Frequently Asked Questions

Bankruptcy

WHERE WOULD MY BANKRUTPCY CASE BE FILED, AND WHERE WOULD THE HEARINGS BE HELD?

Morgan & Morgan handles bankruptcy cases in the Middle and Northern Districts of Georgia. In most cases, a bankruptcy must be filed in the District in which you live.
MIDDLE DISTRICT OF GEORGIA
The Middle District covers a large area across the State from Southwest Georgia to Northeast Georgia. The cities and counties in our area that fall within the Middle District include the following:
COUNTY CITIES

Clarke Athens, Winterville
Madison Danielsville, Hull, Colbert, Comer
Walton Monroe, Loganville, Social Circle
Oglethorpe Lexington, Crawford
Oconee Watkinsville, Bogart
Greene Greensboro, Union Point
Morgan Madison, Rutledge, Bostwick
Putnam Eatonton
Franklin Royston, Franklin Springs, Bowman, Carnesville, Lavonia
Hart Hartwell, Canon

Cases filed in the Middle District from the Counties above are filed with the Clerk of Court in Macon. However, any meetings and hearings are usually held in Athens.

NORTHERN DISTRICT OF GEORGIA

The Northern District covers a large area across North Georgia. The cities and counties in our area that fall within the Northern District include the following:
COUNTY CITIES

Barrow Winder, Statham
Jackson Jefferson, Commerce
Banks Maysville
Stephens Toccoa
Hall Gainesville, Flowery Branch
Gwinnett Lawrenceville, Snellville

Cases filed in the Northern District from the Counties above are filed with the Clerk of Court in Atlanta. However, meetings and hearings for cases in which the Debtor resides in Barrow, Jackson, Banks, Stephens, Hall, and several other counties are held in Gainesville.

Morgan & Morgan has over 30 years experience handling bankruptcy cases in both the Middle and Northern Districts of Georgia. We offer a free consultation to fully review your financial situation and advise you of all debt relief options. Let us help you get the relief you deserve.

WHEN IS MY BANKRUPTCY CASE CLOSED BY THE COURT? IS IT POSSIBLE TO REOPEN THE CASE?

In most bankruptcy cases, shortly after the final discharge order is entered by the court, the case is closed. However, this is not always the case. In some Chapter 7 bankruptcy cases, the case may remain open for months, or even years, after the discharge has been granted. This can be true when the Trustee is still trying to sell property or recover funds that are property of the bankruptcy estate and can be used to pay creditors, or when the court is still considering disputes over whether a particular debt is eligible for discharge.

Occasionally, there is a need to petition the court to reopen a bankruptcy case. This can be true when there is a dispute over whether a debt was discharged. Another example is when a creditor is trying to collect a discharged debt, and the debtor needs the court to take steps to enforce the discharge order. It is also sometimes necessary to reopen in order to file an amendment, or file a reaffirmation agreement.

Reopening the case for these purposes does not change the discharge date, and does not normally give creditors a new chance to file objections.
When it is necessary to reopen a case, the debtor’s attorney will file a motion with the court. It is within the court’s discretion to reopen the case, or refuse to do so. If you feel your case should be reopened, be sure to fully discuss the matter with your attorney. He/she should fully advise you of the pros and cons, and the cost of filing the motion and taking whatever other steps are needed.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH BANKRUPTCY AND DEBT RELIEF, SOCIAL SECURITY DISABILITY, WORKERS COMPENSATION, AND OTHER LEGAL MATTERS. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM OR CALL (706)548-7070.

RIPPED OFF BY A DEBT SETTLEMENT COMPANY?

Complaints by consumers about “debt settlement” and “debt management” companies have skyrocketed in recent years. Many of these companies market themselves as a viable alternative to bankruptcy. Often, they propose to set up a debt settlement payment plan. Under the plan, the consumer makes a payment each payday. The company proposes to hold the funds until a settlement fund is accumulated, and then settle out the consumer’s debts for pennies on the dollar.

Sounds great, right? Unfortunately, most of these companies manage to keep most of the funds for themselves. The consumer’s debts continue to fall further into default, and eventually lawsuits and harassment cause the plan to fail. The debt settlement company is the only one who profits.

The State of Georgia legislature recognized that this practice does not help, but only hurts those in need of relief. It passed a law which makes most debt settlement plans illegal. If you feel you have been victimized by one of these companies, call Morgan & Morgan for a consultation. You may be entitled to recover the funds you paid into the plan, as well as damages and attorney fees.

MORGAN & MORGAN IS HERE TO HELP.

MY EX ASSUMED OUR JOINT DEBTS AS PART OF OUR DIVORCE SETTLEMENT. NOW HE’S FILED BANKRUPTCY. WHAT CAN I DO?

Most obligations incurred in connection with a divorce settlement cannot be discharged in a Chapter 7 bankruptcy. However, that is not always true in Chapter 13. If a spouse takes over a joint debt as part of an alimony or support obligation, the agreement to pay the debt cannot be discharged. However, if the debt was assumed as part of a simple division of property or debts, a successful Chapter 13 plan can erase the obligation to the lender, AND the obligation to the ex-spouse that was created by the divorce settlement documents.

If an objection to dischargeability of a debt incurred as part of a divorce settlement agreement is filed in a Chapter 13 case, the bankruptcy court will look at the language of the agreement, and the facts and circumstances surrounding the marriage and separation, to determine whether the agreement to assume the debt was in the nature of alimony and support. If so, the debt to the ex-spouse will not be discharged, and the ex-spouse will be free to enforce the agreement in the divorce court. If, however, the agreement is found to be a division of debts or property, the ex-spouse will be limited to filing a proof of claim in the Chapter 13 case and hoping to recoup some of his/her losses through disbursements by the Chapter 13 Trustee.

If you, or your credit standing, are being affected by an ex-spouse’s bankruptcy filing, it is important to seek advice from an Athens bankruptcy attorney right away. There are strict deadlines for filing objections.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH FINANCIAL PROBLEMS, SOCIAL SECURITY DISABILITY CLAIMS, WORKERS COMPENSATION CLAIMS, AND OTHER LEGAL ISSUES. CALL US AT (706)548-7070 OR VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM.

MY CAR HAS BEEN REPOSSESSED. CAN BANKRUPTCY HELP ME GET IT BACK?

In most cases, filing a Chapter 13 bankruptcy case will allow you to recover possession of a vehicle that has been repossessed. Because the buyer retains a right to redeem the vehicle after repossession, he/she still has an ownership interest in it. Therefore the courts have held that it is part of the bankruptcy estate and must be returned to the buyer.

Once the vehicle is resold by the lender, however, it is almost certainly too late. If your vehicle has been repossessed, you must act quickly. Contact an experienced bankruptcy attorney. Make sure that he/she is prepared to file a case quickly. A good bankruptcy attorney knows that time is of the essence in this situation, and will get a case filed right away.

Of course, recovering possession of the vehicle is only the first step. You must propose a feasible plan to pay the debt. Your attorney should fully evaluate your finances and develop a plan that you can live with. In some cases, you will only have to pay back the value of the vehicle rather than the full debt. In almost all cases, the interest rate will be significantly reduced.

So, if your vehicle has been repossessed, don’t give up. Get advice from a highly qualified bankruptcy attorney right away.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH WORK INJURIES, BANKRUPTCY AND DEBT RELIEF, SOCIAL SECURITY DISABILITY, AND OTHER LEGAL PROBLEMS. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM OR CALL (706)548-7070.

MORTGAGE AND DEBT RELIEF FOR ACTIVE MILITARY PERSONNEL

Members of our armed forces, including Reserves and National Guardsmen, sacrifice in many ways, including financially, while on active duty. Congress has recognized these sacrifices, and enacted special protections against home foreclosures and high interest loans for those on active duty.

HOME FORECLOSURE PROTECTION: The Servicemembers Civil Relief Act (SCRA) prohibits the foreclosure of a servicemember’s property during the period of active duty, and for nine months thereafter, without a court order. This only applies, however, if the mortgage was taken out prior to the commencement of active duty. In states like Georgia, which normally allows quick foreclosure without any court action, this is significant protection.

INTEREST RATE PROTECTION: During the period of active duty, and for one year thereafter, lenders must lower the servicemember’s interest rate on any loan obtained before the active duty period began. The maximum rate, including late charges and other fees, is 6 percent per annum.

HOWEVER, the interest rate reduction must be requested in writing. The rate reduction applies to individual loans as well as joint loans. The rate reduction can be requested during the active service and for 180 days after the termination of the servicemember’s active duty orders. If interest over the allowed maximum was charged, the lender must retroactively credit the account.

With over 30 years experience in consumer law, Morgan & Morgan of Athens, Georgia is always ready to help servicemembers with debt problems or consumer claims. Call for a free consultation. 1-800-924-7438 or (706)548-7070.

WILL PAYING OFF AN OLD DEBT RAISE MY CREDIT SCORE?

Not always. If a debt is less than seven years old, paying it could improve your credit score, IF it is showing on your credit report. How much depends on how old the debt is.

If the debt is older than seven years, by law it should have already come off your credit report. The credit rating agencies should not be considering it in assigning your score, so repaying it would likely have no effect on your score.

If the debt is less than seven years old, but is not showing up on your credit report, paying it off will not help your score, AND COULD EVEN HURT IT. This could happen if the creditor reports the payment, since your credit report would then show a debt that was formerly delinquent.
So, if you are thinking of paying off old debt, it is important to prioritize:

FIRST PRIORITY: Tax debt. Tax debts to federal, state and local governments accrue penalties and interest at an astounding rate. And, the government has multiple ways of collecting the debt that are not available to general creditors, such as seizing your tax refunds or government benefits, levying on your wages, and seizing your property.

SECOND PRIORITY: Child support or alimony obligations, and any other obligations you incurred as part of a divorce settlement. These debts are not dischargeable in bankruptcy, and failure to pay can even land you in jail.

THIRD PRIORITY: Any creditor that has sued you and obtained a judgment. A judgment will normally constitute a lien against your property, and may give the creditor the right to garnish your wages or bank account.

FOURTH PRIORITY: Any debt upon which you have been served court papers, even if a judgment has not been entered. If you have been served, a judgment is likely in the near future.

FIFTH PRIORITY: Debt that has been handed over to a law firm for collection, especially if it is a local law firm. A collection lawsuit is much more likely to be filed by a law firm than a general collection agency.

SIXTH PRIORITY: Other debts that are showing up on your credit report. Pay the newer debts first, as these affect your credit score more than older debts.

SEVENTH PRIORITY: Other debts that are not showing up on your credit report.

If it is not possible for you to deal with your debts in this way, it may be time to look at your bankruptcy options. STEER CLEAR OF THE DEBT MANAGEMENT AND DEBT SETTLEMENT FIRMS THAT YOU SEE ADVERTISING EVERYWHERE. The statistics are clear that these services rarely solve debt problems. More often, they are the only ones who get paid, leaving you further in debt and further behind.

I’M STARTING TO THINK I MAY HAVE TO FILE FOR BANKRUPTCY. WHERE DO I START?

If you are considering bankruptcy, it is important to have a thorough consultation with an experienced bankruptcy attorney. You should leave that consultation with a good understanding of your options. Once you know your options, you can make an informed decision about what should be done. Never let an attorney or anyone else pressure you into filing a bankruptcy, or filing a particular type of bankruptcy. Get the facts first. Make sure you know the pros and cons of each type of consumer bankruptcy case.

WHAT CAN I EXPECT AT MY INITIAL CONSULTATION?
At Morgan & Morgan, you can expect a pleasant, non-judgmental, thorough review of your situation by an attorney with many years of experience. We will take the time to make sure you know your options, and we will try to answer all your questions. We will NEVER pressure you to file a bankruptcy case. Instead, we will make sure you have the information you need to make a decision that is right for you.

DO I HAVE TO HAVE ALL MY FINANCIAL RECORDS?
Absolutely not. We can usually gather the information we need by simply asking the right questions. If necessary, we will help you get a credit report to help insure we have a complete picture. At your first meeting, our primary focus is to get a good overall picture of your situation and make sure you understand your options. You don’t need to spend hours gathering documents before you come in.

WHAT TYPES OF BANKRUPTCY ARE AVAILABLE TO ME?
Individuals and married couples with consumer debt usually have the option to file under either Chapter 7 or Chapter 13. You can learn about the difference and what is involved with each type of case at our website, www.morganlawyers.com. At your initial consultation, we’ll make sure you understand both options. Each has pros and cons, and which may be best for you can sometimes be a difficult decision. Rest assured that we will spend the time necessary to make sure you understand each option.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH BANKRUPTCY, SOCIAL SECURITY DISABILITY, WORKERS COMPENSATION AND OTHER LEGAL PROBLEMS. CALL US AT (706)548-7070 FOR A FREE CONSULTATION.

I COSIGNED A DEBT FOR A FRIEND AND NOW HE WON’T PAY. WHAT CAN I DO?

Our advice for cosigning a loan for a family member or friend is simple: DON’T DO IT! But if you do, understand the consequences if your friend or loved one can’t, or won’t, pay.

Cosigning is common. We see people every day who have cosigned a debt and been left with a liability they simply can’t pay. Many people think their liability is for only one-half of the debt—not so. If you cosign a debt and the borrower doesn’t pay, in most every case you will be responsible for the entire debt. And, the lender does not have to try to collect from the borrower. It can look to you even if it might be possible for it to collect from the borrower. Also, the lender usually does not have to repossess any collateral that secures the loan. If the lender feels it can easily collect from you, it will simply ignore the borrower and demand payment from you.

So what can you expect if you’ve cosigned a debt for a friend or loved one, and that person can’t keep up with the payments? Are you stuck paying for his or her car loan or even home mortgage? What if you also can’t pay? Your credit score is being damaged, and you are facing the prospect of a lawsuit. What are your options?

YOUR FIRST STEP. Talk to the borrower and assess his or her situation. Can payments be promptly caught up and maintained going forward? How much can he pay right now? If the borrower will be able to resume payments soon, you should both contact the lender and ask for a temporary suspension of payments (sometimes called a forebearance agreement).

If the borrower is not able to promptly remedy the situation, you must move to protect yourself. Is there collateral on the debt that the borrower is holding, such as an automobile? If so, insist that he turn over the collateral to you. You may be able to find a buyer for an amount sufficient to satisfy, or at least substantially reduce, the debt. (Keep in mind, however, that all parties, including the lender, must agree before the property can be sold.) If not, you can work with the lender in taking possession of the collateral and selling it to reduce the debt.

REFINANCE OR TAKE OUT A NEW LOAN. In order to protect your credit, you may need to negotiate a new loan in your own name, either with the original lender or a new lender. Of course, if your credit has already been impaired, this may be difficult, or the terms of the new loan may be burdensome. In some cases, though, this is the best plan. If you take out a new loan, you should insist that the original borrower make a payment to you each month to help with the payment. Get the agreement in writing, have it witnessed, and be prepared to enforce it. Don’t let the original borrower walk away with no further liability.

TRY TO SETTLE THE DEBT. If you can put together a lump sum amount, you may be able to settle the debt for far less than what is owed. However, this will normally only work if you have the lump sum in hand, and the lender is satisfied that taking the settlement is the best they can do. Keep in mind also that settling a debt for less than is owed can have income tax consequences. Consult with a tax expert before making an offer.

SUE THE ORIGINAL BORROWER. If the borrower has the ability to pay and simply won’t do so, you may want to consider legal action. You can file an action in small claims court (in some states such as Georgia this is the Magistrate’s Court) to recover any amount you have to pay on the borrower’s debt, plus court costs. If you succeed, you may be able to recover some or all of your loss. Each state’s laws are different, though. Consult with an attorney before taking legal action.

BANKRUPTCY PROTECTION.If your other options have failed and you are facing a lawsuit or garnishment, it is time to look into your bankruptcy options. Consult with an experienced bankruptcy attorney right away. An qualified and experienced bankruptcy firm will usually provide a free initial consultation to discuss your situation and advise you of your options. DON’T WAIT. Once you know you need help, get good advice sooner rather than later. You’ll be glad you did.

HOW LONG MUST I LIVE IN THIS AREA BEFORE I CAN FILE BANKRUPTCY HERE?

Generally, you must file a bankruptcy case in the District where you have lived for the biggest part of the last 180 days. So, in most cases, you must wait until you have lived in the new District for 91 days. However, filing in the wrong district may, on rare occasions, be the only option. This could be true if a foreclosure was imminent, for example.

If the case is filed in the wrong district, the debtor is still entitled to all of the protections of the bankruptcy code. Some Courts will require that the case be removed to the proper district, but others will allow the case to proceed if there are no creditor objections.

If you are considering a bankruptcy, it is best to get advice from a bankruptcy lawyer as early as possible, even if you may have to wait to file. A good attorney will review your situation and discuss all your options. If you will need to wait to file, a good attorney will advise you on dealing with your creditors in the meantime. It may be advantageous to continue paying certain creditors. It may also be important to stop paying certain creditors, even if you don’t want to discharge that particular debt. Always get good advice early.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH WORK INJURIES, BANKRUPTCY AND DEBT RELIEF, SOCIAL SECURITY DISABILITY, AND OTHER LEGAL PROBLEMS. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM OR CALL (706)548-7070.

HOW DO I KNOW IF BANKRUPTCY IS THE RIGHT CHOICE FOR ME?

Making the decision to file a bankruptcy case is not easy. It is important to look at all of your options, and understand both the benefits and negative effects of filing. These are some of the questions that must be considered:

(1) How badly do I need relief? Are creditors hounding me? Have I been sued? Am I facing a garnishment or foreclosure? Is the pressure of dealing with my debts (or not dealing with them) causing problems with my job, my health, my family relationships? Have I tried to work with my creditors to no avail?

(2) Do I qualify for bankruptcy relief? Most individuals qualify for relief under either Chapter 7 or Chapter 13. However, higher income individuals may be restricted to a Chapter 13 repayment plan.

(3) Will filing a bankruptcy case really help? Bankruptcy under either Chapter 7 or Chapter 13 will stop creditor harassment, foreclosure, garnishments and lawsuits. Some debts, however, cannot be completely discharged (wiped out) by a bankruptcy filing. These include recent income taxes, child support, alimony, and most student loans. Even if you are facing nondischargeable debts, bankruptcy may still help, though, by providing temporary relief and by freeing up income that had been used to service debt that can be discharged.

(4) Will I lose my property? In most bankruptcy cases, the debtor is able to retain his property. However, in most cases if the property is being used as collateral on a debt, a plan must be proposed to pay the creditor at least the value of the property in order to protect it.

(5) Can I afford the cost of filing a bankruptcy case? The best and most experienced bankruptcy law firms will provide a free initial consultation. You will meet with an attorney who will thoroughly evaluate your situation and fully discuss your options. He/she will explain the fees and costs involved and discuss what payment arrangements can be made. In Chapter 13 cases, the attorney fees are usually included in the repayment plan, so a case can be started with little money up front.

The most important thing to remember if you are considering bankruptcy is to get good advice from an experienced bankruptcy attorney. Bankruptcy law is a specialized field. Only a fully qualified, experienced attorney will be able to fully advise you and follow through with the best plan of action.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH WORK INJURIES, BANKRUPTCY AND DEBT RELIEF, SOCIAL SECURITY DISABILITY, AND OTHER LEGAL PROBLEMS. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM OR CALL (706)548-7070.

HOW DO I DECIDE IF BANKRUPTCY IS NECESSARY?

Before deciding to file for bankruptcy, you must understand what bankruptcy will and will not do for you. Bankruptcy won’t solve every problem or get rid of every debt. If it is clear that you need bankruptcy relief, the next step is to determine what type of bankruptcy to file.

TYPES OF DEBTS
Whether bankruptcy is the right choice, and if so, what type of bankruptcy to file, depends in large part on the type of debts you have. There are three main types of debts: secured, unsecured, and priority. Unsecured debts include things like medical bills and credit cards. Secured debts include car loans, mortgage loans, and some store accounts. Priority debts include most income tax obligations.

CHAPTER 7 BANKRUPTCY
A Chapter 7 bankruptcy will discharge most unsecured debts. Secured debts, such as a car loan, or home mortgage, normally must be paid in order to protect the collateral. Priority debts, such as most income tax obligations, usually cannot be discharged in a Chapter 7 bankruptcy.

So, if most of your debt is general unsecured debt like credit cards and medical bills, and the payments on your secured debts are up to date, Chapter 7 bankruptcy may be a good choice. If you owe significant tax debt or the payments on your secured debts like your car loan or home mortgage are significantly past due, Chapter 13 may be the best option.

CHAPTER 13 BANKRUPTCY
Under Chapter 13, a repayment plan is set up for a period of 36 to 60 months. To file Chapter 13 you must have regular income sufficient to pay your living expenses and still fund the plan. Your attorney will review your income and expenses, and work to formulate a plan you can afford. A typical Chapter 13 plan pays secured debts and priority debts over the term of the plan. Unsecured debts are often paid little or nothing, but you are protected while the plan is going on, and balance that remains when the plan is completed is normally discharged (wiped out).

GOOD ADVICE IS MOST IMPORTANT!
It is critical that you get good legal advice before making any decision about bankruptcy. Make sure you talk to an attorney with experience in both Chapter 7 and Chapter 13 cases. Most good bankruptcy attorneys will provide you with a free initial consultation. He or she will fully evaluate your finances and explain all of your options.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH BANKRUPTCY AND DEBT RELIEF, SOCIAL SECURITY DISABILITY, WORK-RELATED INJURIES, AND OTHER LEGAL PROBLEMS. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM OR CALL (706)548-7070.

HOW CAN I STOP DEBT COLLECTORS FROM HARASSING ME AND MY FAMILY?
In the United States collection agents are limited in the methods they can use to collect consumer debts by the Fair Debt Collection Practices Act (FDCPA). Consumer debts include credit card debt, auto loans, mortgage payments, medical bills and other family and household expenses not used for a business. If you are dealing with a debt collector or have any questions call your Morgan & Morgan for a free consultation today.
Collection agents MUST:

  • Contact you in writing, or attempt to do so, before taking any further action to collect a debt, including legal actions to secure payment of the debt;

Identify themselves when contacting you about a collection matter;

  • Provide information on the original creditor and amount owed. The original creditor is the company or institution to which the debt was owed before it was transferred to the collection agency.
  • Collection agents are NOT permitted to:
  • Harass you or your family with threats of harm or violence, use of obscene language or by making calls at unreasonable times of day;
  • Deceive you by providing inaccurate or misleading information;
  • Send you false legal documents or threaten to take legal action they are not authorized or willing to take;
  • Charge interest or other fees that are not authorized by law;
  • Demand payment on an account that you have disputed without providing verification that the debt is legitimate;
  • Contact your employer, relatives, friends and neighbors for anything other than your direct contact information. In some instances debt collectors may be permitted to contact employers to verify employment, job title and mailing address.

Most debt collection activities by a collection service must stop if you notify the company in writing to stop contacting you. However, this will not stop you from being sued on the debt. If you are facing multiple debts that you cannot pay, it may be time to consider a bankruptcy case. At Morgan & Morgan, we will carefully analyze your financial situation and advise you of the best course of action. The initial consultation is free, and we never pressure a client to file a case. The ultimate decision of how you want to proceed is yours alone. The important thing is that you have all the facts you need to make the right choice. We’ll do all we can to make sure you fully understand your options.

GET HELP FILING YOUR INCOME TAX RETURNS—FOR FREE!

If your adjusted gross income is $52,000 or less, you probably qualify for free assistance. Adjusted gross income is your gross income after exemptions and deductions.

To take advantage of free tax software, your adjusted gross income will generally need to be $58,000 or less.

Where do I look? First, look for a Volunteer Income Tax Assistance program, known as VITA, or a Tax Counseling for the Elderly program, known as TCE. Both are partly funded by the IRS and located just about everywhere – in universities, elementary schools, recreation centers, churches, employment centers, libraries and even shopping malls. The volunteers who staff VITAs are often retired professionals or students who use the volunteer time to get college credit or build their job resume.

You can find a VITA at www.irs.gov or by calling 1-800-906-9887.

Most TCE sites are run by the AARP Foundation’s Tax Aide Program. If you go to the IRS website to search for a TCE, it will direct you to the AARP website, or go directly to the AARP website, www.aarp.org.

You or an older relative could also call 1-888-227-7669 to get help at a TCE. To qualify for help, you have to be at least 60
Can I get help online? Instead of finding a VITA or TCE, you could do your taxes on your computer. Myfreetaxes.com is a free service funded by Walmart Foundation, Goodwill Industries International, National Disability Institute and United Way Worldwide. The website offers free tax preparation software that can be used for federal taxes and state taxes in all 50 states, including the District of Columbia.

You can also go to irs.gov, then look for the “free file” logo. Click on “start free file now,” and you’ll be directed to a page with 14 commercial tax software companies that will allow you to file with them for free, provided your adjusted gross income is not over $58000.

HOW DOES THE FORECLOSURE PROCESS WORK IN GEORGIA?

FORECLOSURES IN GEORGIA

Georgia has a non-judicial foreclosure process. This allows a mortgage holder to foreclose much more quickly and simply than in many other states. The mortgage holder must run a notice in the official legal organ (newspaper) for the county where the property is located. The notice is run for four (4) consecutive weeks. On the first Tuesday of the following month, the property is sold at a foreclosure sale on the steps of the county courthouse.

In the large majority of cases, the property is purchased at the foreclosure sale by the mortgage holder. Of course, in some cases the property is purchased by another individual or investor. Once the foreclosure deed is prepared and recorded, the buyer will typically contact the persons residing in the property and demand possession. If the residents refuse, the buyer can initiate a dispossessory process in court to have the residents and their personal property removed.

The dispossessory process can also be very quick. In many cases an order is entered within a month after the action is filed. The order allows the new owner to remove the current residents and their belongings, and directs the Sheriff’s office to assist in the removal if necessary.

Most mortgage lenders want to take possession of foreclosed property without conflict or delay. In many cases the lender will offer to pay the residents some amount to cover moving expenses. If your property has already been foreclosed, it may be in your interest to contact the lender and discuss this.

ONCE THE FORECLOSURE PROCESS HAS STARTED, CAN IT BE STOPPED?

I. VOLUNTARY ACTION. Of course the lender can voluntarily stop the foreclosure process if it chooses to do so. In some cases, the lender will suspend the process if it is satisfied that the property owner can promptly cure the default, if a sale of the property is pending, or if it is considering a mortgage modification. HOWEVER, it can be dangerous to assume a lender is stopping the process without getting verification in writing. Some lenders will make false assurances that the process is being stopped, but continue running the newspaper notice and moving toward the foreclosure sale. ONCE THE SALE HAS TAKEN PLACE, IT MAY BE TOO LATE!! Unless you are certain the process has been halted, it is very important to continue looking at all your options.

II. SUPERIOR COURT INJUNCTION. If you believe that the loan is not in default, or that there are other legal grounds that would prevent the foreclosure from proceeding, you can petition the Superior Court to injoin the foreclosure. This can be difficult and expensive, however. We strongly recommend that you have an experienced attorney review the matter and assist with any such petition. In most cases, this type of action will not solve the problem.

III. CHAPTER 13 BANKRUPTCY. Over 10 million American homeowners are “underwater”, meaning they owe more on their mortgage loans than their house is worth. While bankruptcy will not solve every mortgage problem, in many cases foreclosures can be stopped and mortgages reinstated through the use of a Chapter 13 plan. Chapter 13 allows an individual or couple with regular income to deal with their debts by making regular payments to a Chapter 13 Trustee over a period of 3 to 5 years. The plan can cure an arrearage on a home mortgage over a 60 month term, and deal with other short-term debts such as credit cards, car loans, and medical bills. This can free up funds so that future mortgage payments can be made in a timely manner. In addition, in many jurisdictions a Chapter 13 plan can “strip off” a second or third mortgage on property, if the property value is less than the amount owed on the first mortgage. Once the lien is stripped off, the 2nd mortgage can often be paid little or nothing through the plan, and the remaining balance completely discharged at the conclusion of the plan. Another huge advantage of Chapter 13 is that the homeowner’s attorney fees can be included in the plan, so that the case can be filed without a big upfront expense.

IV. CHAPTER 7 BANKRUPTCY. The filing of a Chapter 7 bankruptcy (commonly called “straight bankruptcy”) will stop a pending foreclosure proceeding in most cases. HOWEVER, Chapter 7 will NOT reinstate the mortgage or cure any default. In most Chapter 7 cases, the lender will ask the court to release the property so that the foreclosure can be recommenced. So, Chapter 7 is not a permanent solution. In some cases, though, Chapter 7 may stop the process long enough to allow the owner to cure any arrearages and reinstate the loan. If there is significant equity in the property (i.e. the property can be sold for more than what is owed), Chapter 7 can sometimes be used to allow for an orderly sale of the property. This can allow the homeowner to realize some of the equity rather than lose it through a foreclosure. In most cases, the homeowner can stay in the property while it is being marketed.

Whether Court action makes sense, and if so what type of action should be filed, is a complicated question. If you a considering taking such a step, DON’T DELAY. Meet with a competent and experienced attorney to discuss your options as early as possible. If you wait until the eve of a foreclosure sale, it may be impossible to get a case filed in time to stop the foreclosure.

IF MY HOME IS FORECLOSED, CAN THE LENDER STILL SUE ME ON THE LOAN?

CAN THE BANKRUPTCY TRUSTEE IN MY CASE SEIZE THE FUNDS IN MY BANK ACCOUNT?

When you file a Chapter 7 bankruptcy, any assets that you own, including funds in your bank account, become property of the bankruptcy estate. However, each Chapter 7 debtor is allowed to exempt certain property so as to protect it from being used to pay creditors. In Georgia, the exemption normally used to protect funds in a bank account is found in O.C.G.A Section 44-13-100(a)(6). It allows you to exempt up to $5600 in any assets. There are other exemptions that are used to protect the equity in your home, your household goods, an automobile, etc.

At Morgan & Morgan, when we are considering a case under Chapter 7, we carefully review your assets and work to maximize your exemptions. We work hard to insure that you get the fresh start you deserve.

Morgan & Morgan is located in Athens, Georgia. We have more than 30 years experience handling bankruptcy, Social Security Disability, and workers compensation cases throughout North Georgia. Check our website at www.morganlawyers.com and call (706) 548-7070 for a free intial consultation.

CAN MY RE-ENLISTMENT BONUS BE DISCHARGED IN BANKRUPTCY?

Service members who receive a re-enlistment bonus or incentive pay and then leave the service before their re-enlistment period is completed can be faced with a large repayment obligation. Can this debt be discharged in bankruptcy?

In most cases, the answer is no. However, the debt can be discharged if the bankruptcy discharge is entered more than five years after—

(1)the date of the termination of the agreement or contract on which the debt is based; or

(2)in the absence of such an agreement or contract, the date of the termination of the service on which the debt is based.

If you owe the government for a bonus, incentive pay, or similar benefit, the timing of your bankruptcy case is very important. If possible, it may be advisable to wait until the five year period has expired before filing.

However, even if the debt is nondischargeable in a Chapter 7 bankruptcy, you may still be able to deal with it through Chapter 13. Under Chapter 13, the debt, along with your other debts, is dealt with through a payment plan that is based on your income, your expenses, and the type of debts you owe. A debt to the government can often be paid through Chapter 13 without penalties and interest, and you are protected from collection activities while the plan is going on.

If you are considering bankruptcy to deal with debts owed to a government agency, it is critical to get advice from an experienced bankruptcy attorney.

SOCIAL SECURITY BENEFITS—CAN A CREDITOR GARNISH MY BANK ACCOUNT AND SEIZE MY SOCIAL SECURITY FUNDS?

Many people on a fixed income from Social Security end up with judgments against them due to old debts such as credit cards and medical bills. Normally, when a creditor obtains a judgment, they can then take steps to collect such as garnishment of wages or bank accounts, or seizure (also known as levy) of property. Social Security benefits, however, have special protections under the law.

When a bank or credit union receives a garnishment notice, it must review the history of the account being garnished to determine if a benefit payment was deposited into the account during the previous two months. Within two business days of receiving the garnishment notice, the financial institution must notify you if the funds are protected from garnishment. If the funds are identified as Social Security benefits, the bank cannot freeze the funds. You must be given “full and customary access” to the funds. And, the bank cannot collect a garnishment fee from the protected funds.

Of course, even if the judgment creditor cannot garnish your bank account, it may take other steps to collect, including seizure of property. And, most judgments act as a lien against your home, preventing you from selling or borrowing money against the property without paying off the judgment. If you are served with a lawsuit, it is critical that you get good legal advice immediately! Ignoring the lawsuit is never a good idea.

MORGAN & MORGAN HAS OVER 30 YEARS EXPERIENCE HELPING PEOPLE WITH DEBT PROBLEMS, DISABILITY AND WORK INJURY CLAIMS, AND OTHER LEGAL MATTERS. CALL US FOR A FREE CONSULTATION, OR VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM

CAN I SAVE MY HOME BY FILING BANKRUPTCY?

Everyone knows about the recent issues with the housing market. Many homes have lost value over the past couple of years. As a result, more and more people are facing foreclosure. Over 10 million American homeowners are “underwater” on their home. That means they owe more money on their mortgage loans than their house is worth. While bankruptcy will not solve every mortgage problem, in many cases foreclosures can be stopped and mortgages reinstated through the use of a Chapter 13 plan.

A Chapter 13 bankruptcy case allows an individual or married couple with regular income to deal with their debts by making regular payments to a Chapter 13 Trustee. The payments are made over a period of 3 to 5 years. The plan can cure an arrearage, or overdue balance, on a home mortgage over a 60 month term. A Chapter 13 bankruptcy filing can also deal with many other short-term debts such as credit cards, car loans, and medical bills. This can free up funds so that future mortgage payments can be made in a timely manner.

In addition, in many jurisdictions a Chapter 13 plan can remove or “strip off” a second or third mortgage on a house. In order to remove the second or third mortgages, the property value must be less than the total amount owed for the first mortgage. Once the lien is stripped off, the second mortgage can often be paid little or nothing through the plan. The remaining balance on the second or third mortgage is completely discharged at the conclusion of the plan.

Another huge advantage of Chapter 13 is that the case can be filed without a big upfront expense. With a Chapter 13 bankruptcy case, the homeowner’s attorney fees are included in the plan. The attorney fees are then paid during the course of the 3 to five year plan. In fact, a Chapter 13 bankruptcy case can be started for as little as $125 ($75 partial court costs and $50 credit counseling).

Morgan & Morgan of Athens, Georgia has more than 30 years experience helping homeowners save their homes through Chapter 13. We offer a free initial consultation with an experienced attorney, NOT a paralegal or assistant, to fully evaluate the client’s options. Chapter 13 plans can be started with as little as $75 up front. If you are facing foreclosure, call 1-800-924-7438 or (706)548-7070 today for an appointment. You can also visit our website at www.morganlawyers.com

CAN I DISCHARGE MY OLD TAX DEBT IN BANKRUPTCY?

Section 523 of the U.S. Bankruptcy Code governs the dischargeability of taxes. Generally, taxes on income owed to the IRS or a state are not dischargeable in bankruptcy unless they are owed for a taxable year for which a return was due more than three years before the filing of the bankruptcy case, and certain other requirements are met. For example, the return for the 2009 tax year would normally have been due on April 15, 2010. Taxes for that year would not be dischargeable in a bankruptcy case unless the case was filed after April 15, 2013.

Often, some of the tax obligation is dischargeable, but the more recent taxes are not. In that case, the dischargeable portion can be wiped out in a bankruptcy, thereby substantially reducing the total obligation.

Even if your income taxes are not dischargeable in a Chapter 7 bankruptcy, you may be able to deal with them through a Chapter 13 plan. In many Chapter 13 cases, we are able to set up a plan to repay the taxes, without future interest, while discharging other unsecured debts like credit cards and medical bills.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH WORK INJURIES, BANKRUPTCY AND DEBT RELIEF, SOCIAL SECURITY DISABILITY, AND OTHER LEGAL PROBLEMS. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM OR CALL (706)548-7070.

CAN BANKRUPTCY PROTECT MY WORKERS COMPENSATION SETTLEMENT FUNDS?

A seriously injured worker can accumulate significant debt while out of work. Even if the Employer pays the required workers compensation benefits, the amount is often far less than the worker was earning prior to the injury. It is sometimes necessary to consider a bankruptcy case in order to protect any settlement amount from claims by creditors. Careful consideration of the client’s financial situation and the applicable bankruptcy law is critical in this situation.

If the injured worker has resided in Georgia for more than two years, it is likely that a bankruptcy case can be used to get debt relief and protect a workers compensation settlement. The Georgia bankruptcy exemptions are found in Section 44-13-100 of the Georgia Code. There is an exemption for payment on account of personal injury of up to $10,000. There is also an exemption for payment in compensation for loss of future earnings to the extent reasonably necessary for the support of the debtor and his/her dependents. So, in most cases the combination of these exemptions will fully protect a workers compensation settlement in a bankruptcy case.

If the worker has not resided in Georgia for more than two years, he/she may be required to use another State’s exemption code, which could be less generous in protecting settlement funds.

In either case, it is critical that the client get personal and specific advice from a bankruptcy specialist before filing a case.

Morgan & Morgan has more than 30 years experience in bankruptcy, Social Security Disability, and workers compensation. We offer a free initial consultation in which the client’s situation is fully examined by an experienced attorney. Call (706)548-7070 today.

CAN BANKRUPTCY HELP WITH MY INCOME TAX OBLIGATION?

Section 523 of the U.S. Bankruptcy Code governs the dischargeability of taxes. Generally, taxes on income owed to a “governmental unit” are not dischargeable in bankruptcy unless they are owed for a taxable year for which a return was due more than three years before the filing of the bankruptcy case, and certain other requirements are met.

Often, some of the tax obligation is dischargeable, but the more recent taxes are not. In that case, the dischargeable portion can be wiped out in a bankruptcy, thereby substantially reducing the total obligation.

However, even if your income taxes are not dischargeable in a Chapter 7 bankruptcy, you may be able to deal with them through a Chapter 13 plan. In many Chapter 13 cases, we are able to set up a plan to repay the taxes, while discharging other unsecured debts like credit cards and medical bills.

Morgan & Morgan has over 30 years experience handling cases involving tax obligations. Let us put our experience to work for you. Call us at (706) 548-7070 for a free consultation.

WHAT TO EXPECT: FREE BANKRUPTCY CONSULTATION

You will meet with an attorney at your initial consultation

Some other law firms have you meet with an assistant or paralegal first. With these firms, you may not even meet your attorney until your first court date. We feel it is important to meet face to face, so you can shake hands with the person who will actually represent you and get to know them. Most importantly, a paralegal or assistant cannot properly assess your options and advise you about the pros and cons of the bankruptcy process.

You will receive advice specific to your situation
Most people have a general idea of how bankruptcy works, but do not fully understand how it applies to them. This leads to misunderstandings about who can file for bankruptcy, which debts are eligible for discharge, and what happens with property and belongings. The initial consultation is our chance to clarify bankruptcy laws and how they apply to you and your specific situation. We will discuss your goals and priorities, and outline the different options available to accomplish them.

You will not file bankruptcy at your initial consultation
Under certain circumstances (foreclosure, repossession, garnishments), we can file a bankruptcy case immediately following the consultation. However, we normally encourage our clients to take the time to consider their different options. We understand that filing bankruptcy is a big decision that should not be entered into without advice and consideration. We want our clients to be comfortable with both the case they are filing and the attorney representing them before going forward with filing.

Download the PDF resource: Free Bankruptcy Consultation

WHAT TO EXPECT: YOUR NEXT APPOINTMENT

Please Come Even if you don’t Have all the Information or Money Discussed with your Attorney
By showing up for your appointment, even with incomplete information or filing fees, we can start the
process of preparing your documents for filing. Often, we will be able to file your case and submit additional information to the court later. Missing your appointment delays the help and relief we can get for you. Even worse, this may lead to further harassment and complications from your creditors.

You Will Meet with our Experienced and Highly Trained Staff
Your next appointment will be with a legal assistant on our staff. Your legal assistant is specifically trained to help gather information and prepare documents in connection with bankruptcy cases. Your attorney is in charge of preparing and filing your case, and the legal assistant aids in the process.

We Gather the Information and Documents for your Case
Your legal assistant will ask you questions about your debts, expenses, income, and assets. They will also review your credit report, paystubs, tax returns, bank accounts, and any recent payments or transfers you may have made. If you don’t have these documents available, please still come for your appointment. We can always get them after the meeting.

Your Attorney Reviews and Prepares your Case for Immediate Filing
At the end of your meeting, you are asked to read and verify the information gathered and to sign forms stating that the information is true and accurate to the best of your knowledge. Your case will then be given back to your attorney for final review and preparation of the documents to be filed with the bankruptcy court. Generally, if no unusual problems arise, your bankruptcy case will be filed with the court within about 24 hours of your meeting.

Click here to download the PDF resource: Your Next Appointment

MY HOUSE IS BEING FORECLOSED - WHAT CAN I DO?

Question and Answers about Foreclosures

1) What is a foreclosure? When a homeowner falls behind on their mortgage payments, the lending back will repossess the property. Typically, the bank will begin a foreclosure after 3 or 4 missed payments, but they can start the process after missing just 1 payment.

2) How long does the foreclosure process take? After the bank notifies you, they are required to run an advertisement in the local paper for 4 consecutive weeks. On the first Tuesday of the following month, the house will be auctioned at the steps of the courthouse.

3) Can the bank sue me for the balance on my house? Normally, the banks will forgive the balance of your loan. The amount forgiven by the bank is considered taxable income by the IRS, so this might have an effect on your tax bill at the end of the year.

4) What will happen to my second mortgage? After your property is auctioned off, the proceeds are used to pay the first mortgage. Any additional money is used to pay the second mortgage. If there are no additional funds or the funds do not cover the entire balance, the second mortgage lien holder can sue you for the difference.

Can Bankruptcy Help Stop My Foreclosure?

A Chapter 13 bankruptcy case allows an individual or married couple with regular income to deal with their debts by making regular payments to a Chapter 13 Trustee. The payments are made over a period of 3 to 5 years. The plan can cure an overdue balance,on a home mortgage over a 60 month term. A Chapter 13 bankruptcy filing can also deal with many other short-term debts such as credit cards, car loans, and medical bills. This can free up funds so that future mortgage payments can be made in a timely manner.

In addition, a Chapter 13 plan often can remove a second or third mortgage. Once the lien is removed, the second mortgage can often be paid little or nothing through the plan. The remaining balance on the second or third mortgage is completely discharged at the conclusion of the plan.

Another huge advantage of Chapter 13 is that the case can be filed without a big upfront expense. With a Chapter 13 bankruptcy case, the homeowner’s attorney fees are included in the plan. The attorney fees are then paid during the course of the 3 to 5 year plan. In fact, a Chapter 13 bankruptcy case can be started for as little as $75. Contact Morgan & Morgan today for a free consultation with an experienced attorney to discuss your options. You can call us at (706) 548-7070 or you can visit our website at www.morganlawyers.com

Download the PDF resource:Question and Answers about Foreclosures

WHAT TO EXPECT: FIRST CREDIT COUNSELING COURSE

Every person that files for bankruptcy is required to complete two credit counseling courses. The cost of the credit counseling courses is $50 or $25 for each session. To complete the first credit counseling course:

  • Gather the following information
    • Monthly income
    • Monthly expenses
    • Your debts and the balance on your debts
  • Go to www.acdcas.com
  • Follow the directions on the website to set up your account
    • Write down your user name and password
  • When asked for the firm code type in “morgan” without the quotes
  • After you register, you will be given a four digit user id number
    • Write down your user id number
  • Follow the direction on the website and fill out the requested information
    • If you are unsure about any of the requested numbers, just put an estimate. Exact numbers are NOT necessary!
  • You are required to spend at least one hour on the first course
  • To complete the first course you will have complete an online chat
    • They will ask for your user name, your date of birth, the last four digits of your SSN, and your user id number
  • During the chat, you will verify information and ask any questions that you had during the course
  • Your certificate of completion will be emailed to Morgan & Morgan

The first credit counseling course is designed to help you gather the required information to file bankruptcy. You will also see a snapshot of your financial situation.

Download the PDF resource: First Credit Counseling Course

WHAT TO EXPECT: SECOND CREDIT COUNSELING COURSE

Every person that files for bankruptcy is required to complete two credit counseling courses. The cost of the credit counseling courses is $50 or $25 for each session. To complete the second credit counseling course:

  • If you do not know how to use a computer or prefer to use a phone, call
  • (888) 415-8173 to complete your second course
  • Gather the following information: Your case number
  • Go to www.acdcas.com
  • Log into your account using the user name and password you set up for the first course
  • If asked for the firm code type in “morgan” without the quotes
  • Follow the direction on the website and read the information on the screen
  • You are required to spend at least two hours on the second course
  • Your certificate of completion will be emailed to Morgan & Morgan

The second credit counseling course is designed to give you useful financial information and help you better manage your finances.

Download the PDF resource: 2nd Credit Counseling Course

WHAT CAN I DO TO IMPROVE MY CREDIT SCORE?

All of your debts, payments, credit card accounts and other financial history are used to compute your FICO credit score. All of the credit agencies calculate a score between 300 (extremely poor creditworthiness) and 850 (perfect credit). The average score is about 700. Your credit score is used by creditors to make a decision on applications for car loans, mortgages, credit cards, and other purchases.

If credit is granted, your score is often used to determine the interest rate on the debt.

  • About 35%, of your score is determined by payment history. Missing payments or frequently paying bills late will drastically lower your score. You can significantly improve your score by making timely payments going forward, even if you have a history of late or missed payments.
  • About 30% of the FICO score is based on how much money you owe versus how much credit is available to you. For this reason, it is rarely helpful to cancel credit cards that have a zero balance. A better strategy is to retain the card, but use it carefully and make all payments on time.
  • About 15% of your credit score is based on the length of your credit history. The longer your credit history the better.
  • The type of credit you use determines about 10% of the FICO score. Having many different types of credit, including mortgages, credit cards, car loans, etc. will likely generate a higher score.
  • About 10% of your FICO score includes searches for credit. Applying for many different types of credit over a short period of time can lower your score.

CAN BANKRUPTCY HELP MY CREDIT SCORE?

Filing a bankruptcy case is not a cure all. In some circumstances, however, it may make sense to clear out old debt that you cannot pay so as to focus on rebuilding credit using debt that you can keep current. It is rarely a good idea to file bankruptcy just to help rebuild credit, but there may be other good reasons to file. In some circumstances, it is the only way to get a fresh start. The decision to file a bankruptcy case should be made only after consultation with an experienced bankruptcy attorney.

TIPS FOR REPAIRING YOUR CREDIT REPORT AND CREDIT SCORE

Download Tips To Improve Your Credit Score

BUDGET WORKSHEET

Download the Budget Worksheet

Chapter 7

CHAPTER 7 BASICS
Chapter 7 is sometimes called “straight bankruptcy”. Under Chapter 7, the Court will discharge (wipe out) many of your debts. Credit card debt, medical bills, and unsecured loans are typically discharged. Debts that have collateral, such as a car loan or a home mortgage, must be reaffirmed in order to protect the collateral. A reaffirmation is an agreement that the debt will not be discharged. Some debts, such as taxes, student loans, and divorce or child support obligations cannot be discharged in Chapter 7. Chapter 7 may be a good choice if you have unsecured debt that you cannot pay and have few secured debts. However, many factors must be considered before deciding whether bankruptcy is necessary and, if so, what type of case to file. To learn more about Chapter 7, click HERE.
CAN A CHAPTER 7 BANKRUPTCY SAVE MY HOME FROM FORECLOSURE?

When a bankruptcy case is filed, with few exceptions an “automatic stay” goes into effect. The stay prevents creditors, including mortgage lenders, from taking any action to collect a debt. If a foreclosure is pending, it must be stopped. If you file a Chapter 7 bankruptcy, however, the foreclosure may only be stopped temporarily. The lender will likely file a motion for relief from the stay. Such motions are routinely granted by the Courts. This will allow the lender to start the foreclosure process again.

Usually, the better alternative to deal with a mortgage arrearage is Chapter 13. Chapter 13 allows an individual or couple with regular income to deal with their debts by making regular payments to a Chapter 13 Trustee over a period of 3 to 5 years. The plan can cure an arrearage on a home mortgage over a 60 month term, and deal with other short-term debts such as credit cards, car loans, and medical bills. This can free up funds so that future mortgage payments can be made in a timely manner.

In addition, in many jurisdictions a Chapter 13 plan can “strip off” a second or third mortgage on property, if the property value is less than the amount owed on the first mortgage. Once the lien is stripped off, the 2nd mortgage can often be paid little or nothing through the plan, and the remaining balance completely discharged at the conclusion of the plan. (Lien strips are also available in Chapter 7 cases in many jurisdictions, but stripping off a junior lien still does not solve the problem of an arrearage on the first mortgage.)

Another huge advantage of Chapter 13 is that your attorney fees can be included in the plan, so that the case can be filed without a big upfront expense.

Deciding whether to file a bankruptcy case, and if so what chapter to file under, can be complicated. It is critical to get good advice from a qualified and experienced bankruptcy attorney before making your decision.

Morgan & Morgan of Athens, Georgia has more than 30 years experience helping homeowners save their homes through Chapter 13. We offer a free initial consultation with an experienced attorney, NOT a paralegal or assistant, to fully evaluate the client’s options. Chapter 13 plans can be started with as little as $125 ($75 partial court costs and $50 credit counseling) up front. If you are facing foreclosure, call (706)548-7070 today for an appointment.

Chapter 13

MY CHAPTER 13 CASE WAS DISMISSED. CAN I FILE A NEW CASE AND PROTECT MY PROPERTY?

It is usually possible to refile under Chapter 13 after a case has been dismissed. However, you must be able to show that you have sufficient regular income to make the new plan feasible. If a car or other collateral has been repossessed, it can usually be recovered, provided that it hasn’t been sold to a third party and the new plan provides for payment of the debt.

If you have had a prior case pending within the last year, your attorney must file a motion to extend the automatic stay which goes into effect when your case is filed. Otherwise the stay would expire 30 days after the case is filed, putting your property in jeopardy. Motions to extend the stay are usually granted without dispute.

If you have had 2 prior cases pending within the last year, the stay does not go into effect automatically. Your attorney must file a motion to impose the stay. Otherwise, your creditors could try to repossess and dispose of their collateral. Motions to impose the stay are also usually granted, but you will likely have to show the court that your circumstances have changed and that the new plan is workable.

If you are considering filing a new case after dismissal of a previous case, it is very important to consult with an experienced attorney right away. Your attorney may be able to formulate a more favorable repayment plan so that the new case will be more likely to succeed.

Morgan & Morgan Attorneys at Law, P.C. is located in Athens, Georgia. We have over 30 years experience assisting people throughout north Georgia with debt relief matters. Visit our website at www.morganlawyers.com.

THE TRUSTEE HAS FILED A MOTION TO DISMISS MY CHAPTER 13 CASE. WHAT ARE MY OPTIONS?

If you are in a Chapter 13 plan and are unable to keep the payments current, the Trustee, or one of your creditors, may file a motion to dismiss the case. If this happens, you must move quickly to correct the situation.

In some districts, you must file a written response to the motion, or it will simply be granted without a hearing. In other districts, the motion is always set down for a hearing. If a response is required, make sure that your attorney files one promptly. If not, you may want to consider filing a response yourself.

It is often possible to save a plan that has fallen into arrears. You may be able to propose a cure of the delinquency by making additional payments, or through a lump sum payment from future income such as a tax refund. You may be able to negotiate a “Strict Compliance Order” that lets the plan continue as long as all future payments are made timely. Or, you may be able to modify the plan to provide for a lower payment. All of these possibilities should be discussed with your attorney, or in the alternative, with the Trustee’s attorney.

If it is not possible to save the plan, you may want to consider converting your case to a Chapter 7 bankruptcy rather than letting it be dismissed. This can sometimes be less expensive than having the case dismissed and then filing a new Chapter 7 case.

If the case is dismissed, you may be able to file a new Chapter 13 case, if you can show that the new plan is feasible. Of course, all payments under the new plan will have to be paid in a timely fashion, or you will soon be facing another dismissal. Repeated dismissals can result in an order that prevents you from filing for a period of time.

It is critical that you get qualified, experienced help when you consider filing, and when you are already in, a bankruptcy case. If your attorney is unresponsive, it may be time to seek new counsel, particularly if your case is dismissed and you need to refile.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH BANKRUPTCY AND DEBT RELIEF, SOCIAL SECURITY DISABILITY, WORK-RELATED INJURIES, AND OTHER LEGAL PROBLEMS. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM OR CALL (706)548-7070.

I’M CONSIDERING FILING A CHAPTER 13 BANKRUPTCY. DO I HAVE TO INCLUDE ALL MY DEBTS?

When you file any type of bankruptcy case, you must list all of your debts and all of your assets. In Chapter 13, however, you can often propose a plan that treats debts differently depending on the type of debt.

For example, the plan may classify a cosigned debt to be paid with interest, while paying little or nothing to other unsecured creditors. Long-term debts, such as a home mortgage, can also be treated differently than other secured debts. The plan may provide that any arrearage (back payments) be caught up through the plan, but the future payments be made by you, rather than through the plan.

What cannot be done in a Chapter 13 plan is to treat similar types of debts differently. For example, you would not be allowed to pay one particular credit card debt in full, while paying little or nothing to other credit card debts.

Many people are concerned about how a bankruptcy will affect a cosignor on a car loan or other debt. Leaving the debt out is not an option. However, In Chapter 13, there is a “codebtor stay” which prevents a creditor from trying to collect from a codebtor while the debt is being paid through the plan. This gives you an opportunity to pay the debt under the protection of the Court without having to worry that the codebtor will be sued, garnished or harassed about the debt.

An experienced bankruptcy attorney will go over all of your debts, and discuss with you how they would be treated in the plan. If you are considering bankruptcy, it is critical that you get advice from a qualified and experienced attorney. Bankruptcy is a complicated and specialized area of the law. Don’t settle for vague or uncertain answers to your questions.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH BANKRUPTCY AND DEBT RELIEF, SOCIAL SECURITY DISABILITY, WORK-RELATED INJURIES, AND OTHER LEGAL PROBLEMS. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM OR CALL (706)548-7070.

CHAPTER 13 BASICS

Under Chapter 13, a plan is set up to repay some portion of your debts under the protection of the Court. Typically, payments are made over a period of three to five years. While you are under the plan, you are protected from your creditors. You cannot be sued, garnished, or harassed about the debts in your plan. Chapter 13 can be a good choice if you are facing a foreclosure or repossession of your car, or if your wages are being garnished. Chapter 13 can stop these actions and allow you to deal with your debts at a payment level you can afford. Starting a Chapter 13 case is especially easy, since your attorney fees can be included in the repayment plan, and even the court costs can be paid in installments if necessary. To learn more about Chapter 13, click here.

Disability

CAN I FILE FOR SOCIAL SECURITY DISABILITY WHILE I’M STILL WORKING?

The Social Security Administration uses a “sequential evaluation” process in evaluating a disability claim. The first step in the process is to determine if the claimant is engaged in “substantial gainful activity”. If so, the claim is denied and the medical issues are not even reviewed. So, unless an individual is not working, or is working very little, it is rarely helpful to move forward with a claim for benefits. In most cases, it is better to continue to work as long as you can, and file your claim when you can no longer continue. If it is inevitable that a claim will be necessary, focus on developing the medical evidence that will be necessary to prove the claim once it is filed. See your doctors, ask for their opinion as to your work capabilities, tell them that you will be filing a claim soon, and ask for their help in documenting your medical problems as thoroughly as possible. This may help you get an early favorable decision on your claim and avoid a lengthy appeal process.

Once you have reached the point of filing a claim, help from an experienced attorney can be invaluable. At Morgan & Morgan, we work with your doctors to insure the agency gets a complete picture of your impairments. We handle any necessary appeals. If a hearing is necessary, we present your case to the judge through documents and witness testimony. We handle Social Security Disability cases on a contingent fee, so no attorney fees are due until you win.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH DISABILITY CLAIMS, WORKERS COMPENSATION, AND BANKRUPTCY. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM OR CALL (706)548-7070 FOR A FREE CONSULTATION.

Worker’s Compensation

MY WORKERS COMPENSATION DOCTOR SAYS I CAN RETURN TO WORK, BUT I CAN’T DO THE JOB. WHAT CAN I DO?

One of the most important rights of an injured worker in Georgia is the right to an independent medical examination. Ongoing medical treatment must be done through an “authorized treating physician”, what is commonly called a company doctor. However, the injured worker can demand a one-time independent medical examination by any doctor of his/her choosing. The employer/insurer must pay for the examination and any tests the examining physician orders, within certain limits.

This right is especially helpful when the company doctor has released a worker to return to work before he/she is fully recovered, or when the company doctor refuses to give a fair permanent disability rating.

A qualified and experienced workers compensation attorney will know when to use an independent medical examination to protect your benefits and maximize your settlement. Morgan & Morgan has over 30 years experience helping injured workers get the benefits they deserve. Call us today.

MY WORKERS COMP DOCTOR HAS RELEASED ME TO LIGHT DUTY WORK. CAN MY EMPLOYER CUT OFF MY WEEKLY BENEFITS?

Under Georgia law, when an injured worker has been released to light duty work by his/her treating physician, the employer can choose to offer light duty employment. If the injured worker refuses to make a good faith attempt to perform the job, the employer or insurer can suspend weekly workers compensation benefits.

However, in order for the employer/insurer to suspend benefits without a hearing, it must provide the treating physician with an accurate job description, and it must send the employee a copy of the job description at the time it is sent to the physician. If the job description is approved by the physician, the job is tendered to the employee, and the employee refuses the job or fails to make a good faith attempt to perform it, the employer can suspend the employee’s weekly benefits. In order to get the benefits reinstated, the employee would have to request a hearing and present evidence that the proposed job is not suitable employment.

If you have been injured on the job, it is very important to get advice from an experienced workers compensation attorney to insure you get the benefits you deserve.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH INJURY CLAIMS, SOCIAL SECURITY DISABILITY, BANKRUPTCY, AND OTHER LEGAL MATTERS. CALL US AT (706)548-7070 OR VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM.

MY DOCTOR RELEASED ME TO LIGHT DUTY, BUT MY EMPLOYER IS INSISTING I DO MORE STRENUOUS WORK. WHAT SHOULD I DO?

If your treating physician has approved a light duty job and given you specific limitations, it is important that you stick to the limitations. If an employer insists that you do work that is more strenuous than your doctor authorized, it is usually best if you simply remind the employer of the restrictions and refuse to do the more strenuous work. Of course, this can cause conflict with the employer, but to do otherwise risks further injury.

Remember, every situation is different. It is important to consult with a qualified workers compensation attorney about the specifics of your case before taking any action.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH INJURY CLAIMS, SOCIAL SECURITY DISABILITY, BANKRUPTCY, AND OTHER LEGAL MATTERS. CALL US AT (706)548-7070 OR VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM.

I WAS TERMINATED FROM MY JOB AFTER A WORK INJURY. NOW MY CONDITION HAS WORSENED. WHAT ARE MY OPTIONS?

Under Georgia Workers Compensation law, if an injured worker returns to work and is then terminated for reasons unrelated to the work injury, the employer usually will not have to reinstate the weekly benefit. Medical benefits would continue, however.

If the worker’s condition later changes, and he or she is no longer able to work, weekly benefits may be reinstated. It can often be a struggle to get the insurer to agree that the benefits should be recommenced, however, and it may require a hearing.

If your condition has changed, it is important to get advice from an experienced workers compensation attorney right away. Your attorney will review the medical records and consult with your doctor to determine if a request for reinstatement of benefits is called for.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH WORK INJURIES, BANKRUPTCY AND DEBT RELIEF, SOCIAL SECURITY DISABILITY, AND OTHER LEGAL PROBLEMS. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM OR CALL (706)548-7070.

I WAS INJURED AT WORK. CAN I SUE MY EMPLOYER?

In Georgia, workers compensation is an “exclusive remedy”. That means that in most cases, even if the employer or a coworker was negligent and caused your injury, the only claim available to the injured worker is a workers compensation claim. Under workers compensation, the injured worker is entitled to medical care, weekly benefits while out of work due to the injury, partial benefits if returned to work at light duty with less pay, and permanent disability benefits if the injury results in any permanent disability. The injured worker cannot recover for pain and suffering.

To establish a workers compensation claim, it is critical that the injury is reported to a supervisor promptly. Always insist on a written injury report. The employer should maintain a posted panel of medical providers for you to choose from. In most cases, you must use a medical provider from the panel.

In every serious work injury case, it is important to get good advice from an experienced workers compensation attorney early in the process. With good advice, disputes with the employer and insurer can often be avoided.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCED HELPING INJURED WORKERS, AS WELL AS HANDLING SOCIAL SECURITY DISABILITY CLAIMS AND PERSONAL BANKRUPTCY. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM, OR CALL (706)548-7070.

I WAS FIRED AFTER BEING HURT ON THE JOB. CAN I STILL FILE FOR WORKERS COMPENSATION?

If your injury occurred in the course of your employment, your employer and its workers comp insurer should pay for all medical expenses incurred through an authorized treating physician, and should pay a weekly benefit until you are able to return to full duty work. If you have any permanent impairment as a result of your injury, you are entitled to compensation even if you return to regular duty employment.

YOUR EMPLOYER IS RESPONSIBLE FOR YOUR INJURY EVEN IF IT WAS YOUR FAULT, AND EVEN IF YOUR EMPLOYMENT HAS BEEN TERMINATED.

If you have suffered a serious work-related injury, qualified legal assistance is absolutely necessary. Consult with an experienced workers compensation attorney early in the process. It will likely save you considerable headaches later.

MORGAN & MORGAN ATTORNEYS AT LAW, P.C. IS LOCATED IN ATHENS, GEORGIA. WE HAVE MORE THAN 30 YEARS EXPERIENCE HELPING PEOPLE WITH WORK INJURIES, BANKRUPTCY AND DEBT RELIEF, SOCIAL SECURITY DISABILITY, AND OTHER LEGAL PROBLEMS. VISIT OUR WEBSITE AT WWW.MORGANLAWYERS.COM OR CALL (706)548-7070.

CAN I RECEIVE WORKERS COMPENSATION BENEFITS IF I WAS INJURED BEFORE OR AFTER CLOCKING OUT?

In many cases, the answer is yes. It has long been held in Georgia that an injury which occurs during ingress to, or egress from, an employee’s immediate place of work is “in the course of employment” and is compensable. West Point Pepperell. Inc. v. McEntire. 150 Ga Appeals 728 (1979); Mobley v. Durham Iron Company, 83 Ga Appeals 690 (1951).

In Hill v. Omni Hotel at CNN Center. 268 Ga Appeals 144 (2004), the Court of Appeals stated that the general rule in Georgia is “accidents that occur while Employees are traveling to and from work do not arise out of and in the course of employment and thus are not compensable under the Workers’ Compensation Act. But under the “ingress and egress” rule, where an Employee is injured while still on the Employer’s premises in the act of going to or coming from his or her work place, the Act does apply.”

For example, a recent client of Morgan & Morgan injured himself after clocking out at a local factory. He tripped on the stairs while leaving the building, causing a significant injury. When the employer refused to treat the injury as compensable, Morgan & Morgan filed for a hearing. The Judge ruled that the injury was compensable and ordered the employer to pay weekly benefits and medical expenses.

REMEMBER, it is extremely important to promptly report any work-related injury, no matter how slight, to your supervisor. Make sure a written report is made. Morgan & Morgan is here to help with advise and representation.

Bankruptcy

What to expect: Free Bankruptcy Consultation

You will meet with an attorney at your initial consultation.

Some other law firms have you meet with an assistant or paralegal first. With these firms, you may not even meet your attorney until your first court date. We feel it is important to meet face to face, so you can shake hands with the person who will actually represent you and get to know them. Most importantly, a paralegal or assistant cannot properly assess your options and advise you about the pros and cons of the bankruptcy process.

You will receive advice specific to your situation
Most people have a general idea of how bankruptcy works, but do not fully understand how it applies to them. This leads to misunderstandings about who can file for bankruptcy, which debts are eligible for discharge, and what happens with property and belongings. The initial consultation is our chance to clarify bankruptcy laws and how they apply to you and your specific situation. We will discuss your goals and priorities, and outline the different options available to accomplish them.

You will not file bankruptcy at your initial consultation
Under certain circumstances (foreclosure, repossession, garnishments), we can file a bankruptcy case immediately following the consultation. However, we normally encourage our clients to take the time to consider their different options. We understand that filing bankruptcy is a big decision that should not be entered into without advice and consideration. We want our clients to be comfortable with both the case they are filing and the attorney representing them before going forward with filing.

What to Expect: Your Next Appointment

Please Come Even if you don’t Have all the Information or Money Discussed with your Attorney
By showing up for your appointment, even with incomplete information or filing fees, we can start the
process of preparing your documents for filing. Often, we will be able to file your case and submit additional information to the court later. Missing your appointment delays the help and relief we can get for you. Even worse, this may lead to further harassment and complications from your creditors.

You Will Meet with our Experienced and Highly Trained Staff
Your next appointment will be with a legal assistant on our staff. Your legal assistant is specifically trained to help gather information and prepare documents in connection with bankruptcy cases. Your attorney is in charge of preparing and filing your case, and the legal assistant aids in the process.

We Gather the Information and Documents for your Case
Your legal assistant will ask you questions about your debts, expenses, income, and assets. They will also review your credit report, paystubs, tax returns, bank accounts, and any recent payments or transfers you may have made. If you don’t have these documents available, please still come for your appointment. We can always get them after the meeting.

Your Attorney Reviews and Prepares your Case for Immediate Filing
At the end of your meeting, you are asked to read and verify the information gathered and to sign forms stating that the information is true and accurate to the best of your knowledge. Your case will then be given back to your attorney for final review and preparation of the documents to be filed with the bankruptcy court. Generally, if no unusual problems arise, your bankruptcy case will be filed with the court within about 24 hours of your meeting.

My House is being Foreclosed – What Can I Do?

Question and Answers about Foreclosures

1) What is a foreclosure? When a homeowner falls behind on their mortgage payments, the lending back will repossess the property. Typically, the bank will begin a foreclosure after 3 or 4 missed payments, but they can start the process after missing just 1 payment.

2) How long does the foreclosure process take? After the bank notifies you, they are required to run an advertisement in the local paper for 4 consecutive weeks. On the first Tuesday of the following month, the house will be auctioned at the steps of the courthouse.

3) Can the bank sue me for the balance on my house? Normally, the banks will forgive the balance of your loan. The amount forgiven by the bank is considered taxable income by the IRS, so this might have an effect on your tax bill at the end of the year.

4) What will happen to my second mortgage? After your property is auctioned off, the proceeds are used to pay the first mortgage. Any additional money is used to pay the second mortgage. If there are no additional funds or the funds do not cover the entire balance, the second mortgage lien holder can sue you for the difference.

Can Bankruptcy Help Stop My Foreclosure?

A Chapter 13 bankruptcy case allows an individual or married couple with regular income to deal with their debts by making regular payments to a Chapter 13 Trustee. The payments are made over a period of 3 to 5 years. The plan can cure an overdue balance,on a home mortgage over a 60 month term. A Chapter 13 bankruptcy filing can also deal with many other short-term debts such as credit cards, car loans, and medical bills. This can free up funds so that future mortgage payments can be made in a timely manner.

In addition, a Chapter 13 plan often can remove a second or third mortgage. Once the lien is removed, the second mortgage can often be paid little or nothing through the plan. The remaining balance on the second or third mortgage is completely discharged at the conclusion of the plan.

Another huge advantage of Chapter 13 is that the case can be filed without a big upfront expense. With a Chapter 13 bankruptcy case, the homeowner’s attorney fees are included in the plan. The attorney fees are then paid during the course of the 3 to 5 year plan. In fact, a Chapter 13 bankruptcy case can be started for as little as $75. Contact Morgan & Morgan today for a free consultation with an experienced attorney to discuss your options. You can call us at (706) 548-7070 or you can visit our website at www.morganlawyers.com

What to Expect: First Credit Counseling Course

Every person that files for bankruptcy is required to complete two credit counseling courses. The cost of the credit counseling courses is $50 or $25 for each session. To complete the first credit counseling course:

  • Gather the following information
    • Monthly income
    • Monthly expenses
    • Your debts and the balance on your debts
  • Go to www.acdcas.com
  • Follow the directions on the website to set up your account
    • Write down your user name and password
  • When asked for the firm code type in “morgan” without the quotes
  • After you register, you will be given a four digit user id number
    • Write down your user id number
  • Follow the direction on the website and fill out the requested information
    • If you are unsure about any of the requested numbers, just put an estimate. Exact numbers are NOT necessary!
  • You are required to spend at least one hour on the first course
  • To complete the first course you will have complete an online chat
    • They will ask for your user name, your date of birth, the last four digits of your SSN, and your user id number
  • During the chat, you will verify information and ask any questions that you had during the course
  • Your certificate of completion will be emailed to Morgan & Morgan

The first credit counseling course is designed to help you gather the required information to file bankruptcy. You will also see a snapshot of your financial situation.

What to Expect: Second Credit Counseling Course

Every person that files for bankruptcy is required to complete two credit counseling courses. The cost of the credit counseling courses is $50 or $25 for each session. To complete the second credit counseling course:

  • If you do not know how to use a computer or prefer to use a phone, call
  • (888) 415-8173 to complete your second course
  • Gather the following information: Your case number
  • Go to www.acdcas.com
  • Log into your account using the user name and password you set up for the first course
  • If asked for the firm code type in “morgan” without the quotes
  • Follow the direction on the website and read the information on the screen
  • You are required to spend at least two hours on the second course
  • Your certificate of completion will be emailed to Morgan & Morgan

The second credit counseling course is designed to give you useful financial information and help you better manage your finances.

Can I Do to Improve my Credit Score?

All of your debts, payments, credit card accounts and other financial history are used to compute your FICO credit score. All of the credit agencies calculate a score between 300 (extremely poor creditworthiness) and 850 (perfect credit). The average score is about 700. Your credit score is used by creditors to make a decision on applications for car loans, mortgages, credit cards, and other purchases.

If credit is granted, your score is often used to determine the interest rate on the debt.

  • About 35%, of your score is determined by payment history. Missing payments or frequently paying bills late will drastically lower your score. You can significantly improve your score by making timely payments going forward, even if you have a history of late or missed payments.
  • About 30% of the FICO score is based on how much money you owe versus how much credit is available to you. For this reason, it is rarely helpful to cancel credit cards that have a zero balance. A better strategy is to retain the card, but use it carefully and make all payments on time.
  • About 15% of your credit score is based on the length of your credit history. The longer your credit history the better.
  • The type of credit you use determines about 10% of the FICO score. Having many different types of credit, including mortgages, credit cards, car loans, etc. will likely generate a higher score.
  • About 10% of your FICO score includes searches for credit. Applying for many different types of credit over a short period of time can lower your score.
Can Bankruptcy Help My Credit Score?

Filing a bankruptcy case is not a cure all. In some circumstances, however, it may make sense to clear out old debt that you cannot pay so as to focus on rebuilding credit using debt that you can keep current. It is rarely a good idea to file bankruptcy just to help rebuild credit, but there may be other good reasons to file. In some circumstances, it is the only way to get a fresh start. The decision to file a bankruptcy case should be made only after consultation with an experienced bankruptcy attorney.

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