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.