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How Much Should I Pay for a Bankruptcy?

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When you’re broke and you’re thinking about filing bankruptcy finding a good price is something that’s definitely on  your mind. In fact, cheaper looks good. If some lawyer is willing to do my bankruptcy for $500 why should I pay someone else $1,000 or $1,500? You may think you’re getting a deal but like answers to many questions in the law, what you’re getting may not always be best for you.

The Costs of Bankruptcy depends on your facts

Whether you need to file bankruptcy now, later or not at all depends on how your personal financial situation fits into the protections provided by the bankruptcy code. Our attorneys, during your free consultation, will gather these facts and analyze your situation so that we can figure out how to best help you using the existing bankruptcy laws. If your bankruptcy lawyer doesn’t look in the right places, know what rocks to turn over or isn’t completely familiar with the bankruptcy code, you’ll probably his some pretty big snags in your case. With the caveat that there is no direct and sure-fire connection between cost and quality, let’s talk about how much it should cost you to get back on the road to financial prosperity.

How to figure what you should pay

  1.  The person charging the least is probably not for you.  Chances are, they’re new or they are dabbling in a very complicated section of the code.  Maybe they’re trying to upsell you another product and they’re farming out the actual work of the bankruptcy to someone who knows even less than they do. Additionally, do you really want the cheapest guy in town advising you about your finances.  As with everything in life, you get what you pay for.
  1.  The more you’ve got, the more protection you’ll need.

If you have substantial assets, it more than likely that you’re going to have to pay more for a bankruptcy attorney.  If you’re filing to save your house or stop big money lawsuits, you need to call in the big guns. You don’t need to hire someone who occasionally files a bankruptcy for buddies or someone who is fresh out of law school. It’s one thing to just discharge old credit card debt, but when real money’s on the line, you don’t want to go cut rate.

  1.  If you’re involved financially with lots of people, you’re going to need a good lawyer.

Do you have business partners? Do you own property with someone else? Have you set aside a chunk of change for your kids? All of these situations can fall under specialized parts of the bankruptcy code that most people who only do bankruptcy part time don’t know about.

  1.  Who is coming after you for money?  

If you’re up against the big boys like the IRS, Child Support collections, wealthy ex business partners or investors or an angry, well funded ex spouse you better lawyer up in a big way. The stronger your opposition, the more money they have to investigate you and dig through your life for money they can recover.

What should you actually get for your money?

When you choose a bankruptcy lawyer you need to look for someone who is familiar with the law and has the skills to see how the law applies to your individual case. The more you pay, the more likely you are to feel entitled to access to the attorney and their responsiveness to you, no matter how crazy your question sounds or how frequently you need questions answered.   Price alone isn’t always indicative of good customer service. In fact, some of the most expensive lawyers in the area are the most likely to farm your work out to others. On the opposite end though, low fees don’t usually leave room for the attorney to develop interpersonal relationships and give you excellent customer service.

So, how much should I actually pay?

At the risk of sounding cliche, it all depends on your situation. It can depend on the cost of living where you are, legal fees just cost more in Atlanta than they do in Newnan.  It also depends on your individual circumstances. If you have easy debts like credit cards, if you’re a W-2 employee or if you don’t have a ton of assets, you’ll usually find that your bankruptcy will cost less.  Another thing to consider is the legal market where you are. Be prepared to meet with several lawyers. The best Bankruptcy attorneys in the area offer free consultations. You should meet with at least two bankruptcy attorneys before you decide which attorney should represent you.  Finally, be prepared to reject law firms that don’t speak with you candidly and offer you up front pricing and fees. You should also feel comfortable with your attorney and quiz them about their experience.

Finally, just because someone charges the most doesn’t mean they’re the best. It just means they charge the most.  

If you find yourself needing quality representation, I hope you’ll give our attorneys a chance to earn your business.  Contact us today to schedule a free, no pressure, consultation to determine how we can help get you back on the road to financial prosperity. 

Cleaning Up Finances Before Bankruptcy

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There’s good reason to tidy up.  The popular show on a major streaming service has made tidying up a national sensation. Many people try to cleaning up finances before bankruptcy but that isn’t always a good idea. In fact, don’t waste your time cleaning up finances before bankruptcy and especially before you consult with a bankruptcy attorney.

Doing this could result in you wasting money or losing options under the bankruptcy code if you make any last minute changes to your financial situation. Your situation has the most options available to you if your attorney sees your financial picture in its totality.  What looks like a mess to you may look like major opportunities and significant advantages to your bankruptcy counsel.

There’s a potentially high cost to trying to tidy up.

The most sickening feeling I get when consulting with a client is when they tell me they just paid off a debt to a family member, borrowed against their retirement to satisfy debts, or paid off taxes in lieu of something else while cleaning up finances before bankruptcy. None of these things should be done without seeing a competent bankruptcy attorney.

Paying off debts to family

Paying off our family seems like the right thing to do.  We want to take care of our family, especially when they took a risk by loaning us money.  People do this for many different reasons. Some do it to hide the fact that they had to file bankruptcy while others do it to potentially protect assets from the bankruptcy process before you file.  

The most likely outcome of this situation is that paying off these people (friends, family, business partners) will actually hurt you and them more than it helps anyone. The Trustee can sue family members and friends you’ve paid off for during the preceding year to recover the money you paid them. These payments are often known as preferential payments and they are not legal under the bankruptcy code.  Under bankruptcy, there must be fair payments to ALL creditors, not just the ones you want to pay off.

Often, the exemptions allowed in Georgia will protect more of your money than you expect.  Once your case is concluded, you can pay off your family or friends without any kind of adverse consequences.  In other words, hold onto your money until AFTER you’ve consulted with an attorney.

Most settlements before bankruptcy are a waste

One of the most troubling scenarios I’ve seen in recent times involved an older couple who had spent more than 5 years trying to pay off credit card debt through a debt settlement agency.  They did this in lieu of meeting with a bankruptcy attorney. What they didn’t realize was that despite all the thousands of dollars they had spent, not all of their debts were being paid through the settlement. They had to file bankruptcy anyways and they got no credit from the money they spent trying to pay off their credit cards.  During this time they struggled to pay their property taxes and student loans and they ultimately fell into default as well.

The better option for that would have likely been to file bankruptcy and use the excess money they had to retire the tax debt or pay off their student loans as those two types of debts are not dischargeable under bankruptcy.

Generally speaking, your bankruptcy will be no simpler, less expensive or less damaging to your credit based on the number of creditors you have.  If you have to file bankruptcy, reducing the number of creditors you have isn’t going to matter to your case.

Tax debt can actually be useful

Generally speaking, people usually think owing the government is bad business.  However, in your bankruptcy case it could actually be an asset if your income is above the average in your state.  This helps with the means test that helps determine if you make too much money for a Chapter 7. You can deduct the tax debts you owe from your income in order to qualify for a Chapter 7 in certain cases. The same thing goes for mortgage arrearages and property taxes you owe on your home.  These types of debts can be useful in getting you into the type of bankruptcy you want to file. If you eliminate this type of debt before you consult with an attorney and it leaves us with fewer tools to adjust your income when working with the means test.

Stop trying to clean things up

Don’t make the mistake of cleaning up finances before bankruptcy if you haven’t consulted with an attorney.  We need to see all the pieces, broken or not. Don’t try to sweep debts under the carpet or pay them off before you consult with a competent bankruptcy attorney. The attorneys at Harmon and Gorove have decades of experience in helping people clean up their financial mess and get their life back.  Contact us today for a free consultation to see how we can help you.

Presidents Who Have Filed Bankruptcy

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If you’re feeling burdened by debt and you think that you’re alone, think again.  Some of history’s most well known people; celebrities, politicians and other world leaders have found themselves facing financial hardships. Even several Presidents have found themselves in serious financial trouble.  Below I’ll list several U.S. Presidents who have filed bankruptcy either before or after they left office.

Thomas Jefferson

Thomas Jefferson was a brilliant lawyer, a gifted writer and a wealthy landowner but Jefferson wasn’t the best at managing his finances. His main occupation was that of a farmer.  Due to this he suffered the ups and downs that often go with the unpredictable nature of agriculture. He also used his considerable wealth to lend out money and the payments made against those loans were often unreliable. He also inherited debt from his father-in-law and from a friend who did not pay off a debt that Jefferson had co-signed. Jefferson also had problems with his spending.  Jefferson’s love of luxury led to expensive spending habits as well and he died with more than $100,000 in debt (roughly 2-3 million dollars in today). However, unlike today, he didn’t have the option to file bankruptcy except during a brief window from 1800 to 1803, which he did utilize. Thomas Jefferson died broke and unable to pass along any assets to his heirs and was even unable to free his slaves at his death as they were considered property and were auctioned to settle his debts but Jefferson wasn’t the last of the Presidents who have filed bankruptcy.

Abraham Lincoln

Abraham Lincoln, one of our greatest presidents, found himself in the soup financially after the failure of a business venture. Lincoln even found himself having to assume more than half of the debt from this failed venture when his partner in the business died shortly after the business shut its doors. Lincoln, out of a sense of duty, assumed the debt and struggled for some time with it. Lincoln lost all of his assets and he spent several years trying to pay off the debts. Despite all this hardship, Lincoln was undaunted and didn’t allow the stigma of bankruptcy  to follow him for years on end. Just a mere 8 years later, Lincoln was elected to Congress and in 1860 became President of the United States. Lincoln had trouble with his finances for the rest of his life largely due to his wife’s extravagant spending habits which she carried over even after his death in 1865.  Lincoln was one of the first Presidents who have filed bankruptcy

Ulysses S. Grant

Grant was a Civil War hero who many credit with saving the Union, right along with Abraham Lincoln. As good as Grant was on the battlefield, he was an awful businessman. Grant, with his judgement often clouded by his alcoholism, made a series of bad investments. Grant invested heavily in Grant & Ward, a Wall-Street investment company set up by his son and his son’s friend Ferdinand Ward. Ward stole and embezzled the funds Grant invested, eventually going to jail for it. This didn’t change the fact that the President was still on the hook for hundreds of thousands of dollars of debt after Grant & Ward failed and he went bankrupt. Ulysses Grant worked nearly until his dying day writing his memoirs and only way he was able to repay any of his creditors was through selling his Civil War memoirs which were published posthumously.

William McKinley

William McKinley was a lawyer like Thomas Jefferson and like Jefferson, McKinley cosigned on a debt for a friend.  When this friend decided to bankrupt on the debt, McKinley was forced to take over the debt as a co-signer. All of this occurred shortly after his election as Governor and he was forced to declare bankruptcy while serving as the Governor of Ohio.  Bankruptcy wasn’t all bad for McKinley. Less than three years later, he was elected President of the United States.

Donald J. Trump

Donald Trump is a businessman who inherited the business his sons now manage called the Trump Organization in the 1970s when his father retired from the business.  While Trump did see a great deal of success as a real estate investor, perhaps his biggest failure was as the owner of several Atlantic City Casinos during the late 1980s and early 1990s.  Trump’s casino, the Trump Taj Mahal, found itself 3 billion dollars in debt with Trump personally guaranteeing nearly 1 billion dollars worth of the debt personally.  Trump was forced to sell off several pieces of personal property including a yacht and an investment in an airline to satisfy the debts and even then he was forced to make payments on the debt for several years after due to debts that weren’t discharged in the bankruptcy. While Donald Trump is the most recent of the Presidents who have filed bankruptcy, I’m sure he won’t be the last. 

Even great people find themselves overwhelmed by debt. Whether that’s due to failed businesses, a job loss, medical emergencies or illness, or just bad luck. Bankruptcy is a resource that can help you get back on your feet and give you a fresh start if you, like these Presidents, find yourself in over your head. Call us today to learn what your options are!

Timing Bankruptcy: How Often Can I file?

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Timing Bankruptcy is very important and can have an impact on when and what types of cases you can file. The first thing you must realize is that there isn’t a set number of times a person can file for bankruptcy in their life, if you’re eligible to file, you can do it.  Just because you CAN file 5 or more times in your life, doesn’t mean you can actually get what is called a discharge of your debts. A discharge is the complete and total wipe out of your debt that comes upon completing a bankruptcy.

The biggest thing you must consider if you have to file for bankruptcy more than once in you life is timing bankruptcy correctly. If you completed a previous bankruptcy, whether it was a 7 or a 13, you have to wait a certain amount of time before you can receive a discharge in another bankruptcy. There are a number of factors that determine when and if you can file another bankruptcy and receive a discharge:

  • Which type of bankruptcy you file previously
  • When you filed the bankruptcy (ie. what date)
  • Whether your bankruptcy was completed (discharged), dismissed (voluntarily or involuntarily) or dismissed with prejudice (you can’t file bankruptcy again for a set period of time because of something you might have done.)

There are restrictions on timing bankruptcy as well.  When or whether you are eligible to discharge your debt again depends on whether you filed a 7 or a 13, when you filed that case, whether you received a discharge in that case and what kind of bankruptcy you want to file now.

  • If you file a Chapter 7 and want to file another Chapter 7: If you have filed a Chapter 7 Bankruptcy and received a discharge, you must wait 8 years to the day of the date you last filed for Chapter 7 Bankruptcy.  In other words, if you filed a Chapter 7 on May 1, 2010, you wouldn’t be eligible for another Chapter 7 until May 1, 2018.
  • If you file a Chapter 13 and want to file another Chapter 13: If you complete a Chapter 13 case and your debts are discharged you must wait 2 years from the date that your previous Chapter 13 was filed in order to file for and receive a discharge in a new Chapter 13.  This usually isn’t an issue though because it takes a minimum of 36 months to complete a Chapter 13 Plan. Generally speaking, you can file for a new Chapter 13 case pretty much immediately after your first Chapter 13 is closed.
  • If you file a Chapter 7 and want to file a Chapter 13: If you filed a Chapter 7 Bankruptcy and received a discharge, you can file a Chapter 13 case and be eligible for a discharge if the case is filed at least 4 years after the date you first filed your Chapter 7. One important thing to keep in mind is the fact that if you file a Chapter 13 after you complete a Chapter 7 and are discharged, you can still use a Chapter 13 to get caught up on debts that are of a high priority like mortgage deficiencies or missed auto loan payments even if you aren’t eligible for a discharge.
  • If you file a Chapter 13 and want to file a Chapter 7: If you completed your Chapter 13 case and received a discharge, you must wait 6 years from the date your Chapter 13 was filed before you may obtain a discharge in a Chapter 7 case.  There is an exception to this rule though. If your previous Chapter 13 was a 100% case, meaning that you paid your unsecured creditors back in full you may be eligible for a discharge in a Chapter 7.

The only way to know for sure which type of Bankruptcy you are eligible for and if timing bankruptcy correctly is in your interest is to speak with a competent and compassionate Newnan Georgia bankruptcy attorney. Our attorneys at Harmon & Gorove can offer you a completely free consultation in a judgement free and comfortable environment. We can review your current financial status and tell you exactly what would work best for your situation.  Whether it is a Chapter 7 Bankruptcy, Chapter 13 Bankruptcy or no bankruptcy at all.  We always look out of the best interest of our clients.  If you think Bankruptcy can help get your finances back on track, contact our office to schedule a free consultation today.

If You Need to File Bankruptcy, Don’t Wait

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If you are in financial trouble and you see no other way out, do not wait, speak to an attorney and if they recommend it, file bankruptcy immediately. The longer you put off the inevitable the more it will cost you. It will likely cost more in attorneys fees due to the increasing complexity of your case.  It will also cost you in terms of your credit score.  Yes, filing bankruptcy will have a negative impact on your credit, but it is just one factor in how they determine your overall creditworthiness. The longer you wait the lower you score will go, period. In some situations, it may be advisable to delay filing for a period of time. Most of the time though, once you know you need to file bankruptcy, don’t wait.

Matters of Importance

If you have been sent foreclosure paperwork and you have exhausted your other options, you are out of options and you must file to stave off the foreclosure. The same rings true with evictions, lawsuits, repossessions, and garnishments. Once you get the notice filing bankruptcy is the your last and best option. Filing bankruptcy immediately will mitigate the adverse actions of your creditors.

All of the aforementioned situations are matters of extreme importance. Competent bankruptcy lawyers will give you a breakdown of the bankruptcy timeline, including all the inflexible deadlines that must be met before and after you file. Your attorney is an expert in bankruptcy law; when they tell you that time is of the essence it is imperative to get them what they need so they may take action on your behalf as soon as possible.

Matters of Timing

In certain cases, it may benefit you if you wait to file until a certain date, your attorney would discuss this with you and explain why it is advantageous. An example of such a time would be, if your foreclosure is scheduled at a distant enough date, it may be financially savvy to delay your filing to include the coming months in your Chapter 13 plan.

In other instances, if you have taken on a large amount of debt recently or know that you will need to incur some debt in the coming weeks or months, it may be better to delay your filing until you can include those debts as well. You might also have recently made a significant transfer of property, which would affect the timeline of you filing for bankruptcy.

These situations are all less common issues. In the overwhelming majority of Chapter 7 bankruptcy cases, the sooner you file, the better.

If you’ve run out of options, don’t delay, file bankruptcy.

The faster your case gets filed the faster your credit will be able to heal. I simply can’t tell you how important credit can be in your life in today’s world. The sooner your debts are discharged, the sooner you can get back to focusing on the things in your life that actually matter. If you know bankruptcy is your only option, don’t procrastinate. Start the process immediately by calling the knowledgeable attorneys at Harmon and Gorove. They can start the process for you immediately.

Protecting Assets in Bankruptcy

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Many people believe that bankruptcy is a sign of hitting rock bottom but they would be wrong.  Bankruptcy is a tool in the law that can be used to actually protect assets and wealth from creditors.  Many famous and wealthy people have filed and survived bankruptcy with many emerging from bankruptcy and building an even greater net worth than they had prior to filing. While you may not be a celebrity or even extremely wealthy, bankruptcy bankruptcy can be a useful financial tool to help you get back on track. Yes, being financially depleted and bankruptcy often go hand in hand but It doesn’t have to be that way.  In other words, you don’t have to wait till you’re broke in order to file bankruptcy. In fact, it would probably be a better financial decision to file before you hit rock bottom.

Don’t wipe out your savings to stave off bankruptcy

Nearly 60 percent of Americans have saved less than one thousand dollars for an emergency. It is a side effect of the rising cost of living and the stagnation of wages in this country. If you’re one of the lucky people who actually do have a savingings, it would be highly advisable to file for bankruptcy before you wipe that savings out. In many cases a good bankruptcy lawyer will be able to find a way to protect most or all of your savings, especially savings you have in retirement accounts.  Any payments you make to creditors that would otherwise be discharged in a Chapter 7 are effectively just a donation to that creditor. Beyond that, even if you wanted to pay your creditor, any payments made to a specific creditor within a certain period of time of a bankruptcy filing can also be “clawed back” by a bankruptcy trustee which negates what you were doing to begin with.

DO NOT use your retirement funds

Your retirement account is a nest egg that you and/or your spouse has been building for decades. There are extremely few circumstances where it would be advisable for you to use your retirement account to pay down short term debts.  Virtually every retirement account in use today can be exempted from the bankruptcy which means you get to retain the value of that account for its intended purpose, your retirement.  Generally speaking, it makes much more financial sense to file bankruptcy to liquidate your retirement savings.

Don’t sell off your assets

The majority of Harmon and Gorove’s clients are able to keep most or all of their assets. Harmon and Gorove’s attorneys work hard to protect your assets from the trustee and creditors. Selling your assets to pay off creditors isn’t something that you have to do in most cases.  The attorneys at Harmon and Gorove work hard to make sure that your assets stay your assets. Protecting your assets in bankruptcy does require a good deal of expertise and planning, especially if you have a good deal of assets. If you have a significant number of liquid assets or rarer assets like a cash value life insurance policy or a pending lawsuit in which you could recover money, talk to a lawyer as soon as possible. Timelines are important in bankruptcy and anything you do to delay could cause you to lose irreplaceable assets. You should always be upfront with your lawyer about what assets you have, knowing beforehand is imperative to your ability to retain your assets.

Don’t ever give up

Bankruptcy provides many people with a clean slate.  Scrambling to sell off your assets or using up your savings isn’t using your money wisely, it’s panicking and making decisions that can change your life for the worse. Most people can see the need for a bankruptcy on the horizon. The warning signs are usually there long before people hit rock bottom. If you’re facing debts that seem insurmountable you should consider speaking with an experienced bankruptcy attorney before you get to the end of your rope. The staff of Harmon and Gorove are highly trained in exemption planning and asset protection.

Don’t wait

When your Bankruptcy is concluded, you will want to have as many tools to restart your financial life as possible. Keeping your retirement account, cash savings, homes and automobiles will provide you a new and fresh means of getting ahead after a bankruptcy. If you wipe out your assets before you file bankruptcy, the fresh start that bankruptcy provides won’t be as effective and won’t give you the advantages you need to get ahead.  Contact the attorneys at Harmon and Gorove today to see how we can help you get rid of your debts and get you started down a new path to financial success.