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Being faced with the possibility of bankruptcy is often overwhelming. For many people, the sense of failure that comes with bankruptcy keeps them from moving forward, making things even worse. If you’re struggling financially, it’s important to seek reliable information about your options.
If you’re reading this, you’re probably under tremendous pressure financially. You may feel as though there’s no way to climb out of the debt you’ve accumulated. You may be behind on your bills and your mortgage. You are probably stressed and wondering who can help you with a bankruptcy case.
We are here to help. Our firm offers free legal consultations. Call our Georgia bankruptcy attorneys in Statesboro, Springfield, and Swainsboro today.
Don’t let your situation go on another day; inaction in these situations only makes them worse. Give us a call as soon as you can and schedule a free legal consultation.
The information below will help you understand your bankruptcy case. We’ll begin by making you aware of some of the common ways you can accidentally damage the value of your claim. Next, we’ll use a client story to illustrate additional mistakes you can avoid. Be sure you read to the end to learn as much as possible.
Common Bankruptcy Case Mistakes
There are several mistakes you can avoid in your bankruptcy case simply by being aware of them. Read through a few of the most common mistakes below to protect your claim.
Repaying a Family Member Instead of Your Creditors
Some people on the verge of bankruptcy figure that payments to their creditors won’t make any difference in the overall solution, and instead focus on paying back money they owe to family members.
While it’s important to maintain your family relationships, know that the law does not permit you to repay family members at the expense of your other creditors. If the bankruptcy trustee discovers payments to a family member in lieu of a debt to a creditor, that money can be reclaimed within a year of filing for bankruptcy.
Running-Up Your Credit Cards
Once you decide to file for bankruptcy, you need to stop using credit cards. If you make purchases within 90 days of filing, they may be considered non dischargeable — meaning, the bankruptcy will not eliminate those debts.
The same rule applies to large cash advances. The last thing you need is to trip yourself up with new debt just as your old debt is wiped out.
Borrowing Against the Value of Your Home
Getting a second mortgage or a home equity line of credit (HELOC) to pay your consumer debt is a mistake. While in many cases, you can file for bankruptcy in a way that does not jeopardize your ability to keep your home, borrowing against your home puts it up as collateral.
Debt that is extended to a person because they put up collateral is called “secured debt.” When you borrow this way, whatever you’ve put up as collateral can be taken away if you don’t pay back your debt on time.
Taking out a second mortgage or HELOC means you just volunteered your home as payback toward that loan if you can’t make your payments. Don’t turn your unsecured debt into secured debt; borrowing against your home is a mistake.
Raiding Your Retirement Account
Your retirement account is probably protected from being collected to pay back your debts. If you turn to it to avoid bankruptcy, not only will you be throwing “good money after bad,” but there is likely to be a very steep penalty, leaving you with very little to put toward the debt you’d hoped to repay in the first place.
Not to Hiring a Lawyer as Soon as Possible
Reacting to the understandably scary possibility of bankruptcy with denial is not uncommon, but it leads to a “domino effect” of problems. People in denial often fail to take any action toward a solution to their problem, including finding an attorney to give them guidance about bankruptcy.
Waiting is only going to make things worse. If you’re worried about bankruptcy, it’s much better to tackle the problem head-on than “bury your head in the sand.” Our Georgia bankruptcy attorneys will educate you about the bankruptcy process and your options for discharging debt. If you then choose this route as your best solution, our attorneys will guide you through to make it as stress-free as possible.
Hiring the Wrong Attorney
If you’re looking for someone to help with your bankruptcy case, don’t turn to just any attorney. Like doctors, lawyers specialize in dozens of practice areas. You wouldn’t seek help for a respiratory problem by going to a cardiologist. Don’t hire a divorce lawyer to handle your bankruptcy case.
The best person to help you with a bankruptcy case is a bankruptcy lawyer.
Georgia Bankruptcy Client Story
We’re sharing the following story in hopes of answering additional questions you may have about your bankruptcy. The names and details have been changed to protect our clients’ privacy, but the information’s value remains. Please read to the end to get additional information about bankruptcy cases. Then contact us to discuss your specific claim.
Not so long ago on a hot, hazy evening in mid-July just outside of Statesboro, Georgia, Joe Malkin arrived home to find his wife, Holly more than a little upset.
The darkening sky was heavy with the smell of ozone, and the wind began to tussle the bridal wreath bush beside the steps to the mudroom door as Joe pulled it open. He saw Holly washing dishes at the sink as he came out of the mudroom into the kitchen. He smiled, his mouth open to greet her when the wet, soapy dish sponge hit him in the face.
“Have a good day, today, Honey?” He asked, peeling the forlorn sponge off the floor with dread as he wiped his rough sleeve across his tongue. The soap tasted as bad as he’d imagined it would.
Holly rounded on him with a fist of pink overdue letters.
“When were you going to tell me about these?” Holly asked, waving the envelopes in the air. “Or were you going to wait until we started getting nasty calls from collections?” Her voice was shaking.
Joe stood still and let her vent. He deserved it. He’d told himself he was protecting her from stress when he’d shoved the overdue notices into his junk drawer — known by his wife as “the black hole” in his nightstand.
He knew hiding the overdue notices wasn’t actually a solution, but he kept hoping he’d “figure something out.” But now it was back in his face, literally, as Holly balled them up and threw them at him one at a time as her voice rose.
Like the sponge, the letters bounced off his face and fell to the floor. The next thing she launched at him was herself.
Holly Malkin wasn’t a small person by any means. She was five-foot-eight and a half, and even at forty-eight, well-muscled and strong from many years of hiking and jogging. Luckily for Joe, he was twice the size of his wife. He caught her against him and wrapped her up as she continued her tirade. She let him holder as she vented, not really wanting to hurt him. Deep down she knew their financial situation wasn’t his fault, either.
Joe and Holly had gone through a tough year. Joe lost his job in January, after seventeen years at a large food manufacturer outside of Statesboro. All those years of dedication and the company was bought-out; he wasn’t even given the dignity of severance pay. He knew he wasn’t the only one; dozens of jobs evaporated as redundant positions had been eliminated. Didn’t make it any harder to swallow, though.
Joe and Holly had limped along on her teacher’s salary for three-and-a-half tense months until Joe found a job seventy miles away with another manufacturer. Though grateful to be employed, he was back at the bottom of the seniority pile and bringing home half of what he’d previously been paid.
They managed, through heroic effort, to kept up with their bills until late May. Even as Joe’s paychecks began trickling in, though, staying caught up didn’t seem likely, much less getting ahead. After groceries, they were left deciding between paying the mortgage or the rest of their bills.
As the tension grew, the couple began to bicker, too stressed to stop themselves, even though they knew it wasn’t helping. After a while, they stopped talking about the problem entirely, carefully stepping around it like the “elephant in the room.” They paid what they could and continued stoically plodding forward, ignoring the fact that their budget would not recover unless they reached out for help.
Now, standing in the kitchen, Joe continued to hold his wife. She’d stopped fighting and her tears fell with the rain. They stood like that for a long time. As Holly quieted, Joe kissed the top of her head and told her he knew what to do. A former colleague who’d also lost his job with the take-over told him about Hall & Navarro, a Georgia law firm specializing in bankruptcy cases.
“If anyone can see us through this, it’s them,” Joe said into his wife’s hair.
She looked up, wiped her eyes, and smiled. “Okay,” she said, “Let’s call.”
We met the Malkins in our Statesboro office the next day for a free legal consultation. Their first question was whether they were in the right place.
What Are the Benefits of firing for Bankruptcy?
“Can filing for bankruptcy help us?” Joe asked. “I mean, I feel like it’s just giving up and conceding defeat.”
“We get that question a lot, Joe,” said Attorney Michael Hall. Let’s start with what bankruptcy is.
“Bankruptcy is a process set forth by the federal courts that enables people or businesses to discharge accumulated debt. It may eliminate all or part of a person’s debts; depending on which type of bankruptcy is filed. In some cases, a small fraction of the original amount owed is repaid instead of the entire debt.
The process of bankruptcy can help to free you of debt from credit cards and other bills, such as tax bills and medical bills, for example. Bankruptcy can also put a stop to threats of foreclosure and calls from angry creditors and collection agencies.
“Bankruptcy can also help you keep your home and your vehicle, as well as retirement savings, social security benefits, and disability benefits. It’s also a way to prevent wage garnishment, and fixed assets like your furniture, from being taken from you.
“Bankruptcy does impact your credit score, but there are ways you can rebuild it. Just as you didn’t get into debt overnight, you’re not going to recover your credit score overnight. You’ll need to be patient and diligent with spending and communication, but for those who need the assistance bankruptcy provides, it offers a fresh start.
“The good news is, you’ve taken the hardest step,” said Michael Hall. “You’re here. Everything gets easier after that first step of asking for help.”
What is involved in filing bankruptcy?
“What does the process look like?” Holly asked.
“It starts with demonstrating that you in fact need to file for bankruptcy. This involves proving you are unable to repay the debts you have. It also requires you go through credit counseling with a government-approved credit-counselor.
“Boy, if that isn’t an oxymoron,” Joe mumbled to Holly, who kicked him under the table.
“When you file, we’ll help you determine whether you qualify for Chapter 7 or Chapter 13. Either one will help you stop foreclosure actions and discharge unsecured debt. Either will also help halt wage-garnishments, repossession of vehicles, and utility shut-offs. The difference is the methods each type of chapter employs to achieve these things.
“So, bankruptcy does not mean losing all of your assets. The government actually allows for exemptions to protect property and assets from being taken, to help those who utilized it get that new financial start I mentioned.
Do I have to appear in court if there is a collection pending?
“So, does this mean we don’t have to show up in court for any collection proceedings?” Joe asked. “We’re supposed to appear on one the day after tomorrow.”
“Don’t skip any court dates until you’ve got your bankruptcy case filed. Continue to comply with appearances as requested until then,” said Michael Hall. “If you decide to move forward with us, we’ll guide you as to what you do and don’t need to appear for.”
Will it help if we take the house out of our name?
“What about transferring the house to our daughter?” Joe asked. “Will that do any good, just to give us extra protection?”
“No,” said Michael Hall. “In fact, it can hurt your case. Any transfer made inside of two years of filing bankruptcy can be undone by a bankruptcy trustee if it appears the transfer was made to keep property from a creditor.
You don’t want to make things worse, and as I said, in many cases, you’ll be able to keep your home. Your best move right now is to show up for any court dates you have before your filing is complete and work with an experienced bankruptcy lawyer to move your case forward.
“Getting back to your first remark, Joe, about bankruptcy feeling like ‘conceding defeat,’ please know that the opposite is true. This process was put in place to help people like you who are struggling through difficult circumstances,” said Michael Hall. “Rather than giving up, you’re making a choice to take the action necessary to help your family through this. Please try to think of it as taking a positive step to empower your family.
“And if you choose our firm, we’ll be by your side all the way to help you through the process and ensure you meet all government regulations along the way.
The Malkins were satisfied with what they learned during their free legal consultation with the Hall & Navarro Law Firm. They retained the firm, filed for bankruptcy and went through credit counseling.
They were able to keep their home and vehicle, and over the past few years, successfully paid off their car. They continue to rebuild their credit scores using a secured credit card for small purchases, paying more than the minimum, on time every month.
They also learned positive communication skills that keep their relationship strong, especially in tough times. If you ask them today, they’ll tell you that bankruptcy was the new beginning they needed.
Call Our Georgia Bankruptcy Attorneys Today
Are you or a loved one in the process of filing for bankruptcy in Georgia and have questions about your spouse’s bankruptcy affecting your credit in Georgia? Contact the experienced Georgia bankruptcy attorneys at Hall & Navarro in Statesboro, Springfield, and Swainsboro today for a consultation and case evaluation.
We can help get your life back on track.
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