Keys to Debt Recovery - Education & Resourcefulness

Earning your way out of debt is much like the process of dieting. To lose weight you can choose liposuction over dieting and exercise, but in doing so, the solution is just temporary. If you do not change some of the fundamental lifestyle habits you practice, the weight comes back. Managing your way out of debt is comparable in many ways.

You can file for bankruptcy (akin to financial liposuction) but if you don't adjust your spending and saving practices, your debt (the heavy fat burden that weighs you down) will reappear.

Just as with a liposuction (or any other procedure), there is a bit of pain and discomfort with bankruptcy as well. It is better to avoid it altogether if possible, but at some point in evaluating your financial position, leveraging your change of financial habits with some effective financial tools (such as bankruptcy) may be a wise move.

The goal is not to shirk your responsibilities. As previously mentioned, wiping your debt without changing your behavior solves nothing. Many people are able to manage their way out of debt by containing their situation before it compounds. However, often times creditors include terms (or change terms) in your binding contracts that result in increasingly difficult bills to pay. If the situation gets bad enough, you can find yourself with no way out.

Now ask yourself this question. Even if you can manage to change your cash flow to effect a positive result, how long will it take you to eliminate the burden of debt? If your answer is "years", then consider how much time you are losing towards your retirement in order just to break even by climbing out of debt to "zero". By that time, you will likely have lost most of the benefit of compounding interest towards your nest egg. Is it worth it to lose your future security due to current debt? No.

In fact, bankruptcy laws exist, in part, to help people preserve their future security. Our legal system supports your right to prosperity in the face of those who would attempt to contractually indenture you to create an ongoing financial stream for themselves at your expense. Whether you got in over your head due to poor judgment, inexperience, an unforeseen change in circumstance, or by being a victim of predatory lending, filing for bankruptcy (Chapter 7 or Chapter 13) is a legal tool to level the playing field and cut your losses, so you can live, learn, and move on towards a better future.

True, some people abuse the system, and that has given the notion of filing for bankruptcy a negative stigma. Assuming, however, that you uphold higher values and are truly seeking to amend your situation (rather than use the system as a crutch), you really should not overlook the legitimate, legal resources available to you to do so.

Just the same, you should not undertake the process blindly. Take the time to get financial counseling on your debt. Find ways to curtail or reform your spending habits. Consolidate accounts and simplify where you can. Remember, wiping (or reducing) your debt through bankruptcy is not a solution in itself; it is part of a potential solution. The other part is a change in habits and practices. Many a lottery winner lost their fortune as quickly as they received it by mishandling money management through uncontrolled spending. When the money ran out, their spending habits did not change, and hence they ended up worse off than if they had not won the lottery in the first place. Famous athletes and celebrities find themselves in the same boat if they habitually spend what they make as they make it. Financial counseling combined with exercising your legal resources is imperative to prevent the same kind of trend in your household. Otherwise, history will repeat itself and you will be that much worse for the wear. At the end of the day, it's not the amount of money you make that determines your standard of living. It's the amount of money you keep, that can be applied towards securing your future happiness. Are you giving most of your money away in interest payments and fees to creditors?

Examine your finances. If you carry a significant, debilitating debt, it may be time to take action. The debt may come from a variety of reasons: divorce, stock market crash, college tuition, disability, a variable rate mortgage, credit cards, unemployment, the list is endless. Even if your cash flow seems to be improving, if every pay check is spent before you get it and the creditors keep calling back for more, what peace of mind do you have? What quality of life? And thinking forward, what provisions for your future are you making? A combination of debt reduction, financial consolidation, and education through a qualified counselor may be the smartest action to take right now. You have a life to live. Chasing your tail is not the way to live it.

The Galler Law Firm is a prominent Atlanta, GA, practice specializing in bankruptcy law for twenty years. David Galler is also accomplished and experienced in civil trial and workers' compensation, and has been at the forefront of the alternative dispute resolution movement. Visit the Galler Law Firm at http://www.gallerlaw.com. For more information on bankruptcy law practices, visit http://www.georgiabankruptcyattorney.net

For more information on successful online business practices, please visit http://www.website411book.com a book authored by Tom Elliott, Website service provider to Galler Law Firm.

Article Source: http://EzineArticles.com/?expert=David_Galler

File Chapter 13 Bankruptcy in GA

Who can file a chapter 13 bankruptcy petition in Georgia?

Individuals may file chapter 13 bankruptcy petitions if they:

(1) reside, have a domicile in Georgia for 189 prior to filing case or, a place of business, or property in Georgia;

(2) have a source of regular income; and

(3) on the date the petition is filed owe less than $250,000 in non-contingent, liquidated, unsecured debts and less than $750,000 in non-contingent, liquidated, secured debts.

Corporations and partnerships may not file a chapter 13 bankruptcy petition.

If you filed a prior bankruptcy petition and the prior proceeding was dismissed within the last 180 days, you may not be able to file a second petition and should check 11 U.S.C. sec. 109(g).

Where do you start? The best thing to do is to set up a free consultation with Galler Law Firm to get your questions answered. Call today or schedule online 770-671-8830.

File Chapter 7 Bankruptcy Georgia

Who can file a Chapter 7 bankruptcy petition in Georgia?

Almost any individual, or corporation may file a chapter 7 bankruptcy petition if he or she resides, has a domicile in Georgia for 180 days prior to filing or a place of business, or property in Georgia. If you filed a prior bankruptcy petition and the prior proceeding was dismissed within the last 180 days, you may not be able to file a second petition and should check 11 U.S.C. sec. 109(g).

You can file a Chapter 7 bankruptcy petition regardless of whether or not you are employed.

If you were granted or denied a chapter 7 discharge in a prior case within the last 6 years or completed a chapter 13 plan in a prior case, you might not be entitled to receive a discharge in bankruptcy and probably are not a candidate for a chapter 7 bankruptcy proceeding. This rule does have some exceptions.

If you have any questions on whether filing is right for you sign up for a free consultation with Galler Law Firm.

Avoid Foreclosure in Atlanta

The recent agreement by federal regulators and mortgage lenders to freeze interest rates for five years on certain subprime, adjustable rate mortgage loans are intended to help many homeowners avoid foreclosure.

However, for homeowners who have missed mortgage payments and may not qualify for the program, working with a credit counseling agency will allow them to explore alternatives to foreclosure, more commonly known as "workout solutions."

"The agreement announced in early December is an effort to help people with adjustable rate loans stay in their homes," said Suzanne Boas, president of Consumer Credit Counseling Service of Greater Atlanta, Inc. "However, most of the people who are turning to us for help are currently delinquent on their loans, having missed payments for a variety of reasons, ranging from reduced income to large medical expenses. We are working every day to find ways to help these families stay in their homes, too."

Under the agreement announced Dec. 6, borrowers with interest rates scheduled to adjust between January 2008 and July 2010, who are no more than 60 days late and would be unable to afford their new mortgage payments can have their rates frozen for five years.

At CCCS of Greater Atlanta, Inc., certified housing counselors work with homeowners to analyze their current financial situation, communicate with their mortgage lender and outline a variety of options that may allow them to keep their home. If the homeowner has the desire to stay in their home, there are four common plans that CCCS counselors typically explore with their lenders.

Repayment Plan -- This is the most common workout plan for any household that is 1-3 months delinquent on their mortgage payment.

Under this scenario, a homeowner sends in their normal payment plus an additional amount each month that is agreed upon by the mortgage lender. Repayment terms typically span from 3-24 months and the terms of the loan are not changed.

Loan Modification -- A loan modification is a written agreement between the servicer and homeowner that changes one or more of the original loan terms, such as the interest rate, term of the loan or type of mortgage.

Under a loan modification, the monthly payment often is not reduced, though the interest rate usually will not "reset" to a higher rate or will be rolled back to the initial rate. This can be a solution for a family with an adjustable rate loan where the rate has recently increased, or is about to increase.

Forbearance -- A forbearance is similar to a repayment plan, but this agreement usually applies to people who have experienced a major financial setback, such as one-time medical expenses or a temporary loss of income. The borrower must be able to prove that they have a new job or a new source of income to resume making their regular monthly payments in the future

A forbearance allows the homeowner to send in no payment or a reduced payment for a collected during the plan by either doing a reinstatement, a repayment plan, or a loan modification.

Partial Claim (FHA) -- In effect, this is a second loan for anyone with a loan guaranteed by the Federal Housing Administration (FHA). The mortgage loan is brought up to date by securing up to 12 months of past due principle, interest, taxes and insurance in a separate, interest free note that is payable when the original mortgage is paid off.

To qualify, a homeowner must be at least 4 months delinquent on their mortgage loan, but no more than 12 months. The new loan enables them to pay off the amount they are "in arrears" and immediately brings their mortgage loan up to date. There are no extra payments or extra interest. A lien is placed on the home and the amount needed to make the loan current is deducted when the home is sold.

Need help to get started? Contact Galler Law Firm today.

Atlanta Consumer Credit Counseling

Spending on Gas, Food Jumps 9% in Past Year

ATLANTA, Feb. 14 /PRNewswire-USNewswire/ -- People seeking basic budget counseling from Consumer Credit Counseling Service (CCCS) of Greater Atlanta spent an average of $531 on gas and food in January 2008, 9 percent more than the average of $486 in January 2007.

The nonprofit credit counseling agency, which serves people in all 50 states, provided basic budget counseling to approximately 5,000 individuals in January. The average budget counseling client is 38 years old, had a gross annual income of just under $40,000 and total debt of $25,733. More than half are homeowners.

"There is no doubt that consumers are facing increasingly tough economic times," said Suzanne Boas, president of Consumer Credit Counseling Service (CCCS) of Greater Atlanta. "For many, increases in income do not begin to keep up with the rising cost of necessities."

For the individual calling CCCS in January, the $531 spent on food and gas accounted for about 30% of their monthly living expenses of $1,774.

The increase in spending on gasoline was most dramatic, rising from an average of $182 in January 2007 to $215 in January 2008. Since 2003, average spending on gasoline has almost doubled from its January 2003 low of $112 per month. Average spending on groceries increased 4 percent from January 2007 to January 2008, rising from $303 per month to $316.

CCCS professional counselors offer individual, confidential advice for developing budgets, managing money, using credit wisely and building a savings plan. Counselors will review a person's financial situation and help determine the best possible financial strategies. The counselor will offer solutions to a person's current financial problems, as well as personalized plans for preventing financial pitfalls in the years to come.

This service is available in English or Spanish. People can call for a free budget counseling session today at 1-800-251-CCCS (2227), or can begin an online counseling session at www.cccsinc.org.

About CCCS

Consumer Credit Counseling Service of Greater Atlanta is a 501(c)3 nonprofit community-service agency that provides confidential budget counseling, money management education, debt management programs, bankruptcy counseling and education, and comprehensive housing counseling. The agency serves nearly 400,000 consumers, who are primarily from low- and moderate- income households, in all 50 states.

Consumers can speak to counselors in English and Spanish 24 hours a day, 365 days a year, by phone at 1-800-251-CCCS, and also access the agency's web sites, www.cccsinc.org and www.cccsenespanol.org where live-chat counselors are available around the clock.

SOURCE Consumer Credit Counseling Service of Greater Atlanta, Inc.

Contact Galler Law Firm for a Free Bankrupcty Consultation.

Georgia Bankruptcy Cases on the Rise

Georgia bankruptcy court filings in the state's northern district, which includes metro Atlanta, rose by nearly 23 percent from 2006 to 2007.

Now Chief Judge Joyce Bihary of the U.S. Bankruptcy Court for the Northern District of Georgia says she expects that number to increase by some 6,000 to 7,000 filings in 2008 -- another troubling indication for an economy that is showing signs of slipping into recession.

Behind only the Eastern District of Michigan, which includes Detroit and is home to the state with the nation's highest unemployment rate, the Northern District of Georgia has the second-most filings in the U.S., Bihary said. That number was 31,435 in 2007, up 22.6 percent from 2006.

Bihary sees the consequences of a market in which incomes exceed the national average but credit scores lag behind the national average.

"People need to be more realistic about what they can really afford," she said. "People who have bought homes -- much more home than they can possibly afford -- are well-advised to find less expensive housing that would meet their needs.

"As a society, we need to do everything we can to increase financial literacy. The need to understand the range of products, mortgage and credit cards, is so pressing."

The court has just eight judges to process cases, which is 13 fewer than the court that serves Los Angeles, the nation's second-largest city. The last time the Northern District of Georgia received an increase in its number of judges was 1993. From 1990 to 2007, the state's population grew by more than 3 million, according to the Web site of the U.S. Census, and the large majority of that growth came in metro Atlanta.

As a result, Bihary said she will put in a request to the Judicial Conference of the United States for two additional judges in June. An act of Congress is necessary to approve the request.

Before the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, many people hurried to file before changes to the law took effect that were not as lenient on filers as the previous terms. Thus, 50,948 claims were filed in 2005, compared with 24,326 in 2006.

Bihary said she considered both of those years "aberrational."

"We are within a few hundred of where we were in the year before the 2001 recession," said Bihary, who has been a bankruptcy judge for more than 20 years and the chief judge in the district since December 2003.

In 2000, the court processed 31,906 filings, 471 less than in 2007. In 2001, the numbers jumped by 6,219. That past experience is why Bihary said she expects the 6,000 to 7,000 increase.

And that's just if a possible recession is proportional to 2000. If it is worse, the number could be more. Many of the individuals who come before the court are driven there by job loss, which results in foreclosures on their homes, Bihary said, and those individuals file Chapter 13 claims.

Chapter 13 is defined as enabling "individuals with regular income to develop a plan to repay all or part of their debts," according to the Web site for the U.S. federal courts. Bihary said that for the first three quarters of the fiscal year 2007, which ended on Sept. 30, 52.88 percent of the cases the Northern District of Georgia confirmed were Chapter 13 filings. Individuals file far more claims than businesses.

Bihary said that one reason for the large number of cases filed in her district is a state law that makes it easier for lenders to foreclose on properties in Georgia than in other states. Many states require a judicial proceeding before a lender can foreclose on a property, but Georgia does not. "Undoubtedly, it's heavily influenced by state laws, but the growth of the population is a huge piece of it [too]."

And subprime lending issues are the usual culprit in this area, as well.

"In the current environment, we're obviously dealing with results of lax lending standards," she said. "One of the positive results of this is that consumers are asking more questions about laws. They're studying more about adjustable rates. Most didn't know they had it."

In 2007, the three Chapter 13 trustees at the Northern District of Georgia processed $180 million worth of payments, leaving one to wonder the true value -- hundreds of millions, if not billions, of dollars -- of debts left unpaid.

Because, as Bihary said, 2005, with what the judge called "pre-emptive" filings, and 2006 were unusual years because of the changes to the law, the most accurate comparison for trustee payments is 2004. That year, trustee payments were $30 million less than 2007 at $149.68 million, according to Yvonne Evans, the clerk of the court.

Georgia Bankruptcy Filings

Total per year

2007 - 31,435
2006 - 24,326
2005 - 50,948*
2004 - 44,737
2003 - 46,339

*Last year before new federal law took effect.

Contact Galler Law Firm for your bankruptcy needs.

How to Prepare for Bankruptcy

Filing under the bankruptcy code is much like having surgery for a serious medical problem, it is not your first choice but it you have a serious enough issue it may be the best cure for your problem.

If you feel you are ready for to file you should review the list below and consult with an attorney. An attorney can help you plan for the bankruptcy, decide when to file a bankruptcy petition, or even avoid filing for bankruptcy.

1. If you intend to file bankruptcy you should stop using your credit cards. If you borrow money with the specific intent of discharging the debt in bankruptcy instead of paying it back, the debt is not dischargeable. In addition, three specific circumstances are worth mentioning: (a) certain luxury purchases over $1000 within 60 days of the bankruptcy filing are presumed non-dischargeable; (b) cash advances aggregating $1000 within 60 days of the bankruptcy filing are presumed non-dischargeable; and, (c) debts involving materially false financial statements are non-dischargeable under certain circumstances.

2. Don't transfer your assets to friends, family and business associates to protect the assets from your creditors. The transfer may be considered a fraudulent conveyance. If it is, you may lose both the property and your right to a bankruptcy discharge.

3. Don't destroy any business or financial records. You can lose your right to a bankruptcy discharge as a result.

4. Carefully choose the creditors you pay. Some creditors, such as landlords, secured creditors, and some utilities should be paid under most circumstances. If you pay a credit card debt that eventually will be discharged, you may be throwing money away. Your attorney should advise you on what debts should and should not be paid while you prepare to file a bankruptcy petition.

If you live in the Atlanta Georgia area please visit our website and set up a free consultation with one of the attorneys at Galler Law Firm.

Georgia Free Credit Report

How to Obtain a Copy of Your Credit Report

Free credit reports

Due to the passage of the 2003 Fair and Accurate Credit Transaction Act (FACTA), all Americans are entitled to one free credit report from each of the three major credit reporting agencies -- Equifax, Experian and TransUnion -- upon request every 12 months. There are several ways you can request your free credit report:

• Online: Visit AnnualCreditReport.com
• Telephone: (877)-322-8228
• Mail: Complete the Annual Credit Report Request form and mail it to the following address:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281

Residents of Georgia are entitled to one free copy of their credit report each 12 months from each of the three main credit agencies per federal law and one free copy of their credit report each 12 months from each of the three main credit agencies to satisfy their state's law.

The second free report can be obtained by directly calling each credit bureau:

• Equifax: 1-800-685-1111 www.equifax.com
• Experian: 1-888-397-3742 www.ExperianDirect.com
• TransUnion: 1-800-916-8800 www.transunion.com

January Bills & Bankruptcy

2008 will prove to be the worst financial year in history for many people. As families settle down after a joyous holiday season of togetherness, tensions begin to mount as the merchants cheerfully send out their post-seasonal bills. They’ve made their money. Now it’s time for you to pay up.

“Wait just a minute,” you may be thinking. “How is this year any different than the rest?” Great question. In short, there are a number of factors that individually would not be of much significance, but this year they may all come into alignment to create financial hardships for millions of hardworking Americans.

If it happens to you, the pressure and stress of a financial burden can feel like the weight of the world is upon you. If you find yourself in such a dire financial situation, you must know that there are resources and legal ways that you can recover, without losing your home, your car, or other assets that you worked so hard to attain.

You may recall that many credit card companies changed their minimum payment policies last year. If you normally pay your bill in full but spent a little extra for gifts this past season, the higher required payment might take you by surprise.

If you took advantage of the subprime lending rates on your home and either refinanced or borrowed against your equity, the added payments from adjustable rates mortgages might be creating an additional financial pinch in the coming months.

Complicating matters further, bankruptcy laws changed significantly in 2005, making it harder to qualify for debt forgiveness due to newly imposed income tests to prove eligibility for filing Chapter 7 or Chapter 13.

The icing on the cake, if your (former) employer was kind-hearted enough to keep you on their payroll through the holidays, but unexpectedly slipped you the bad news that your services were no longer needed after the New Year, the combination of all of the above means that your walls are closing in on you, and it can sometimes be difficult (or impossible) to maintain your objectivity.

Help is nearby.

No responsible citizen wants to throw in the towel and fail to meet their financial obligations. But clearly there has been a growing pattern of commercial pressure to lure you into what seems like an unrecoverable situation. Was it a conspiracy? No. There is no need to be paranoid about it. But as oil companies, utility companies, banks, and merchants are reporting record profits, the greed of corporate America has led to an all-time high consumer debt.

The worst part about this depressing picture is that you, the consumer who supports the economy with your hard-earned dollars, is more often a victim of commercial advertising strategies designed to part you from your money. Face it, companies sink millions of dollars into marketing, advertising, and conducting studies to learn how to target you, their valued patron. Unfortunately, you weren’t privy to the results of their research which told them exactly how to hit your hot buttons. On top of that, circumstances beyond your control like increasing mortgage rates, loss of a job, and so on can mount up to devastation.

There are laws in place and tools available to protect your interests if this has happened to you, so do yourself a favor: take a deep breath, pick up the telephone, and make a simple phone call to a qualified financial attorney. Ask for a consultation, and learn what you can do to preserve your livelihood, your assets, your family, and your peace of mind.

To schedule a free consultation visit our website at http://www.gallerlaw.com/galler_bankruptcy.html