Georgia Bankruptcy Filing Information

Here are the most popular questions submitted by bankruptcy blog visitors:

1. What is the status of the new bankruptcy law? Click for Jonathan’s answer

2. Will I lose everything if I file for bankruptcy in Georgia?  Click for Jonathan’s answer

3. How do I get free credit reports in Georgia? Click for Jonathan’s answer

4. What will it cost me to file a bankruptcy in the northern district of Georgia? Click for Jonathan’s answer

5. How do I get started? Click for Jonathan’s answer

Have a general question or a specific question about your own case - submit your Georgia bankruptcy question here

Frequently Asked Questions About...

• The new bankruptcy law
• Chapter 7 Bankruptcy in Georgia
• Chapter 13 Bankruptcy in Georgia
• Alternatives to Bankruptcy
• Recovering from Bankruptcy
• Choosing a Georgia Bankruptcy Lawyer
• Getting Started
   

Chapter 13 and Chapter 7 are powerful tools and may be appropriate options for you.  On this web site, we have set forth many of the questions frequently asked by our clients.  We hope that you will find this "question and answer" section useful and we invite you to e-mail us with new questions or other suggestions.

• How will the new bankruptcy law impact me?
• Should I file bankruptcy?
• If I file, will I lose my stuff?
• What are my alternatives to bankruptcy?
• What is the status of the new bankruptcy law?
• Can I make informal payment plans?
• What about Consumer Credit Counseling?
• What types of bankruptcy are available to me?
• Does Chapter 7 bankruptcy make sense for me?
• Does Chapter 13 bankruptcy make sense for me?
• How do I recover from bankruptcy? Will I ever get credit again?
• Why you should choose Jonathan Ginsberg to represent
• How much will it cost me?
• I want to file, but my spouse does not...
• What Happens in Court - Will You Prepare Me?
• How do I get started?
• Summary and contact information

How Will the New Bankruptcy Law Impact Me?

You have probably heard that the Congress has passed a new bankruptcy law and that this new law went into effect on October 17, 2005. Bankruptcy relief is still available to you and the same general principles apply. The two biggest changes brought about by the new law have to do with procedures (you have to supply a lot more information) and eligibility (the new law discourages repeat filings and it discourages filing by higher income debtors). There is a good chance that the new law will not have much of an impact on your case.

Over the past few months, I have created a new section of this website that explains the new bankruptcy law and its impact. Click to visit this new section of the web site. Also, please check out my consumer bankruptcy blog where I answer questions and post case studies. At this point the “holes” in the new law have not been filled and we are all learning as we go.

Should I file bankruptcy in Georgia?

For most of my clients, it is unsettling to realize that bankruptcy is a realistic option to solve their financial problems. In my opinion, bankruptcy is a last resort, and should only be considered when you have no chance to work out payment arrangements with your creditors.

Over the years, it has become clear to me that most people file bankruptcy to regain peace of mind. Time after time, I hear clients tell me that they decided to consider bankruptcy because of the stress of having too many bills and not enough money or the aggravation caused by collection phone calls and letters.

Not quite ready to fill out a questionnaire or talk to a lawyer. No problem. If you want some confidential information please e-mail me as I will respond to anonymous or general e-mail questions. 

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What pre-bankruptcy mistakes should I be aware of and avoid?

If your financial situation has been deteriorating, you may be tempted to take desperate measures to raise money - borrowing from relatives or retirement plans, or transferring balances to lower interest credit cards. Unfortunately, most of these last minute, desperate measures will create problems in your bankruptcy case. If you have already done any of these things, don’t despair - we can deal with them. However, if you have not done any of these actions, do not take these actions and contact our office now.  Listed below are some of the common “desperate measures” that you should avoid:

Raiding your 401(k) or pension plan - many people see their a 401(k) or pension plan as a last resort source of money. There are several reasons not to raid your retirement plan prior to bankruptcy:
 

• the money in your 401(k) or retirement plan is likely exempt property that is protected by law from the reach of creditors or the trustee. Thus, if you use up this money to delay the inevitable, you are wasting your protected retirement money
   
• bankruptcy trustees may not permit you to claim a 401(k) or pension loan repayment as a qualified budget item. As far as the Bankruptcy Court is concerned, you are repaying yourself and you may not be able to claim this repayment in your budget.
   
• raiding a pension/retirement plan may trigger income tax liability and penalties

Transferring money from a high interest credit card to a low interest credit card:

• the Bankruptcy Code treats recently incurred debt much more harshly than old debt. As far as the low interest credit card is concerned, your transfer is equivalent to a giant cash advance. If you have made such a transfer, you may have to wait several months before it would be safe to file

Making a major purchase prior to filing for bankruptcy:

• Section 523(a)(2)(C) of the Bankruptcy Code says that consumer debts owed to a single creditor and totaling more than $1,225 for “luxury goods or services” incurred by an individual debtor within 60 days prior to filing are presumed to be non-dischargeable
   
• However, it turns out that not every use of credit cards prior to filing will result in a judgment of non-dischargeability. My friend, attorney Howard Rothbloom recently won a Summary Judgment motion against MBNA in a case called Horrocks vs. MBNA America. Click on the link to read Judge Bonapfel’s Order. This case is interesting because the facts are not particularly favorable to the debtor. Howard smartly pointed out that MBNA and its counsel failed to allege or offer any proof whatsoever of their allegations. In essence, MBNA assumed that it was enough that they alleged that the debtor had used his credit cards within a month or two of filing, but the Court held that the creditor needs to present evidence of the debtor’s wrongful actions. It may very well be that evidence necessary for card issuers like MBNA to win this type of case is easily available, but it is not enough for the creditor to simply file allegations and do nothing else. Congratulations to Howard for sending a firm message to the credit card issuers. 
   
• Bankruptcy Code Section 523(a) also provides that credit obtained under “false pretenses” is non-dischargeable. In practice, credit card companies and others use this section to challenge debts obtained when the debtor was “insolvent” and “knew or should have known” that he/she would not be able to pay back the debt.
   
• In my experience, creditors, especially credit card lenders, look carefully at the following:
   
• accounts with a total outstanding balance of $15,000 or more
   
• accounts with a lot of cash advances or balance transfers within the past year
   
• new accounts
   
• accounts with unusual patterns of activity (as might happen if you lose your job and use the credit card for groceries or other cash type buget expenses)
   
• often, I counsel my clients to wait several months prior to filing to avoid these red flags
   
• Transferring assets to a relative or business associate prior to filing:

The Bankruptcy Code identifies certain transfers as “preferences” that can be undone by a bankruptcy trustee. 

Will I lose my clothes, household goods, or other property?

Usually not. Even though bankruptcy is federal law, in the State of Georgia, Georgia law controls what you can “exempt” or shelter from creditors. Examples of exempt property include your clothes, your tv, vcr, pots and pans, most furniture and personal items. By declaring this type of property as “exempt,” you keep it and no one can try to sieze it.

Cars and houses can also be “exempt.”  However, your exemption is limited to a certain dollar value. Here is some really good news: in July 1, 2001, the Georgia exemption law became much more generous - this means that you can shelter more of your property from creditors in a bankruptcy. This will make it easier to file and not lose anything.

Under the current exemption law, you can shelter up to $3,500 of equity in a car and up to $10,000 equity in a house. If you don’t have a house, you can use $5,000 of your $10,000 house exemption for your car or any other property. For married couples, you can double your exemption. Thus, a married couple can exempt $20,000 of equity in their house. Learn more about the Georgia bankruptcy exemption rules by clicking on the link.

What is the status of the new bankruptcy law?

The new law is now in effect. Attorney Jonathan Ginsberg has written a special report about the new bankruptcy law, which you can read by clicking on the link. Jonathan was also quoted in the Atlanta Business Chronicle in January, 2004 about the new bankruptcy law. 

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What are my alternatives to bankruptcy?

Before you consider bankruptcy, you should explore "non-bankruptcy alternatives." Your first step should be to request current credit reports from Equifax and from Experian (formerly TRW). Credit reports will identify your creditors and the amounts owed. Often, when you see what you owe in one place and in black and white, your total debt situation may not seem so terrible. Please read our “notice to potential clients.”

Creditors may want you to sign "consent judgments" or other legal papers spelling out the terms of your agreement to pay. In my opinion, you should avoid entering into any written contract or consent judgments with creditors without first speaking with an attorney since the paperwork you sign could contain admissions of certain facts or could waive rights.

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Can I make informal payment plans to creditors?

Once you know what you owe, you may want to create your own payment plan whereby you allocate portions of your disposable income to your various creditors. Obviously, your negotiating position improves if you can offer one or more creditors a lump sum payment. If you can get your creditors to agree to a payment plan, you should confirm your understanding in writing. As part of your agreement to pay, you should insist that negative credit references be removed when you finish paying your obligations.

If you enter into a payment plan, do your best to stick to it.

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What about Consumer Credit Counseling?

Another popular alternative to bankruptcy is Consumer Credit Counseling, a nonprofit organization financed by credit card companies and other consumer finance organizations. If your debt is not too overwhelming and you have decent income, CCCS may be able to create a payment plan that allows you to pay back your debts over time.

CCCS is also an approved provider of credit counseling and they can provide you with the certificate of counseling you need before you are allowed to file under the new law.

While CCCS is an excellent organization, they usually cannot help if you are behind on your car or house payment. They seem to be most effective handling credit card or other installment debt. Realize, too, that CCCS is a non-profit orginization created by credit card companies. Their mission is to assist you in paying back all of your credit card debt. CCCS counselors are not attorneys and they are not required to discuss with you bankruptcy or other options.

There are other "credit counseling services" you may see in the phone book, advertised on a telephone pole or advertised through unsolicited mail. Some of these services offer to clear your credit file or to get you a new credit file. Usually, these organizations are rip-offs and you should avoid them. A good rule to follow is "if it sounds too good to be true, it probably is." Before engaging and paying a private debt counseling service, do your own research. Sites like debtleap.com offer helpful articles like this one about choosing a debt management service.

Finally, you should realize that it will take a great deal of both discipline and money to pay off substantial credit card debt. For example, if you have $10,000 in credit card debt and you want to pay it off in two years, you will need to pay $520 per month; in thee years, you will need $382 per month. If you wanted to pay off the $10,000 at $200 per month, it would take you over ten years. Credit card debt is especially stubborn to eliminate because of the high (18% to 20%) interest that keeps adding up. You can figure out how long it would take you to pay off your debt by using an on-line calculator located at the Motley Fool financial website. Click on the link to visit the Motley Fool website.

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What type of bankruptcy is available to the average person?

For most individuals, Chapter 7 or Chapter 13 is what should be considered. There are other types of bankruptcy that might be appropriate for individuals in very rare situations (i.e., Chapter 12 for family farmers or Chapter 11 for individuals with millions of dollars of debts). The vast majority of individual consumers should consider only Chapter 7 or Chapter 13.

Chapter 7 Liquidation: Chapter 7 is designed to wipe out debts. It works best if you have a lot of credit card debts, medical bills, or vehicle repossession deficiencies. If you have a house or a car you want to keep, you can still file Chapter 7 - however, you will have to be current with your payments and we will have to show that you have only limited equity in those items.

If you decide to keep a particular account open (like a car loan, a mortgage, or even a credit card), you will “reaffirm” the debt by signing a “reaffirmation agreement” with your creditors. Note that creditors do not have to reaffirm with you - I can advise you whether or not a particular creditor is likely to agree to reaffirmation.

Chapter 7 is the fastest and simplest form of bankruptcy. My advice is to consider Chapter 7 first. It has also been my experience that you will recover and start rebuilding your credit more quickly after Chapter 7 more quickly than you will a Chapter 13. This is true because your Chapter 7 case will be over in 3 to 4 months, after which you can start to rebuild your credit. Chapter 13, by contrast, lasts at least three, and as many as five years. Therefore, you can’t even start to rebuild your credit for several years.

If you file Chapter 7, you will likely need to attend one very brief, informal hearing. Discover exactly what happens at a Chapter 7 meeting of creditors hearing by reading the Chapter 7 in Georgia information page. 

Chapter 13 Repayment Plan: Chapter 13 is designed to help you save property like your house or your car, if you have fallen behind on your payments and are facing foreclosure or repossession. When you file Chapter 13, we set up a payment plan whereby you pay back your missed mortgage payments and missed car payments over a three to five year payment plan.

You also pay back other debts in a Chapter 13, including credit card debts, medical bills and loans. Sometimes we can create a payment plan in which you pay back these other debts at less than 100%. By law you are required to include all of your debts in your Chapter 13 plan. In addition, you have to pay your Chapter 13 plan through a payroll deduction filed with your employer.

You can and should ask lots of questions. Unlike many of our competitors, we do not use paralegals to interview you and prepare your case. The Bankruptcy Judges and the Chapter 13 Trustees have established minimum standards for lawyers in Chapter 13 cases. For example, these guidelines obligate all lawyers to actually meet with their clients personally and provide certain information. Because we are not a high volume “bankruptcy mill” firm, you will always meet with your attorney and you will always have prompt access to your lawyer by phone or email. our practice is to offer you far more than the minimum. Click here to read what the Courts consider to be a minimum level of service for Chapter 13 representation.

If you file Chapter 13, you will likely need to attend one very brief, informal hearing.  Click here to learn what happens at a Chapter 13 meeting of creditors hearing and what potential problems (objections) can crop up.

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How do I recover from bankruptcy? Will I ever get credit again?

Although bankruptcy is about the worse thing that can happen to your credit, it’s impact will not last forever. Under the terms of the Fair Credit Reporting Act, your bankruptcy may remain on your credit report for no more than ten years (by contrast, unpaid or late loans can remain on your credit for up to seven years). In reality, however, your bankruptcy filing does not have to keep you down for ten years. With a little knowledge of the credit system and a little effort on your part, you should be able to re-establish and restore your credit within a year to eighteen months after bankruptcy.

If you think about how credit works, a lender who extends credit to an individual who has gone through bankruptcy is taking less of a risk that a creditor who extends credit to someone who has never filed.

To put it another way - to whom would you rather loan money: someone who owes hundreds or thousands of dollars on credit cards who could file bankruptcy; or someone who just got rid of their debt in bankruptcy and, in th case of a Chapter 7, cannot refile for six years?

At Ginsberg Law Offices, we see our job as having two parts - first, we will advise you about the bankruptcy process, prepare the paperwork for your filing and appear with you at bankruptcy court. Second, our job is to counsel you about rebuilding and restoring your credit.

When your case is over, your attorney will provide you with the Ginsberg Law Offices Guide to Credit Restoration and will advise you as to techniques you can use to rebuild your credit quickly. Ginsberg Law Offices is the only metro Atlanta based consumer bankruptcy law firm that offers credit restoration advice to clients emerging from bankruptcy.

Why You Should Choose Jonathan Ginsberg to represent you in your Georgia bankruptcy case?

Unless you are familiar with the law and the local rules of Court, it will be difficult for you to make an informed decision. That is why it is important for you to seek the advice of a knowledgeable and experienced lawyer. In my view, an ethical and knowledgeable lawyer will repeat to you the warning set out in the first paragraph of the Bankruptcy section of this web site - “do not file bankruptcy unless it is an absolute last resort.”

It may seem odd to you that a bankruptcy lawyer like myself is advising you not to file bankruptcy unless you have no other choice. I tell you this because it is the truth and because it would be wrong to suggest that bankruptcy is an easy way out or “something for nothing.”

The truth is that bankruptcy will negatively impact your credit for 7 to 10 years. Bankruptcy is just about the worst thing that can happen to your credit file. I encourage you to think very hard about whether to file bankruptcy, and I urge you to try any and all non-bankruptcy alternatives like Consumer Credit Counseling or negotiation with your creditors.

Bankruptcy is a very powerful tool and should be used if and only if you have come to the conclusion that you will never be able to pay off your creditors because the balances keep growing with interest charges and late fees, or you are facing an emergency like wage garnishment, foreclosure or repossession.

I have been in private practice for over over eighteen years, and I have had the opportunity to represent clients with simple cases, as well as clients with complicated cases that end up in litigation. I have a great deal of experience representing high income individuals who are seeking bankruptcy protection. With this I can usually tell you within five minutes of conversation (1) whether you should even consider bankruptcy and (2) if so, whether Chapter 7 or Chapter 13 is your best option. I will gladly discuss with you at no charge your particular debt situation in a phone call, by e-mail or in an office appointment. In exchange for a free consultation, I do ask that you complete my new client intake questionnaire prior to our office or phone meeting so I can make best use of your time and mine.

You should also feel comfortable that consumer bankruptcy is one of our primary areas of practice at Ginsberg Law Offices - we do not dabble in bankruptcy and we do not make beginner’s mistakes. Jonathan Ginsberg and Ginsberg Law Offices, P.C. have been designated as “AV” rated lawyers by the Martindale Hubbell peer review panel - an AV rating is the highest rating a lawyer can receive for both ethics and competence. For the past several years, Jonathan Ginsberg has been selected to teach consumer bankruptcy at lawyer continuing education programs as well as Georgia CPA continuing education seminars.

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How Much Will it Cost to file Chapter 7 or Chapter 13 with Ginsberg Law Offices?

Having represented several thousand clients in bankruptcy cases over the past twenty years, I understand that you probably do not have a lot of money set aside for legal fees. In fact, it has been my experience that most of my clients are honest, hardworking people who have finally come to the realization that they have no choice but to file for bankruptcy. . . and further, that most people thinking about filing for bankruptcy are short of cash.

The fees I charge at Ginsberg Law Offices are substantially less than the many thousands of dollars you would pay at an expensive downtown law firm. My fees are slightly more than what you might pay at a high volume “bankruptcy mill” firm that files hundreds of cases a month and turns responsibility of your case over to a legal assistant or a beginning lawyer with only weeks or months of experience.

At my firm, you will meet with Neena Gulley or me. Neena or I will personally prepare your case and remain available to you by phone or e-mail to answer your questions. I will meet with you prior to your actual hearing to practice and prepare you for the questions that will be asked. At your first hearing (meeting of creditors) you will not face the unpleasant situation of wandering around the three chaotic courtrooms looking for your lawyer. You will not face the embarrassment of having an overworked, inexperienced lawyer shout out your name in open court to find you.

And after your hearing, I will sit down with you to explain what has happened and what steps, if any, we must take to finalize your case. Before you leave, I will hand you a written checklist itemizing any further action that we must take, and I will personally follow-up with you by e-mail or phone to resolve any remaining issues. 

Ginsberg Law accepts credit cards (in someone else’s name!), cash, money orders, and PayPal.

For more information about bankruptcy in Atlanta and northern Georgia, click here.

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I want to file, but my spouse does not. Is that allowed and how will his/her credit be affected if I file alone?

The answer to this question depends on whether you are filing Chapter 7 or Chapter 13:

Chapter 7: You are permitted to file an individual case, even if you are married. If you file individually, only your debts will be included in the bankruptcy. If you have co-signed debts with your spouse, you will probably want to “reaffirm” those debts (sign a new agreement with the creditor and continue to pay).

If you reaffirm the debts, and continue to pay, your bankruptcy should not negatively impact your spouse’s credit. I say “should not” because federal law says so. As a practical matter, your spouse should verify that his/her credit has not been damaged by checking his/her credit report. In late 2002, a number of non-filing, credit damaged spouses filed a huge class action lawsuit against the three credit bureaus because of errors in the credit reports of non-filing spouses. It will be interesting to see how this case changes the way credit bureaus collect and verify information.

If you and your non-filing spouse have a joint credit card debt and you choose not to reaffirm, the credit card lender can (and will) look to your non-filing spouse for payment after your case is over.

Chapter 13: You are permitted to file an individual case, even if you are married. If you file individually, and you have co-signed or joint debts, you can pay the co-signed debts in full as a special payment class in your Chapter 13 plan. In most cases, you can pay co-signed debts at 100% even if you are paying other debts at 5%.

If you choose not to “protect” your co-debtor in your Chapter 13 plan, the creditor can ask the Judge for permission to collect and sue the co-debtor.

What Happens in Court - Will You Prepare Me?

For many of us, the idea of appearing in Court and testifying can be very frightening. Fortunately, Bankruptcy Court is usually a fairly pleasant place and most of the people with whom you will interact are friendly and helpful. However, it helps to be prepared and to know what to expect.

Ginsberg Law Offices has prepared a free guide to Bankruptcy Court appearances. This guide explains what happens at each hearing, including the documents you need to bring, and sample questions you will be asked. You can download this Guide to Bankruptcy Court appearances at no charge by clicking on the link.

How do I get started?

Obviously, your case is unique and Chapter 7 or 13 may or may not be right for you. If you me, you can rest assured that everything you say will be kept confidential and that my job is not to judge you but to analyze your situation. If you want to discuss your debt situation with one of us, I would be happy to talk to you at no charge over the phone or in our office. I do ask that you write down who you owe, the approximate balances, and whether your purchases are collateralized (backed by property like a car or furniture).

I encourage you to use our new client intake form to list your debts, assets, income and expenses. Call the office at 770-393-4985 and we’ll mail you our intake form, or you can download our new client questionaire and intake form as an Adobe Acrobat pdf file, or as a Microsoft Word document.

Ginsberg Law Offices can also handle your emergencies - if you are facing a pending vehicle repossession, home foreclosure or wage garnishment, we can file your case electronically within a matter of minutes at any time of day or night.

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Summary

Either Chapter 7 or Chapter 13 is a serious step that you should consider only as a last resort. Before considering bankruptcy, you should collect as much information as possible about your debts, prepare a household budget, and explore non-bankruptcy options.

If you want more detailed written information about Chapter 7 or Chapter 13, please feel free to call Jonathan Ginsberg or Neena Gulley at 770-393-4985 or write us at 1854 Independence Square, Atlanta, GA 30338. E-mails are always welcome and we will be happy to mail you information about Chapter 7 and/or 13. We would also be happy to provide you with client references. Finally, if you use AOL instant messaging, my handle is “JonathanG678.”

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