I am sitting here wondering two things…am I qualify to file bankruptcy and should I file bankruptcy.
I have unsecured debts…c/Cards and student loans avg. 50,000. I have a mortgage of 1.000 monthly. I AM ENROLLED IN CCCS AND IS PAYING ABOUT 900.00 monthly. I have high medical bills and child support payments avg. 600 monthly…after working many many hours of overtime my income last year was 54,000. I am single/seperated…what should I do and how should I do it….HELP.
–Jeff
Jonathan Ginsberg responds: Jeff, thanks for your question. Here is how I would analyze your situation:
- Bankruptcy is always a last resort. Whatever positive information you hear about bankruptcy (and there are some positives), you always run a risk when you file for bankruptcy. Why? Your financial future will be in the hands of others (trustees, judges). Creditors can put you in the position of having to litigate (expensive) or give up bankruptcy protection. While most bankruptcy cases process through the system without hassles, there is always the chance that your case could blow up. Additionally, you will see your credit score destroyed (at least in the short term) if you file for bankruptcy.
- Given your income, I would think that you would be limited to filing Chapter 13. Although the median income limit for a single individual changes once or twice a year, the current median income for an individual filing in Georgia will be in the $40,000 range. Your income is significantly higher – therefore I suspect that you will be looking at a Chapter 13.
- Currently, you are paying $900 per month + your mortgage + high on-going medical expenses. Chapter 13 might make sense if it could reduce that $900 payment to $600 or $500. The only way to know that would be to submit all of your financial information to a bankruptcy lawyer for a personalized review. If you want me to review, I would direct you to a special download page of my Atlanta bankruptcy web site, where I identify exactly what I need to analyze your specific case for a possible bankruptcy.
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Can I file $1000 of back rent owed to landlord and protect myself from eviction in the future? I am currently not under a lease.
–Candi
Jonathan Ginsberg responds: Candi, thank you for your question. First, I will assume that you have other debts besides the landlord. In my view, the cost and hassle of bankruptcy would be excessive if your only debt problem is $1,000 of past due rent.
Assuming that you have other debts, my experience in dealing with past due rent is as follows. Note that I am only describing my own experiences – there may be other bankruptcy lawyers out there with different experiences. Also, as you are in the Southern District of Georgia, there may be local rules and customs that apply.
In my experience, if you are facing a threatened eviction, have $1,000 of past due rent and have no lease, Chapter will result in a short delay of the eviction. If the landlord is awake, he will retain counsel and file a Motion for Relief from the Stay. His argument will be that you have no legal right to the leasehold and that your bankruptcy does not provide any adequate protection to him. The bankruptcy judge will likely grant the motion and the landlord will be able to renew his eviction proceedings. In this scenario you would buy yourself about three or four weeks.
If the landlord is not awake, the stay would remain in effect for as long as the bankruptcy case is active – usually four or five months. When the bankruptcy case closes the stay goes away and the landlord could renew his eviction efforts (although you would have the benefit of four or five months of free rent).
In Chapter 13, you would likely face the same result. I was once involved in a case like this where the judge did extend the stay for a few months so as to allow the debtor to have time to find another place to live. However, the stay in that case was dependent upon the debtor making regular monthly payments – any delinquency resulted in an immediate termination of the stay. In that case, unlike yours, there was a lease with several months left to run.
A problem in a 13 in your case, of course, is the absence of a lease. If there was a current lease I think that there is a better argument to extend the stay for at least the remainder of the lease. Absent a lease, you have the bankruptcy judge essentially forcing the landlord to accept the existing lease term indefinitely.
I should also point out that the current bankruptcy law gives added protection to landlords in terms of immediate relief from the stay if there is any evidence that the leased property is being damaged or under threat of damage. I have not seen any cases arising from this "threat to immediate economic harm" provision but I mention it in the event that your relationship with your landlord has deteriorated and things are being said in the heat of anger.
In sum, therefore, if you have another reason to file bankruptcy you can certainly put the $1,000 into your case as an unsecured debt, but don’t plan on staying in the leased premises too long absent some other deal with your landlord.
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