January 30, 2021 / Jeffrey Kelly

How will filing bankruptcy affect my cosigner?

The short answer is that you filing bankruptcy will damage your cosigner’s credit.  How much damage?  You won’t know until after you file.

Most bankruptcy attorneys will not tell you this truth.  I recently engaged in a Facebook conversation on this topic with fellow consumer bankruptcy attorneys from other parts of the United States and received some good feedback.

One attorney explained that they avoided this topic with their clients but if the client asked the question, their answer would be “I only represent you and not your cosigner.”

The reason I think this is an incomplete answer is that it does not address the obvious future storm that will come down the pike.   

In most consumer bankruptcy cases I see, the cosigner is almost always a relative or a super close friend.  Imagine how upset a cosigner/relative/friend will be when they go to buy a new car and they get denied because their credit score was unexpectedly lowered.  This kind of surprise always ends with someone getting upset and could severely damage a relationship.  Personally, I think things go much better to warn the cosigner before the case is filed.     

Another attorney in my Facebook conversation joked that he would tell his client, “Wow, look at that car in the parking lot.”  In other words, don’t have the conversation.  Again, I think this is a bad idea because it will have to be addressed at some point.  Bad surprises are best to be avoided.  

What can a cosigner do to avoid the damage? 

In most cases, when someone is coming to file bankruptcy they are usually behind on all of their bills and the damage has already been done.  In a case where payments are current on a cosigned debt, the consigner can (1) pay off the debt to avoid damage to their credit or (2) refinance the debt 100 percent in their name only.  Option two is unlikely because most creditors like having their claws into two people to ensure payment.   

Do you have to tell the cosigner about the bankruptcy? 

The Bankruptcy Code requires you to list the name and address of the cosigner in the petition.  The cosigner will get notice of the bankruptcy filing.  Twenty years ago, I remember this client from Gainesville Georgia who was quite a character.  He told me that he was not going to tell his girlfriend ahead of time and would just wait until later.  In his case, we had to get it filed to quickly to stop a repossession.  When the girlfriend found out after the fact, you can imagine her rage.  Whoever came up with the phrase “forgiveness is easier to obtain than permission” should be violently slapped in the face because it is not true.  The client came to my office begging me to fix the situation because he was going to lose the love of his life.  There was nothing I could do after the fact.   

In a Chapter 13 bankruptcy case, we can use the cosigner protection provision to protect the cosigner from harassment and lawsuit when we pay the cosigned debt at 100 cents on the dollar along with applicable interest.  However, even in a case where we are utilizing the cosigner protection provision, we cannot protect the cosigner’s credit rating. 

To the cosigners of the world, I would like to say the following: 

1. Please don’t end a friendship or ruin a family relationship because you made the decision to cosign a loan.   
2. If the debt gets fully paid in a Chapter 13 bankruptcy case, consider yourself lucky that the only damage to you is a lower credit score. 
3. Life happens.  99 percent of the bankruptcy cases that get filed are because something happened that was out of the person’s control.  Covid 19 is not their fault.  Millions of people have lost their job because of it.  When their spouse left them with a pile of bills with kids to raise, it was not their fault.  When they got cancer and ran up huge medical bills, it was not their fault. 
4. Be merciful. James 2:13 states, “Judgment will be merciless to the one who has shown no mercy. Mercy triumphs over judgment.”  (Cobra Kai people are going to be in big trouble on judgment day.  If you have not watched the show on Netflix, you are missing a good one.) 
5. Lastly, don’t ever cosign for anyone ever again in your life.  It is always a bad idea. 

October 15, 2020 / Jeffrey Kelly

A few weeks ago, I was at a large hardware store and watched a young father and his 3 year old son walk into the store.  I was in the lightbulb section and they walked up next to me.  The father let go of the son’s hand and the son slowly began to walk away.  I am 50 years old and I’ve helped raise 5 kids.  I think I have developed some kind of sixth sense where I can detect when a drama episode from a child is about to ensue.

The 3 year old child slowly walked away from the father towards a group of Halloween decorative witches for sale.  One of the witches had a lifelike size and a button beside it that said “press here.”  I bet you can guess what happens next.  After the curious little boy pressed the button, the witch came to life and let out some terrifying warnings along with some Halloween sound effects.  As you can guess, the little boy belted out some shrill screams and he was shaking with tears.

His good father rushed to his side and comforted him.  “Everything is going to be OK” said the good father.  “The witch is not real.  She cannot hurt you.  You are safe in my arms.”

In much the same way, many people are as terrified of bankruptcy as that sweet little boy was of the fake witch.  In my 22 years as consumer bankruptcy attorney, I have seen some people do some crazy things to try to avoid bankruptcy.

Personally, I think the worst thing a person can do is drain the 401k retirement account to make payments on credit card debt until the funds run out.  Your 401k is a protected asset and you get to keep all of it when you file Chapter 7 in 99.99 percent of the cases.  It is frustrating to see people fruitlessly lose their retirement funds in an effort to avoid a clearly  inevitable bankruptcy.

Another common bad move to avoid bankruptcy is to pawn the title of a car.  When you miss your payments of a title pawn loan, the title of your vehicle transfers automatically under Georgia law.  As a consequence, Chapter 13 will not save you from the clutches of a title pawn creditor.

My friend, Richard James, has a saying that goes like this:  Fear = False Evidence Appearing Real.  In this blog post, I would like to address why some of the most common fears about bankruptcy are not real.

The most common fear is that lawyers are scary and not easy to speak with.  This is certainly not true about myself or the bankruptcy attorneys at my law firm.  Check out our reviews on Google and you will see that this is true.  We some video testimonials as well on our youtube channel.  We understand and we are your side.

Another common fear is that you will never be able to get credit again after you file bankruptcy.  Yes, Chapter 7 bankruptcy will stay on your credit for 10 years and Chapter 13 will stay on your credit for 7 years.  The truth is that most people have no problem obtaining credit once their bankruptcy case is completed.  Just ask your friends. Almost everyone has some connection to a friend or family member who has recovered from filing bankruptcy.

If you were a lender, would you be willing to loan money to someone who has a huge cloud of debt hanging over them and is going nowhere?  Of course not.  How about someone who just completed their Chapter 7 bankruptcy an owes no one?  If they have good income, how likely are they to obtain credit?  Ask a car finance company because they make loans to people who have just obtained their Chapter 7 discharge all the time.

Another irrational fear about bankruptcy is that some people believe that the trustee is going to come to their house.   I have filed thousands of bankruptcy cases and I have never heard of the trustee going to a person’s house to look at their stuff.  There are always exceptions to the rule but I’m sure it is a rare case.  When Evander Holifield filed for bankruptcy, he had millions of dollars worth of stuff.  In his specific case, the trustee had a duty to inventory his household items.  In contrast, most people don’t possess anything of significant cash value.

Personally, I think that if you have financial problems, the thing you should fear the most is procrastination.  If you put your head in the sand and ignore the problem, your creditors will obtain judgments against you.  They will then use these judgments to completely clean out your checking account and take 25 percent of your paycheck in Georgia.  In addition, if you have a house, they will put a lien on it.

There is no need to be afraid of a court hearing.  Bankruptcy Court hearings are currently virtual which reduces a lot of stress. This is the only good thing I can think of that has come from COVID-19.  This may change once we find a cure for COVID-19 or the infection rate drops dramatically but until then, I think it is going to be this way for the foreseeable future.

The bottom line is this……if you have financial issues, you should take advantage of a free consultation and talk to a bankruptcy attorney as soon as you can.  Call us today at 770-881-8449.

September 16, 2020 / Jeffrey Kelly

Do you remember where you were when you first realized that Covid-19 was going to alter the course of your entire life?  I remember the restaurant.  I remember the smells.  I remember the family members that were sitting with  me.

March 2020 was the strangest month of my life.  How do you really prepare for a national shutdown?  Do you remember the empty shelves at the grocery store?  This past six months have seemed like such a strange bad dream.

What do we do now?  Lay down and give up?  You can’t.  People are depending on you.  We have to move forward.  For many people in this country, bankruptcy is going to be a good tool to help bounce back.

After Covid-19 hit, over 40 million people in this country lost their jobs due the shutdowns.  While the stimulus money helped, lots of people still missed many months of mortgage payments and car payments.  The good news is that Chapter 13 can help people catch up on the past due payments.  Chapter 13 stops the foreclosure of your home.  Chapter 13 stops the repossession of your car.

This past week, NBC news reported that the unemployment rate has fallen back into the single digits for the first time since the pandemic began and that over 1.4 million jobs were added to the economy last month. Things seem to be heading in the right direction.

Georgia courts were shut down in March due to the pandemic.  In mid-September, they fully reopened.  I suspect that there is about to be a huge deluge of garnishment orders coming down the pipe.  Unfortunately, most people wait until the very last second to do anything about a garnishment.

Georgia garnishment law is brutal.  Once a creditor obtains a judgment against you, they can take 25 percent of your net paycheck.  The good news is that Chapter 13 can stop the garnishment as soon as we get a bankruptcy case number.

To illustrate how Chapter 13 and Chapter 7 can help people bounce back from Covid-19, I would like to tell a story about a young couple I recently spoke with.  To protect their privacy, I will alter some of the facts of the case.  This young couple has three children.  Before Covid-19 hit, they both worked full time jobs.  After the pandemic hit, their local daycare completely shut down.  In addition, their local elementary school also closed and moved everything online.  With no one to watch the kids, they decided in their particular situation, it would be best for the wife to quit her job because the husband was earning more.

About a year ago, they both realized that the minimum credit card payments they were making were slowly slipping out of their reach.  To their misfortune, they heard a debt settlement commercial on the radio that promised the moon and the sun.  They called the phone number, set up a payment plan and assumed all was well until the sheriff showed up.

A few weeks ago, to their horror and dismay, the local sheriff pulled up into their driveway while they were playing in the front yard and served them with a collection lawsuit.  At first, they thought that there must have been some kind of misunderstanding.  Then, they called the debt settlement company only to discover that most of the money they had paid out over the past year went to the fees of the debt settlement company (I hear the exact same story from clients all the time).  Furthermore, they learned that they debt settlement company had zero legal means to prevent the collection lawsuit.

In contrast, when a person is in an active Chapter 13 case, no one can file a lawsuit against you.  Creditors cannot call, garnish, or bother you while your case is live.  You get great protection from the bankruptcy court.

This young couple was extremely frustrated to learn that they had essentially wasted a year with the debt settlement company.  The good news is that we were able to get their house and cars protected with a solid Chapter 13 plan. Also, we were able to eliminate all of their credit card debt.

Chapter 13 helped this young couple and I believe it is going to help thousands of consumers in Georgia bounce back from Covid-19.

August 3, 2020 / Jeffrey Kelly

One of the few good things to come as a result of the Covid-19 pandemic is that you can now file bankruptcy without ever leaving your house.  You can even “attend” your court hearing via telephone now from the comfort and safety of your home.   

Before Covid-19 hit, you had to physically appear in one of our offices and a bankruptcy attorney had to see you physically sign the documents.  For many people who have to juggle busy work schedules and family schedules, it was difficult at times to physically get into the office.  Traffic delays used to wreak havoc on getting some of our sign appointments completed. 

Now, because of the shelter in place concerns, the Bankruptcy Court allows us to file your case without you ever having to come to one of our offices.  Here is how the process works:   

Step 1:  We conduct your free initial consultation with you by phone.  During this phone conference, we want to review all of your debts, lawsuits, assets, income and expenses with you.  Our goal is to get a feel for your entire situation.  At the end of this free consultation, we will clearly explain to you why Chapter 13 or Chapter 7 bankruptcy is or is not a good option for you.  Unlike many other bankruptcy law firms, you will be able to talk directly to a bankruptcy attorney who will closely analyze the specific facts of your case.  In addition, we will answer all of your questions.   

If you decide to move forward with either Chapter 13 or Chapter 7 bankruptcy, we will need you to give us your social security number and your birthdate so that we can pull a credit report for processing your bankruptcy petition.  If you have received any lawsuits or other bills you would like for us to include in your case, you can take a picture of the documents and email them to us.  if you have access to a scanner, it might be easier for you to send them to us that way.  

Step 2:  The sign appointment.  During this appointment, which will take about two hours on average, we will do a screen share with you so that you can go through each page of the bankruptcy petition to make sure it is absolutely perfect.  We will use a program called Docusign so that you can electronically sign the court required signature pages.  We can file your Chapter 13 or Chapter 7 bankruptcy case shortly after your sign appointment so that your court protection will begin immediately.  We will mail you a hard copy of the bankruptcy petition after your case is filed.  Then, we will need you to sign it with a pen and mail the documents back to us.    

Your Court hearing:  Until October 2020, all bankruptcy court hearings will be conducted virtually over the telephone.  This means you can currently “attend” your court hearing without ever leaving your house.  Normally, you have to appear physically in court for your 341 Meeting of Creditors.  Before Covid-19, you would have to wait in the security line, get scanned by the guards, and then go sit in a room full of people and wait for your name to get called.   

Personally, I am hoping that all of the changes that have been made to our bankruptcy system as a consequence of Covid-19 will become permanent.   

Call us today at 770-881-8449 for your free consultation with a bankruptcy attorney. 

June 25, 2020 / Jeffrey Kelly

It is no secret that a tidal wave of bankruptcies are coming down the pipe soon.  Over 40 million Americans have lost their jobs at some point during this Covid-19 government forced shutdown of our economy.  For almost five months, creditors in Georgia have not been able to get orders on the collection lawsuits they have filed.  This lack of enforcement has created a false sense of security for a lot of people.

This false sense of security is about to get blown away once courts are allowed to operate at full capacity in mid-July.  A tidal wave of bankruptcies is coming.

Along with the tidal wave, a predictable nightmare is coming for many consumers in Georgia.  After the courts reopen, some person is going to get their wages garnished out of the blue.  They are going to see 25 percent of paycheck disappear.  Someone who is expecting to see $500 in their paycheck will see only $375.  Someone who has a few thousand dollars in their checking account is going to see it all disappear.  Rent payments will not be able to get made.  Mortgage payment will not be made.  Car payments will not be made.  Disaster.

I imagine that many people who procrastinate will be calling bankruptcy attorneys in late July 2020 only to heard these awful words, “I am so sorry but we are fully booked.”  “I’m desperate” or “you have to help me” is not going to add any time to any bankruptcy lawyer’s day to help you.  Don’t wait!

This nightmare could easily be avoided by planning ahead and talking to my office ahead of time.  Don’t wait until after the tidal wave hits.  When all the office slots fill up, you may be out of luck.  There is no way that bankruptcy law firms will be able to handle all of the cases.

Those of you are in financial trouble know who you are.  Don’t wait for the crisis to hit you.  Take action right now and call us today.

Georgia courts are not able to enter orders in most cases until mid July.  This order could be extended.  If everything is reopened in mid-July,  there will be an almost 5 month backlog of cases.  Creditors are chomping at the bit to get paid and I imagine that they will move as fast as humanly possible to get garnishments going and levy as many bank accounts as is possible.

Almost every bankruptcy firm that I know of has been forced to furlough at least half of their staff.  When filings finally start to pick back up, most firms are going to be in the get out of debt/ replenish savings mode.

In answering this question, it important to understand the different types of bankruptcy. 

What is Chapter 7?

Chapter 7 is where you typically eliminate of your debts.  Many people like to refer to Chapter 7 as the “fresh start” provision of the bankruptcy code.  To qualify for Chapter 7 you must have no money left in your budget after you pay all of your living expenses.  In other words, you are ending every month on zero. 

In addition, you must pass the means test.  To pass the means test, your family must have a monthly income that is lower than the average family of your size in your region as determined by the IRS.  These numbers are updated every quarter.  As of the date of this writing, the means limit for a family size of two people in our area is 65,007.  As a general rule, if a family size of two people has income higher than this limit, they most likely won’t be able to qualify for a Chapter 7 bankruptcy.  However, there are exceptions for people who are slightly over the limit.  If someone is making twice the limit, there is no way they are going to qualify for a Chapter 7.  Instead, they will need to look at a Chapter 13.

What is Chapter 13?

Chapter 13 is often referred to as the “catch your breath” provision of the bankruptcy code.  It is a great tool for people who have some money to pay towards creditors but cannot do it when they come piling down on top of you at the same time. Chapter 13 allows you to get court protection and step back so that you can catch your breath. Unsecured debt can be eliminated in a Chapter 13 just like a Chapter 7 but over a longer period of time.  Chapter 13 is a great tool for catching up arrears on house payments, catching up past due car payments and stopping garnishments. 

How much will you have to pay back in a Chapter 13?

The answer this question will depend on (1) what is your number at the end of the means test (2) how much money do you have leftover at the of the month on your budget after your living expenses have been paid and (3) how much exposed equity do you have in any assets.

Can you have too much debt to qualify for a Chapter 7?  The answer to this question is no.

Can you have too much debt to qualify for a Chapter 13?  The answer to this question is yes.  Currently the debt limit for unsecured debt in a Chapter 13 is $419,275.00.  The debt limit for secured debt is $1,257,850.00.  Every 3 years, the debt limits are adjusted based on the Consumer Price Index.  Debtors who don’t qualify for Chapter 13 must file either a Chapter 7 or a Chapter 11.

Typically, Chapter 11s are business cases.  The focus of my practice is Chapter 13s and Chapter 7s.

If you are struggling with any debt issues, the obvious smart move is to take advantage of a free consultation and explore your options.

How to prepare for a consultation

It is extremely helpful if a person is able to obtain copies for their paycheck stubs for the last six months so that we can take a shot at the means test.  Another helpful preparation is to obtain your free copy of your credit report at www.annualcreditreport.com 

If you are not able to come directly to one of our offices, we can conduct your initial consultation via phone or we can use zoom. 

Currently, you can file your bankruptcy case without ever leaving your home.  In addition, all bankruptcy hearings are currently conducted via phone as well. 

Give us a call today and start taking action to make the stress go away.

In the state of Georgia, filing for Bankruptcy was something that is only done in person. As we take more and more time away from public spaces, in-person filing and signing is nearly impossible to achieve. This is because the documents themselves needed to be signed in person.

Luckily, recent developments show that the State has thought of these concerns and is acting accordingly.

Remote Filing is Now Possible

Georgia wants to help make it a little easier for everyone to do the right thing and remain at home. As such, they made it possible to file and sign for bankruptcy at home without ever needing to step into the courthouse.

Unfortunately, there are necessary meetings, such as the 341 Meeting of Creditors, that still lack clearance to take place in a remote setting. New changes are made every day and, as a lawyer and citizen, I hope this is something they change in the near future.

While this process is far from perfect, in this time of great need, each new exception makes filing for bankruptcy just a little bit easier.

Should I File For bankruptcy?

There are several reasons you may consider bankruptcy. Perhaps it was on your radar before the coronavirus outbreak, perhaps it is a new pathway you discovered while dealing with unexpected financial hardships.

With the economic challenges that present with COVID-19— missed work, reduced or eliminated income, and potentially long lasting medical expenses for those affected— many look into bankruptcy as an option to regain control of their finances.

Here’s the thing: bankruptcy is not the right choice for everyone. Talking to an attorney before you file is integral to your decision making process. Not only are there different types of bankruptcy to consider, but there are some cases where filing for bankruptcy may be a step in the wrong direction.

I understand how difficult it is to make this decision on your own because there is a lot of information on the internet. Not only that, but a simple misunderstanding of the law could result in a botched job.

This is why I offer a free consultation with individuals who are thinking about bankruptcy.I can help you decide if bankruptcy is your best option, which type of file for, and even address any special circumstances you may experience.

If you decide bankruptcy is the option you need, we schedule a 1-2 hour appointment, done remotely through Zoom. That’s where we go over your situation in detail (and in plain english).

Bankruptcy is a Permanent Solution

You don’t want to make the decision to file for bankruptcy without all the right information upfront. This is a permanent legal decision with a long-lasting impact on your financial health lasting up to ten years.

Making a positive impact on the lives of others is why I opened up the Jeffery B. Kelly Law Office— I want to make sure each one of our clients leaves in a better position than when they came in and my staff feels the same.

Our team is effective and responsive to your questions, helping you file and complete your bankruptcy without having to worry about confusion or legal jargon. Give us a call today at 770-637-1756 to find out how we can help.

Below is a quick article to help you in deciding whether bankruptcy can help your financial situation, some points to consider, and where to contact an attorney for help.

Chapter 7 vs. Chapter 13

We could spend quite some time going into the differences between Chapter 7 and Chapter 13 bankruptcy, but for the purposes of understanding the advantages of filing, we will just need a quick overview.

Chapter 13 (repayment)

Chapter 13 is designed to help you “catch your breath.” Chapter 13 is the longer of the two filings to complete, but stays on your credit report for a shorter period of time.

This is the most common type of filing for someone who, for example, unexpectedly lost their job for an extended period of time and is now trying to stop a foreclosure.

This would come through entering a mortgage arrearage and distributing past-due payments over a period of three-to-five years.

To figure out that monthly payment amount, I will propose a budget for you and a manageable monthly payment amount. Your payments will be paid to a trustee appointed by the court, and not directly to your creditors. This is so you can avoid making multiple payments to multiple creditors, and instead just make one monthly payment to your trustee.

In almost every Chapter 13 case, interest on credit cards and other unsecured debt is completely frozen.

Chapter 7 (liquidation)

Chapter 7 is designed to help you get a “fresh start” to your debt and finances. This is the most common type of bankruptcy for someone who has an unmanageable amount of medical or credit card debt, as it cleans the slate of these expenses.

Compared to Chapter 13, this type of bankruptcy is shorter to complete but stays on your credit record for longer.
It must also be noted that to qualify for Chapter 7 bankruptcy, you must meet certain income requirements. If your income is higher than allowed, then Chapter 7 may not be an option for you. To know for sure in your situation, you need to get me copies of your paystubs for the last six months so that I can determine where you land on the means test.

Unfortunately, in both cases your credit score will take a hit. While this is unavoidable, it does not outweigh the benefits of filing for bankruptcy.

Bankruptcy Advantages: Forgiven Debt and Buying Time

Federal Bankruptcy Law requires a “means test” to determine whether you qualify for Chapter 7 or Chapter 13 bankruptcy. When we meet with you to review your situation, we will apply these tests to your case to determine your best options.

Chapter 7 and Chapter 13 bankruptcy can have both pros and cons depending on your situation, but generally individuals who file are the ones who desperately need the benefits no matter the cost. Some benefits of bankruptcy include:

• Filing for bankruptcy will trigger an automatic stay, which is a legal term that means your creditors will need to stop collection action immediately. They will not be able to repossess your car, foreclose on your home, call you, send you collection letters or file a lawsuit against you.
• In some cases, bankruptcy might allow you to discharge certain debts altogether.
• In some cases, you can go through the bankruptcy process without losing any of your property, including your car and your home.
• You might be able to begin rebuilding your credit shortly after your bankruptcy case completes.

For struggling individuals, filing bankruptcy can offer necessary relief from impossible payment demands and harassing phone calls. Below are some of the top advantages to filing.

A Final Note on Automatic Stays

The automatic stay is a financial lifeline for many individuals. Essentially, the moment you file for bankruptcy you get protection from your creditors via the automatic stay. This means they cannot collect on their debt, cannot badger you with phone calls, and cannot take your vehicle away from you.

While it is normally active the entire duration of the bankruptcy, this can change under a few circumstances.

This first circumstance is if a creditor wants to pursue you after your case is filed, they can file a Motion for Relief from the Automatic Stay. If this is granted by the court, your stay will no longer be in effect and your creditors can begin collection attempts again.

The second circumstance is when you have filed for bankruptcy more than one time. Refiled bankruptcy cases have different rules that depend on the dismissal dates. If you want to know how your prior bankruptcy cases may affect a new filing, take advantage of a free consultation and get legal advice from an experienced bankruptcy attorney.

Contacting a Bankruptcy Attorney

I have been practicing law since 1998 and have over 22 years of consumer bankruptcy law under my belt.

I understand how important it is for individuals to get the financial help they need in times of trouble and I dedicated my law office to doing just that. With our experienced staff of attorneys, you can call anytime for a free consultation at (770) 637-1756 and start discussing the advantages and disadvantages to filing Chapter 13 and Chapter 7.

What does a botched divorce look like, exactly?

Most commonly, you see the caretaking parent revoking rights to many assets that would otherwise be awarded to them in exchange for keeping their home and children. This is neither fair or necessary in family law, but an unfortunate reality for many individuals who try to file for divorce on their own.

Adding insult to injury, this agreeableness usually results in that same spouse footing the bill for their own legal fees, adding to the burden of their monthly expenses they may or may not be able to afford.

As such, it’s important that you always retain a lawyer in your divorce case.

Setting an Example

So as to get through the following possible situations where a bad divorce may result in unexpected financial consequences later on, we are going to use a hypothetical situation.

Let’s say that you were divorced several years ago and agreed, along with your spouse, that you would keep the home you and your family lived in. This is usually followed by filling out a quitclaim deed (a document used to transfer the ownership of property from one individual to another).

After you and your spouse go separate ways, you might think your ties to one another are severed. Depending on your paper trail, this might not be the case.

When an Ex-Spouse Files for bankruptcy

After your separation, you or your spouse might find yourself in a challenging financial situation. There may be joint debts to contend with, unexpected filing fees, unmanageable living expenses, and a whole host of challenges that come after two individuals go through a financial separation.

Depending on the situation of you or your ex-spouse, it may be a good idea to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy depending on your needs. If you choose to file, this could help with bills by enacting an automatic stay (which prohibits debt collectors from collecting on your debts), restructuring your monthly payments to be manageable (such as in Chapter 13) or even completely absolve suffocating credit card debt (such as in Chapter 7).

However, be cautious. For individuals who filed for divorce themselves, choosing bankruptcy could have severe and unexpected consequences for their previous spouse, especially if their paperwork was not properly completed.

When an Ex Comes Back to Haunt You

This is when problems start to occur– potentially years down the line. These issues, commonly, fall into two categories: unfinished quitclaim deeds and cosigner debt.

Quitclaim Perils

In the above situation, many people are not aware that a step is missing: the quitclaim deed needed to be recorded in the local courthouse. Without this step, the deed is not active. Therefore, if your former spouse filed for bankruptcy, their creditors can consider your home a retrievable asset.

Signer and Cosigner

As the name suggests, cosigned debt is that which you are responsible for as a cosigner to a loan. Being a listed signer, you have an equal financial responsibility to the loan, even if you are not the one making payments. As such, if you are cosigned on a loan which you ex-spouse later defaults on, it will result in creditors coming after you.

Furthermore, this loan (and lack of ability to pay it) will show up on your credit report, as well.

When to Contact a Bankruptcy Attorney

No one wants to be stuck in a situation where they are being punished for their ex-spouses debt. Unfortunately, it happens more often that people recognize. If you find yourself in a similar bind, it might be time to contact a bankruptcy attorney.

Making a positive impact on the lives of others is why I opened up the Jeffery B. Kelly Law Office— I want to make sure each one of our clients leaves in a better position than when they came in and my staff feels the same.

Our team is effective and responsive to your questions, helping you file and complete your bankruptcy without having to worry about confusion or legal jargon. Give us a call today at 770-637-1756 to find out how we can help.

Over the past few weeks, the Dow Jones Industrial average has dropped about 12 percent. Personally, I think it is going to drop a lot more. I would not be shocked to see it drop to 16,000 before the year is over.

Many medical experts say that the corona virus may take as long as 3 weeks to full recover. What is going to happen to the average American worker who has to miss 3 weeks of work? Most Americans don’t get paid when they miss work. I think the problem will be compounded for those of us who have children. When a child contracts Corona at a different time, this may add to another 3 weeks of being out of work. For many households, mortgage payments and car payments are going to get missed.

What is going to happen if you live in an area that is quarantined for 4 weeks? Can you work from home? What will happen to the people who cannot?

Furthermore, as this economy comes to a screeching halt because of the corona virus, layoffs are going to take place. Even if you have a super human immune system, you most likely will still be affected by the economic fallout.

Eventually, the corona virus cycle will end and we will all bet back to work. This is when I think Chapter 13 is going to be crucial in helping people recover.

When a person falls behind on house or car payments, Chapter 13 is a great tool to help catch those payments up. For example, let’s say a person misses 3 months of work because of sickness or layoffs. In Georgia, a mortgage company can start foreclosure over just one mortgage payment. However, in almost every case, the mortgage company will wait at least 3 months. The mortgage company has to advertise the house in the foreclosure section of the legal organ for the county in which the house is located for a period of 4 consecutive weeks before the foreclosure date. With Chapter 13, we can create a plan to catch up the house payments and stop the foreclosure.

We can do the same things for cars. If a person is being threatened with car repossession, Chapter 13 can stop the repo and allow a person to pay for the car through the Chapter 13 plan.

For a person who might get overloaded with medical bills, Chapter 7 will be an option. With Chapter 7 bankruptcy, you can eliminate all of your unsecured debt if you qualify.

The bottom line is that we will get through this crisis and live for a great future. Don’t give up hope.