September 22, 2017

Georgia’s Likely New Pre-Garnishment Notice Not All Good News

wage garnishment; bank account levyGeorgia may soon have a new law governing wage garnishments and bank account levies.  But the news is not all good.

You may recall that back in September, 2015, I reported that federal judge Marvin Shoob had issued a ruling that invalidated on Constitutional grounds bank account levies in Gwinnett County, Georgia. A man named Tony Strickland sued the Gwinnett County clerk of court after his bank account containing workers compensation and Social Security funds was seized by a credit card company that had sued him. Mr. Strickland argued, and Judge Shoob agreed, that the credit card company had an affirmative obligation to notify debtors like Mr. Strickland that certain funds (like workers’ compensation benefits, Social Security benefits, welfare payment and similar benefits) were exempt from garnishment. [Read more…]

Spouse Filing Bankruptcy Individually: Here’s How You will be Impacted

non-filing sopuseThere are many reasons why a married couple may decide that only one spouse needs to file bankruptcy. The bankruptcy law allows a married person to file an individual bankruptcy but there will be some impact on the non-filing spouse. If you are a non-filing spouse, here are some concerns that you should keep in mind:

1. Your credit score may be negatively impacted. You are most likely to face this problem when you have joint debts with a bankruptcy filing spouse and your spouse does not pay a joint debt on time.

For example, Chapter 13 allows a bankruptcy debtor to restructure payment obligations, which may include reducing the monthly installment, or extending the term of the loan. As a non-filing spouse you will likely be in violation of the contractual terms of your loan, which will appear as a late payment on your credit report.

2 Your joint bank accounts may be at risk. The bankruptcy law does allow a Chapter 7 or Chapter 13 debtor to declare a set amount of cash as exempt (sheltered) property. Depending on the particulars of the case the amount of this exemption can range from zero to around $10,000. [Read more…]

Statutes of Limitation in Georgia: Credit Card Debts

statute of limitationsIn Georgia, the statute of limitations for filing a lawsuit to collect credit card debt is 6 years. This means that if your account is inactive for six years, you have a winning defense to any credit card collection lawsuit.

The clock on this statute of limitations begins to run when you last use the card or when you last make a payment. There is some authority to suggest that the creditor can restart the statute of limitations clock if you acknowledge that you owe the debt, enter a payment plan, or accept a settlement offer.

If you get a collection call or letter from a creditor or collection agency on a credit card debt that has been dormant for almost 6 years, it would not be wise for you to accept the call or say anything to the caller. Instead you should contact a lawyer to speak on your behalf. [Read more…]

How to Stop a Wage Garnishment in Georgia and Get Your Money Back

judgment creditorAlmost without exception my clients who are subject to wage garnishment in Georgia report that they feel “violated” or “horrified” by discovering that 25% of their take home pay 1 has been seized by a creditor.  I can certainly understand this emotion – especially if you depend on every penny of your paycheck to cover monthly expenses like rent, utilities, car payments and insurance costs.

How Wage Garnishment Happens in Georgia

With limited exceptions, you can only be wage garnished in Georgia if your creditor has first filed a lawsuit and obtained a judgment.  More than a few of my garnishment clients claim that they do not remember being sued – this is an issue for another blog post but anytime you find out that a sheriff’s deputy or process server is looking for you, it is time to take action because this means that you have been sued. [Read more…]

  1. Click here to review the details about wage garnishment in Georgia.

Why Must my Chapter 13 Include an Employer Payroll Deduction?

employer deduction order in chapter 13Have you made the decision to file a Chapter 13 bankruptcy?  If so, you should understand that Chapter 13 serves as a bankruptcy court approved and supervised payment plan.  The court approved and supervised part is important because the bankruptcy court will protect you from creditor actions as long as you stay current with your plan.  By contrast, non-court supervised payment plans offer no legal protection – even if you pay every month on time payment plans that are not Chapter 13 will not stop lawsuits, wage garnishments, bank levies, vehicle repossessions or foreclosures. [Read more…]

How do I Know if Filing Bankruptcy is the Right Decision for Me?

If you are facing a looming debt crisis, the idea of filing for bankruptcy may have crossed your mind.   For many of our clients, it can be very difficult to take that first step of calling or emailing a bankruptcy lawyer.

In this Google “Hangout” video, Atlanta bankruptcy attorneys Jonathan Ginsberg and Susan Blum discuss a threshold question of their bankruptcy practice – how does an honest, hardworking family know that it is time to call a bankruptcy lawyer.

&nbsp

You can read more about filing bankruptcy in the Atlanta area, please visit our web site.

Why Some People Face More Bill Collection Harassment than Others

bill collection harassmentWere you aware that credit reporting agencies (Equifax, Experian and Trans Union) have assigned you a score which reflects the likelihood that you will pay a delinquent bill?  This collection score 1 helps bill collectors decide where to focus their collection efforts.

Credit reporting agencies also offer “bankruptcy risk scores” which offer credit grantors a numerical rating score to determine whether a customer or potential customer is more or less likely to file bankruptcy.

Financial data that may be buried in credit applications or public records can now be analyzed instantly by computer and reduced to a simple score 2 [Read more…]

  1. The collection score product is described in more detail here, in a brochure published by the Fair Isaac Company, the organization that also provides credit scoring algorithms for the credit reporting agencies.
  2. My professional colleague, Long Island, New York bankruptcy lawyer Craig Robins writes more about bill collection and bankruptcy in his excellent Long Island Bankruptcyblog.  Thanks to Craig for his excellent post about automated bill collection systems, which you can read here.

Troublesome Transfers Disrupt Bankruptcy Planning

gift for no considerationOne of the more frustrating parts of bankruptcy practice occurs when I have to tell a prospective client that he cannot file because he recently transferred property out of his name in an attempt to protect that property from creditors.  Most of the time, the transfers are made by someone who owes money to a creditor that he cannot pay and he wants to protect assets from that creditors.

Recently, for example I spoke to a man who has well over $100,000 of equity in his home and over $150,000 in credit card debt.  Recognizing the risk to his house, this gentleman executed a quit claim deed to his wife, transferring all of his interest in the house to her.  Five months after the transfer he called me to say that he was ready to file bankruptcy.  Unfortunately, I had to advise him not to file now because Section 727 of the Bankruptcy Code says that a transfer of property for no purpose other than to frustrate the intent of creditors within a year prior to filing is considered a fraudulent transfer and would prevent such a filer from receiving a discharge.

Another type of troublesome transfer can arise when an elderly parent attempts to transfer assets to an adult child in an effort to qualify for Medicaid.   Usually the problem arises not for the transferor but for the transferee. [Read more…]

Unfiled Tax Returns and Chapter 13

unknown tax liability and chapter 13 bankruptcyChapter 13 bankruptcy cases filed in the Northern District of Georgia cannot be confirmed by the bankruptcy court judge if the IRS or State of Georgia files documentation reporting unfiled tax returns.  The reason?  If you have unfiled tax returns, your potential tax liability is unknown.  Since Chapter 13 consists of a payment plan that must fit within five years, an unknown liability means that there is no way to calculate whether your proposed plan payment will work.

Further, prior to your Section341 hearing your Chapter 13 trustee will want to see a copy of last year’s tax return to (a) confirm that you have filed it, and (b) to cross check the annual income figure reported on Schedule B of your petition with the income figures shown on your tax return.

As you can see, therefore, your Chapter 13 cannot get past the trustee or the judge if you have unfiled returns.  Currently the IRS reports unfiled tax returns over the past 10+ years, so you should not assume that if your unfiled returns date back many years, you are in the clear.  In fact, the statute of limitations to determine when tax debt may be discharged in bankruptcy as stale does not begin to run until your returns have been filed.

What can you do, however, if you need to file Chapter 13 to stop a foreclosure, repossession or other emergency, and you have unfiled tax returns? [Read more…]

When Bankruptcy Makes More Sense than Struggling to Pay Off Debt

I want to challenge the conventional wisdom that filing bankruptcy should be considered a last resort. Does that sound self serving coming from a bankruptcy lawyer? Maybe. But consider this table:

Balance monthly payment time to payoff interest rate total interest total payoff
$10,000 $300 44 months 15% $3,043 $13,043
$50,000 $1,500 44 months 15% $15,217 $65,217

 

As you can see, under the best of circumstances, it will take you 4 ½ years and $13,043 to pay off that $10,000 credit card debt, assuming that: you are no longer using your credit card for future purchases you have not been late, thereby keeping your interest rate from jumping to a penalty rate you make only the minimum payment of $300 per month Under this best case scenario, $50,000 of credit card debt will require $1,500 per month and you will end up paying interest charges totaling $15,217 for payoff of $65,217.

What happens if you miss a payment? In addition to the late fees, your interest rate rises from 15% to a penalty rate, which is typically 29%. With a 29% interest rate, and a $300 per month minimum payment, your interest charge on that $10,000 balance will total $10,959 (totaling $20,959) and almost 6 years to pay off the debt.  A $50,000 balance, payable at $1,500 per month, will produce interest charges of $54,793 for a total of $104,793 over that 70 month period.

Balance monthly payment time to payoff interest rate total interest total payoff
$10,000 $300 70 months 29% $10,959 $20,959
$50,000 $1,500 70 months 29% $54,793 $104,793

 

You can run your own numbers at: http://www.cardhub.com/credit-card-calculator/

[Read more…]

Page optimized by WP Minify WordPress Plugin