raises serious suspicion. If you sell these items or you fraudulently convey property to someone else, the trustee is allowed to void that sale via a lawsuit.  Generally speaking, the trustee has a period of time called a lookback. Generally that period of time is about 2 years. If you transfer items out of your name during that time period the trustee can sue the person who received your assets and get them back to use to satisfy your debts.


Another problem that can arise in transferring property in a fraudulent way is that you can run afoul of the bankruptcy code.  In 11 U.S.C. 727 the bankruptcy court is allowed to DENY discharge if they find that you made a fraudulent conveyance.  This means you just paid all this money and did all this work and you’re going to get NOTHING in return.

The best way to keep your assets is by filing a Chapter 13 Bankruptcy.  You should always resist the urge to hide your assets. The United States Trustee has a great deal of power to look back through your finances through different types of hearings and examinations.  You should ALWAYS consult a competent bankruptcy attorney to find out what your options are and what property is exempt from the trustee’s reach in your bankruptcy. If you have assets with a value that exceeds your exemptions, you should consider a Chapter 13 Bankruptcy.  

The attorneys at Harmon and Gorove have decades of experience in protecting assets from creditors.  We work hard to make sure that what YOU have stays YOURS. Contact our office today to set up a free, no obligation consultation to discuss your rights under the Bankruptcy Code.  

Timing Bankruptcy: How Often Can I file?

Timing Bankruptcy is very important and can have an impact on when and what types of cases you can file. The first thing you must realize is that there isn’t a set number of times a person can file for bankruptcy in their life, if you’re eligible to file, you can do it.  Just because you CAN file 5 or more times in your life, doesn’t mean you can actually get what is called a discharge of your debts. A discharge is the complete and total wipe out of your debt that comes upon completing a bankruptcy.

The biggest thing you must consider if you have to file for bankruptcy more than once in you life is timing bankruptcy correctly. If you completed a previous bankruptcy, whether it was a 7 or a 13, you have to wait a certain amount of time before you can receive a discharge in another bankruptcy. There are a number of factors that determine when and if you can file another bankruptcy and receive a discharge:

  • Which type of bankruptcy you file previously
  • When you filed the bankruptcy (ie. what date)
  • Whether your bankruptcy was completed (discharged), dismissed (voluntarily or involuntarily) or dismissed with prejudice (you can’t file bankruptcy again for a set period of time because of something you might have done.)

There are restrictions on timing bankruptcy as well.  When or whether you are eligible to discharge your debt again depends on whether you filed a 7 or a 13, when you filed that case, whether you received a discharge in that case and what kind of bankruptcy you want to file now.

  • If you file a Chapter 7 and want to file another Chapter 7: If you have filed a Chapter 7 Bankruptcy and received a discharge, you must wait 8 years to the day of the date you last filed for Chapter 7 Bankruptcy.  In other words, if you filed a Chapter 7 on May 1, 2010, you wouldn’t be eligible for another Chapter 7 until May 1, 2018.
  • If you file a Chapter 13 and want to file another Chapter 13: If you complete a Chapter 13 case and your debts are discharged you must wait 2 years from the date that your previous Chapter 13 was filed in order to file for and receive a discharge in a new Chapter 13.  This usually isn’t an issue though because it takes a minimum of 36 months to complete a Chapter 13 Plan. Generally speaking, you can file for a new Chapter 13 case pretty much immediately after your first Chapter 13 is closed.
  • If you file a Chapter 7 and want to file a Chapter 13: If you filed a Chapter 7 Bankruptcy and received a discharge, you can file a Chapter 13 case and be eligible for a discharge if the case is filed at least 4 years after the date you first filed your Chapter 7. One important thing to keep in mind is the fact that if you file a Chapter 13 after you complete a Chapter 7 and are discharged, you can still use a Chapter 13 to get caught up on debts that are of a high priority like mortgage deficiencies or missed auto loan payments even if you aren’t eligible for a discharge.
  • If you file a Chapter 13 and want to file a Chapter 7: If you completed your Chapter 13 case and received a discharge, you must wait 6 years from the date your Chapter 13 was filed before you may obtain a discharge in a Chapter 7 case.  There is an exception to this rule though. If your previous Chapter 13 was a 100% case, meaning that you paid your unsecured creditors back in full you may be eligible for a discharge in a Chapter 7.

The only way to know for sure which type of Bankruptcy you are eligible for and if timing bankruptcy correctly is in your interest is to speak with a competent and compassionate Newnan Georgia bankruptcy attorney. Our attorneys at Harmon & Gorove can offer you a completely free consultation in a judgement free and comfortable environment. We can review your current financial status and tell you exactly what would work best for your situation.  Whether it is a Chapter 7 Bankruptcy, Chapter 13 Bankruptcy or no bankruptcy at all.  We always look out of the best interest of our clients.  If you think Bankruptcy can help get your finances back on track, contact our office to schedule a free consultation today.

 

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.