Northwest Georgia Bankruptcy Attorney

Georgia Senate Approves Foreclosure Notification Bill

Jeff Kelly, Esq. — Tue, 14 Feb 2012 10:00:05 +0000

Can you imagine having your house foreclosed without any notice?

Can you imagine living in a state where a mortgage company could take your house away from you through foreclosure without you ever knowing about it? Welcome to Georgia!

Your mortgage company currently has no legal obligation to notify you of their intent to foreclose on your home. However, in a recent online edition of the Atlanta Journal and Constitution, the paper has reported that the Georgia State Senate has approved a bill requiring mortgage companies to notify Georgia consumers before they start a foreclosure action.

Even though there is no law that currently requires them to notify you, most mortgage companies will mail you a certified letter about six weeks before the foreclosure sale date. In Georgia, foreclosures must take place on the first Tuesday of the month. Mortgage companies are required to advertise any house that they intend to foreclose in the legal county newspaper in which the house is located. They must advertise the foreclosure for four weeks prior to the sale date.

In addition, almost every homeowner facing foreclosure will receive letters from local bankruptcy attorneys explaining how Chapter 13 can stop a foreclosure proceeding.

The problem is that many loan modification companies have somehow figured out how to beat bankruptcy attorneys to the punch. Bankruptcy attorneys get names and addresses from the newspaper. In contract, loan modification companies purchase the names and addresses of homeowners who are behind on their mortgage payments long before the foreclosure action starts. Most of the loan modification company mailers are clearly scams. The Federal Trade Commission has cracked down hard on many of these crooks. Some loan modification crooks even purchase the phone numbers of potential victims.

In other cases, homeowners that are behind on payments will receive letters from potential investors who want to explore the option of bringing your house current on the payments while you agree to deed the property to them. The advantage to the investor is that the loan stays in your name. Thus, the investor gets to buy your house using your credit.

The bottom line is that a person who is behind on their mortgage payments can receive so much mail from so many sources that they just decide to ignore it all.

In Georgia, if you ignore your mail, you could end up losing your house to foreclosure without any warning.

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Asset Acceptance Gets Slapped With a 2.5 Million Dollar Fine By The FTC

Jeff Kelly, Esq. — Tue, 07 Feb 2012 10:00:25 +0000

Asset Acceptance was recently fined $2.5 million dollars because of their collection practices (click here to read an article in Business Week about this topic). To the normal person, $2.5 million dollars is a tremendous amount of money but to a company that takes in over $100 million per year, this is just a small transaction cost.

Under an agreement with the Federal Trade Commission, Asset Acceptance will now stop threatening to file lawsuits against consumers who have debts that have expired under state statutes of limitations. In Georgia, if your debt is more than six years old and a creditor files a collection lawsuit against you, you can have the case thrown out of court because it is barred by the statute of limitations. Six years old means that you have not made any payments in the last six years.

Asset Acceptance must also conduct a reasonable investigation in the basis for claiming that the debtor owes them money.

In his recent blog post, bankruptcy expert Jay Fleischman explains the debt buyer business model. Jay explains how some debt buyers play fast and loose with collection laws and how you are the prey in their hunt for the money.

The debt collection industry seems to be coming under increasing scrutiny by the federal government. A few weeks ago, I wrote a blog post about how JP Morgan has mysteriously stopped filing collection lawsuits.

Will this decrease in collection lawsuits be permanent? Will Asset Acceptance start being nice to consumers because the FTC has started getting tough with them? Will these collection companies give up on the opportunity to squeeze millions of dollars out hard working consumers who are barely making it? I think not.

I believe that the increased scrutiny will simply lead to collection practices that just barely comply with the letter of the law. Even when debt collectors play by the rules, they can still be extremely aggressive and make themselves a pain in your neck.

If you have bill collectors that are calling and threatening you, Chapter 13 or Chapter 7 will stop all of the harassment. If you would like to schedule a free consultation to discuss your situation, please call me at 706-295-0030.

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1. Who Can Wipe Out Their Second Mortgage in Chapter 13?

Chapter 13 Bankruptcy and Stripping Your Second Mortgage – Bad Idea?

Jeff Kelly, Esq. — Tue, 31 Jan 2012 10:00:03 +0000

The word is starting to get out in Northwest Georgia that you can eliminate your second mortgage in a Chapter 13 bankruptcy. I recently met with a potential client who came to see me because he was told by a coworker that he might be able to get rid of his second mortgage.

Many consumers from Dallas, Georgia all the way up to Dalton, Georgia are upside down on their houses because of the economic depression that our area is currently experiencing. While eliminating a second mortgage works for some, for others it just doesn’t.

For example, if your house is worth just a penny more than what you owe on the first mortgage, your second mortgage cannot be reduced at all in a Chapter 13 in the Northern District of Georgia.

A second example of where stripping a second mortgage in a Chapter 13 does not work is when the consumer has a really high number at the end of the bankruptcy means test.

I will further explain. Let’s say your house is in fact worth less than what you owe on the first mortgage. The next step is for your bankruptcy attorney to take a careful look at how the means test would apply in your case. Some high wage earners can end up with a really high number. When we are paying all the debts in case off at 100 cents on the dollar, this is not an issue. However, when you strip a second mortgage, the claim is treated as a general unsecured claim. Thus, if you have a really high number at the end of the means test, you could get stuck with a large Chapter 13 payment that would not work in reality.

Stripping an equity line/ junior mortgage in a Chapter 13 bankruptcy just does work for everyone. If you live in Northwest Georgia, I would be happy to sit down with you and review your entire situation to see how the bankruptcy means test applies to you and explore all options. Call me today at 706-295-0030.

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2. What is Chapter 13?

3. What is Chapter 7?

4. How much does it cost to file?

5. Stop Garnishment

Chapter 13 Bankruptcy – Is It Worth The Trouble?

Jeff Kelly, Esq. — Tue, 24 Jan 2012 10:00:45 +0000

Potential Chapter 13 bankruptcy clients frequently tell me about some horror story about a friend who filed Chapter 13 and everything went wrong.

For many people, Chapter 13 is a great tool for financial restructuring. For others, it is not the right solution. Some people need to file Chapter 7 instead. In this article, I will go over some pros and cons of Chapter 13 bankruptcy.

Pro: Chapter 13 stops the foreclosure of your home. In a chapter 13, we take the past due payments and spread them out over the life of your plan. We don’t need the permission of your mortgage company to file for Chapter 13 protection.

Con: Chapter 13 does not lower your future house payments. This is the number one reason you will hear people say that they filed their case to stop the foreclosure on their home but lost it anyway a few months later. When you make all of your future mortgage payments on time after your case is filed, the mortgage company cannot take your house. However, when you miss payments, the mortgage company will go to the bankruptcy court and file a motion for relief from the automatic stay so that they can restart the foreclosure process.

Pro: In a Chapter 13, you may be able to wipe out all of your credit card and medical debts. With these debt burdens eliminated, this should make it a lot easier for you to pay your future mortgage payments.

Con: If you have a large income that is over the median for your area of the country, you may not be able to eliminate any debt. However, even in a worse case scenario, you won’t have to pay any interest or late fees on unsecured debt in a Chapter 13 bankruptcy.

Pro: You can lower your interest rate on the amount you are paying for your car to around five percent. I’ve seen many clients come into my office who are paying more than thirty percent interest on their cars! Chapter 13 is a huge benefit to these clients.

Con: If you don’t complete your case, all that interest that would have been eliminated in your case now comes back to life. You must finish your plan payments to get this benefit from your case. The number one reason a Chapter 13 case gets dismissed is because the client loses their job in the middle of the case and can no longer afford the payments. Most people whose case gets dismissed for this reason will usually refile their case once they are back to work.

In the Northern District of Georgia, all of your attorney fees are paid in the Chapter 13 plan. As a consequence, I have zero incentive of putting you into a case that won’t work. Also, a large percentage of my new clients come from referrals. As your bankruptcy attorney, I have a strong incentive to make sure your case succeeds.

If you have any questions or would like to schedule a free consultation with me, please call me at (706) 295-0030.

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Garnishment & Collection Lawsuits in Georgia – JP Morgan Backing Off

Jeff Kelly, Esq. — Tue, 17 Jan 2012 10:00:11 +0000

The American Banker reported this past week that JP Morgan Chase and Company has “ceased filing lawsuits to collect consumer debts around the nation, dismissing in-house attorneys and virtually shutting down a collections machine that as recently as nine months ago was racking up hundreds of millions of dollars in monthly judgments” (click here to read the full article).

Why would a major bank suddenly give up on their collection efforts? Is it because they have decided to ease up on people who are hurting because of this awful economy? Of course not!

Publicly, the bank is not making any comment about why it has stopped collection lawsuits.

The article states that a whistle-blower has alleged that the bank “falsely overstated the balances of thousands of delinquent accounts it sold to a third party.” Since the bank won’t comment, we can only speculate.

So what does all this mean for Georgia consumers? I think it means that more people will be able to ignore JP Morgan Chase without fear of a collection lawsuit being filed against them. The harassing phone calls will continue but no collection lawsuits are going to be filed until they get their paperwork in order.

In Georgia, a creditor must first file a collection lawsuit against you to collect on a credit card. After they receive the judgment, they will use it to:

1. Take all of your money out of your checking account;

2. Garnish 25 percent of your net paycheck; or

3. Put lien on your house that will collect 12 percent interest per year until it is satisfied.

Many consumers will file either a Chapter 13 or a Chapter 7 to stop a garnishment or a collection lawsuit.

This past month, I have noticed a sharp drop for collection lawsuits in Floyd County, Georgia. I predict that in the short run, we will see a drop in consumer bankruptcy filings.

Eventually, JP Morgan Chase will get their paperwork in order and start trying to collect once again. Last year, they collected over 1.4 billion dollars from delinquent credit card accounts. I can’t imagine any bank giving up on that kind of revenue source.

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Bankruptcy and Exempting Equity of Your House in Georgia

Jeff Kelly, Esq. — Wed, 11 Jan 2012 02:27:34 +0000

Filing bankruptcy is a scary decision for some people who own a house in Georgia. The truth is that housing prices are extremely depressed so much in Georgia that almost no one needs to worry about the value of their house being too high.

However, some people actually have homes where the mortgages have been completely paid off. In Rome, Georgia, some houses sell for as little as $40,000.

On occasion, I will meet with an older couple who has no debt on their house but they owe a lot in credit cards.

Earlier this week, I received a call from a potential client who was upset because he mistakenly thought that he could exempt only $10,000 of the value of his house. Since he was married, I informed him that he could actually exempt $20,000.00 even though the house was in his name only. He worried that he needed to run out and add his new wife to the deed. He was a bit relieved when I informed him that this was not necessary.

He claimed to have read something on the internet which contradicted the advice I was giving him. As a result, I decided to write a blog on this topic and quote directly from the Georgia Code.

In section 44-13-100 of the Georgia code, it states in section (1) that you can exempt “the debtor’s aggregate interest, not to exceed $10,000.00 in value, in real property or personal property that the debtor or dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor. In the event title property used for the exemption provided under this paragraph is in one of the two spouses who is a debtor (emphasis added), the amount of the exemption hereunder shall be $20,000.00″.

If you have a question about how Georgia bankruptcy exemptions might affect you, why not take advantage of a free consultation and meet directly with me? We can go over your entire situation and weigh the pros and cons of filing bankruptcy.

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Bankruptcy – Should Filing Be a New Year’s Resolution for You?

Jeff Kelly, Esq. — Tue, 03 Jan 2012 10:00:20 +0000

The year 2012 is finally here and it is time to make new year’s resolutions.

For some, filing bankruptcy is a great resolution. The new year is a good time to get rid of that nasty debt that is hanging over your head and won’t go away by itself.

Some people think that the world is going to end this year because of ancient predictions. Others think that our financial worlds will crash this year. I’m an optimist. I don’t believe the world is going to end and I think things are going to get better.

For some, the first step to a better financial life is filing bankruptcy. The truth is that most people don’t want to file bankruptcy even when every reasonable indicator says they should. Most people do everything they can to try to avoid it.

The number one mistake I see people make trying to avoid bankruptcy is withdrawing everything from their 401k retirement plan and using the money to pay off debts that could have been eliminated in a bankruptcy. Not only do they lose their retirement but now they have a large tax bill from the Internal Revenue Service because of the early withdrawal penalty.

Most people don’t know that their 401k retirement plans are protected from creditors. Most people expect to lose their 401ks when they file bankruptcy. The truth is that you get to keep all of your 401k retirement.

Other people choose to ignore their debt problems. Their phone rings constantly but they just don’t answer it. Their mailbox gets filled with collection letters but they just don’t open them. The Sheriff serves a collection lawsuit on them but they pretend that it never happened.

Ignoring the reality of debt can be extremely painful in Georgia.

Once a creditor obtains a judgment against you, they can use it to garnish 25 percent of your net paycheck. Can you imagine getting a paycheck that has an unexpected twenty five percent bite out of it?

The most painful consequence of ignoring creditors is when they use the judgment to garnish all of the money in your checking account.

If you are struggling with debt problems, why not avoid the nightmare scenarios and meet with a bankruptcy attorney to see if it is time for you to get a new financial start?

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Bankruptcy – Directions to the 341 Meeting of Creditors in Rome

Jeff Kelly, Esq. — Tue, 20 Dec 2011 23:52:01 +0000

Almost all bankruptcy 341 meeting of creditors for the Rome division of the Northern District of Georgia are held in the Federal Building in Rome, Georgia.

If you get lost on your way to meeting don’t bother asking the average person in Rome “Where is the Federal Building?” or “Where is bankruptcy court?” The most likely answer you will receive is, “I don’t know.” Most people in Rome call it the old Post Office Building.

The street address for the Federal Building is 600 East First Street. Don’t bother trying to use some computer program because many of them are wrong. Many people have been late to bankruptcy court because they received bad directions from their computer program.

Please Note: If you do not bring BOTH your Social Security card and your driver’s license to bankruptcy court, your hearing will not be heard and you will have to come back at a later date.

If you are driving from Acworth/Cartersville:

Take I-75 north to exit 290. At the end of the exit ramp, take a left. You will go under the expressway and you should see a Cracker Barrel on your right. You are going to stay on this road until it dead ends. You will pass a Wal-Mart on your left. When the road dead ends, you will see a Shell gas station straight ahead. Turn left and then make a quick right. There is a stop sign at the end of the ramp onto 411/GA 20. At this point, you should see my glorious billboard. Take a right. You will by a QT gas station. After you pass the Racetrack gas station, turn right when you see the sign for Rome. You will be on this road for roughly 25 miles. As you approach Rome, you will pass by another Wal-Mart. Watch the signs carefully. You will fork to the right. You will pass a Kroger and a Home Depot. After you cross the river, you will see a CVS drugstore on your right. Take a left at that traffic light. Go thru the traffic light at the bottom of the hill and turn left into the parking lot of Federal Building.

If you are driving from Calhoun/Dalton/Chattanooga:

Take I-75 South to the Exit 312 (Rome/Fairmount). At the end of the exit turn right. You will be on Highway 53. Take a right onto state Highway 53 and follow the signs to Rome. It is approximately 23 miles from the exit to the Federal Building. At the fourth red light as you come into Rome, bear left past Old Tymer BBQ and stay in the middle lane. Go straight through the next light at Turner McCall Blvd. The Federal Building is located on East First Street, one and a half block off Turner McCall Blvd.

If you are driving from Summerville/Chattooga County:

Take Highway 27 South into Rome. This highway becomes Second Avenue once it enters Rome. You will go past Floyd Medical Center and Safe Lock & Key (on your left) and you cross the Oostanaula River Bridge. At the first traffic light in downtown, turn left. This is Broad Street. Head northeast on Broad Street toward East 6th Avenue. Turn right at East 6th Avenue. Take the first left onto East 1st Street.

If you are driving from Carrollton/Bremen/Cedartown:

Take Highway 27 North into Rome. This highway becomes Turner McCall Blvd. At the fifth traffic light (Checkers will be on your right and a brown tile building will be on your left), turn left onto Broad Street. Head northeast on Broad Street toward East 6th Avenue. Turn right at East 6th Avenue. Take the first left onto East 1st Street.

If you are driving from Atlanta Airport/Rockmart:

Camp Creek Parkway/US 278 exits from the Airport. On this road, you will travel through Powder Springs, Hiram, Dallas, and then to Rockmart. Turn right onto US 101 North in Rockmart. US 101 will become Dean Avenue. Stay in the right lane. Highway 27 North will connect with Turner McCall Blvd. At the fifth traffic light (Checkers will be on your right and a brown tile building will be on your left), turn left onto Broad Street. Head northeast on Broad Street toward East 6th Avenue. Turn right at East 6th Avenue. Take the first left onto East 1st Street.

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