There are many reasons that bankruptcy filing rates are so high. Clearly an unexpected job loss or reduction in earnings can lead many honest, hardworking people into a bankruptcy lawyer's office. When a job loss is coupled with a divorce, I think that the likelihood of bankruptcy by husband or wife goes up exponentially.
I recently read a column written by attorney John Mayoue, a divorce lawyer here in Atlanta who is known for his representation of celebrities and other high profile clients. John notes that in the domestic relations legal community, Atlanta is known as the "divorce belt." In the bankruptcy lawyer community, Atlanta is known for having one of the highest bankruptcy filing rates per capita. I do not think that this is a coincidence.
Just as an ethical bankruptcy lawyer will advise you to search for alternatives to Chapter 7 or Chapter 13, a thoughtful family law attorney will advise you to search for alternatives to divorce. Bankruptcy or divorce may be inevitable, but when you seek legal counsel, look for a lawyer who does not offer "one size fits all" solutions and recommends alternatives – this would be a good sign that you are talking with a lawyer who has your best interests at heart.
John was gracious enough to give me permission to reprint his thoughtful article about why couples struggling in their marriages ought to consider alternatives to divorce. I recommend that you take his message to heart.
Divorce Lawyer John Mayoue Offers Advice to Couples Contemplating Divorce
The divorce rates in the United States are some of the highest in the world. Increased financial pressure brought on by the current economy is fueling the fire for marriages already in jeopardy, and the rapidly increasing number of homeforeclosures further demonstrates the severe consequences these pressures can produce.
According to Atlanta, Georgia based divorce attorney John C. Mayoue, who has been counseling couples through divorce cases for more than thirty years, the approaching holiday season will cause these numbers to spike further and will also be a busy time for lawyers specializing in divorce cases, as the holiday season often proves to be a breaking point for marriages in crisis.
“During the holidays, people’s pent-up thoughts about relationships and careers and where they are with life become intensified,” Mayoue says. “In December, for example, we have the highest number of suicides, divorce filings and bankruptcies of any month. It's just a very difficult time for people.”
Although our society makes divorce seem to be an easy and acceptable way out for couples who aren’t quite happy in their situation, Mayoue cautions couples not to be too hasty to start the divorce process. Divorces that make it to trial are painful and embarrassing, and the results are often not fair for both parties involved. If you are considering divorce, Mayoue suggest taking the following steps first.
1. Try to work out your differences
Ask yourself why you want a divorce. Are you just responding to life’s pressures? Are you looking for a way out of a stressful situation and not just your marriage? Or do you have legitimate concerns that are truly irreconcilable?More on Divorce and Bankruptcy – an Unhealthy Relationship
Filed under Bankruptcy budgets, Divorce and bankruptcy issues by 
Have you ever wondered what it takes to settle your debts for pennies on the dollar? Recently I interviewed Kenny Golde, a self employed filmmaker who found himself almost a quarter of a million dollars in debt when when a business deal fell victim to the economic downturn. Using negotiation techniques he developed (and has subsequently written about in a book), Kenny has managed to eliminate more than half of this debt through negotiation. Here is part six of our conversation – it lasts about 4 minutes. This is the last segment of this interview – parts 1 through 5 may be found in the five posts immediately preceding this one. In this segment, Kenny and I talk about the tax consequences of debt forgiveness and the insolvency rule that eliminates tax liability for most people.
Link to IRS Form 982 – used to declare forgiven debt as non-taxable
Link to Kenny Golde's book "The Do It Yourself Bailout."
Filed under Alternatives to bankruptcy, Debt negotiation by
Have you ever wondered what it takes to settle your debts for pennies on the dollar? Recently I interviewed Kenny Golde, a self employed filmmaker who found himself almost a quarter of a million dollars in debt when when a business deal fell victim to the economic downturn. Using negotiation techniques he developed (and has subsequently written about in a book), Kenny has managed to eliminate more than half of this debt through negotiation. Here is part five of our conversation – it lasts about 7 minutes. In this segment, Kenny notes that most lenders will not consider negotiation with you until you are 90 days late. He also talks about credit scores – and why this number is less important than most people think. Part 6 – the final segment – will be posted tomorrow.
Link to Kenny Golde's book "The Do It Yourself Bailout."
Filed under Alternatives to bankruptcy, Debt negotiation by
Have you ever wondered what it takes to settle your debts for pennies on the dollar? Recently I interviewed Kenny Golde, who found himself with $250,000 of credit card debt and no way to pay it all back. However, with tenacity and focus, Kenny has managed to eliminate more than half of this debt through negotiation. Here is part four of our conversation – it lasts about 8 minutes. We discuss the procedure for entering into a written settlement agreement with your creditor and the steps you must take to ensure that your settlement is honored by the creditor or collection agency. Part 5 will be posted tomorrow.
Link to Kenny Golde's book "The Do It Yourself Bailout."
Filed under Alternatives to bankruptcy, Debt negotiation by
Have you ever wondered what it takes to settle your debts for pennies on the dollar? Recently I interviewed someone who started with $250,000 of credit card debt and with tenacity and focus, has managed to eliminate more than half of this debt through negotiation. Here is part three of my conversation – it lasts about 8 minutes. Kenny points out that there is nothing morally wrong with settling debt. He explains that the term "charged off debt" means nothing – it usually just means that the creditor has sold its debt to a debt buyer. He points out that many collection agencies buy debt for 5 to 10 cents on the dollar, which is why they would be willing to settle for 50 cents on the dollar or less. Finally Kenny notes that any debt settlement should be in writing and that you should never send any money without a written agreement. Part 4 will be posted tomorrow.
Link to Kenny Golde's book "The Do It Yourself Bailout."
Filed under Alternatives to bankruptcy, Debt negotiation by
Have you ever wondered what it takes to settle your debts for pennies on the dollar? Recently I interviewed someone who started with $250,000 of credit card debt and with tenacity and focus, has managed to eliminate more than half of this debt through negotiation. Here is part two of my conversation – it lasts about 8 minutes. Kenny and I discuss the psychology of debt collection and the importance of seeing debt negotiation as a business transaction free of emotions or guilt. "You are the CEO of your own corporation," Kenny advises. Part 3 will be posted tomorrow.
Link to WalletPop article discussed by Kenny in this segment
Link to Kenny Golde's book "The Do It Yourself Bailout."
Filed under Alternatives to bankruptcy, Debt negotiation by
Have you ever wondered what it takes to settle your debts for pennies on the dollar? Recently I interviewed someone who started with $250,000 of credit card debt and with tenacity and focus, has managed to eliminate more than half of this debt through negotiation. Here is part one of my conversation with author and filmmaker Kenny Golde, who discusses with me his remarkable story about how he ended up with hundreds of thousands of dollars of debt and how he came to realize that debt negotiation is a business strategy and that the guilt and emotional efforts of debt collectors are merely tactics. This first segment lasts about 8 minutes. Parts 2 will appear tomorrow on this blog, with subsequent installments appearing every day through the February 4th post.
Link to Kenny Golde's book "The Do It Yourself Bailout."
Link to Kenny Golde's web site.
Filed under Alternatives to bankruptcy, Debt negotiation by
The number of newly laid-off workers seeking unemployment benefits unexpectedly rose last week, further evidence that the job market recovers at a very slow and bumpy pace. California, Texas, Florida, Pennsylvania, and even Georgia have experienced the highest recent increases in unemployment claims.
Wall Street economists had expected a small drop, but according to the Labor Department, initial claims for unemployment insurance actually rose by 36,000. An analyst from the Labor Department said that much of the increase is due to the administrative backlogs left over from the holiday season in the state agencies that process the claims.
Regardless of the ups and downs shown week to week, the economy is not consistently generating net increases in jobs. After adding only 4,000 jobs in November, which was the first increase in nearly two years, in December employers cut 85,000 jobs. Many economists say the four-week average of claims will need to fall to below 425,000 to signal that the economy is close to generating net job gains. Unfortunately, the four-week average rose for the first time since August to 448,250.
The number of people continuing to claim regular benefits dropped slightly to just under 4.6 million. However, this data does not include millions of people who have used up the regular 26 weeks of benefits customarily provided by states and are now receiving extended benefits for up to 73 additional weeks, which is paid for by the federal government. Over 5.9 million are receiving extended benefits in the week ended Jan. 2, which is an increase of more than 600,000 from the previous week.
These numbers demonstrate that even as layoffs are declining, hiring has not picked up, leaving people out of work for extended periods of time.
California has had the largest increase in claims, with 16,160. Texas, Florida, Pennsylvania and Georgia have the next largest increase. Oregon has had the biggest drop in claims, of 5,784, followed by Iowa, Kentucky, Michigan and Massachusetts.
There are positive forecasts out there as well. Because unemployment claims have been on a steady drop since last fall as companies cut fewer jobs, some economists hope that hiring will soon increase. Another report suggests that economic growth could pick up this spring.
Other economists, however, have been worrying that growth in the economy will stagnate this year as government support programs wind down and unemployment remains high.
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According to a recent article regarding Georgia bankruptcy published in the Atlanta Journal Constitution, it is nothing new that Georgia has one of the highest bankruptcy rates in the nation. What is new, suggests the AJC article, is who is filing: large numbers of people who have not previously had problems with financial instability.
With unemployment exceeding 10 percent, a real estate market in shambles, and many laws in place which 
support creditors, Georgia has had one of the highest bankruptcy rates for years. In 2009, and even here in early 2010, the numbers of people in Georgia filing personal bankruptcy continue to increase. These increasing numbers are partially the result of the large numbers of filers who are experiencing financial instability for the first time.
Richard Thomson, a partner at the Atlanta-based bankruptcy law firm Clark & Washington, said his firm is taking on an increasing number of higher-income professionals as clients. These higher-income filers simply can’t pay for all of their assets and possessions – boats, expensive cars, etc. As a result, they are filing bankruptcy as a means to start over, and their possessions are often given up as part of the process. According to Thomson, “They’re just saying ‘Take it. It’s not worth the effort anymore. I can’t keep up with it.”
Susan Blum and I are seeing the same trends here at Ginsberg Law Offices. While our firm has regularly handled cases for formerly high earners and individuals with substantial assets, we are seeing more and more people who start our meetings by saying "I never in a million years thought I would ever end up talking to a bankruptcy lawyer…." In many cases, clients who had previously enjoyed a comfortable lifestyle wait until disaster is about to strike before calling our office, perhaps in the expectation that their situations will improve. And more and more of these clients are turning to a Chapter 7 liquidation rather than a Chapter 13 reorganization.
More Chapter 7 Cases Being Filed
According to the National Bankruptcy Research Center, over half of Georgians filing between January and November 2009 filed Chapter 7 Bankruptcy. In a Chapter 7, most debts are wiped out, but so are assets that aren’t protected by exemptions – second cars or vacation homes, for example. 47 percent filed Chapter 13 Bankruptcy, which allows consumers to hold on to a house and car but requires that they repay a portion of their debts generally over a five year period. A Chapter 13 is more or less a reorganization of debt.
These percentages are new for Georgia, which traditionally has been dominated by Chapter 13 filings, as debtors were most concerned about holding onto a house and accumulated equity. Currently, many homeowners have little equity or owe more than their houses are worth, which may be one reason for the spike in Chapter 7 filings.
According to Consumer Credit Counseling Service of Greater Atlanta, one in five consumers receiving recent pre-bankruptcy counseling said avoiding foreclosure was the primary reason for seeking bankruptcy protection. Georgia’s foreclosure process is the fastest in the nation, as it occurs without court or government supervision and takes only a week. A bankruptcy filing is the only realistic option for most Georgians seeking to delay a public auction of their homes.
I (Jonathan) have been representing individuals in Chapter 7 and Chapter 13 cases for over 20 years and I can only remember two or three times when the demand for our services was so high. The Congressional Budget Office says that the recession is over but I am not seeing any indication that this is true.
Filed under General consumer bankruptcy info, Georgia Bankruptcy by
A number of stories have recently appeared in bankruptcy and 
consumer rights blogs suggesting that the Atlanta based collection firm Mann, Bracken, LLC has gone out of business. On his Caveat Emptor blog, Minnesota bankruptcy attorney Sam Glover has written several posts about the Mann, Bracken firm including one on December 22, 2009 stating that the calls to the firm's phone number instructs callers to communicate directly with their creditors. I called several numbers listed for Mann, Bracken but the calls were answered by a message that "all circuits are busy, try your call again later."
Although based in Atlanta, Mann, Bracken has a national practice and it has apparently been growing by merging with other law firms. I found a web site called paymbw.com which purports to be a payment gateway for debtors to make electronic check or credit card payments on debts being handled by Mann, Bracken. This site notes that Mann, Bracken is the successor by merger to Wolpoff & Abramson L.L.P., and Eskanos & Adler P.C., two collection law firms well known to debtor's lawyers.
The domain mbllc.com has a "coming soon" page and the registration information for that domain is private. I looked up the contact information for the partners. Douglas Mann's shows him as an inactive lawyer affiliated with Mann, Bracken. Chris Bracken's registration shows a gmail.com email address, a business address at Mann, Bracken's location, but the space for the law firm information is blank. Two other partners – Bill Layng and Steve Knezo – are now affiliated with other law firms. More on Giant Debt Collector Law Firm Mann, Bracken Out of Business
Filed under General consumer bankruptcy info, Georgia Bankruptcy by
Jonathan Ginsberg
