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1. What is Bankruptcy?
Bankruptcy
is a way to deal with creditors when debt has become
unbearable, and there is no reasonable expectation that your
bills can be paid. Federal laws are there to protect you
when you are having financial difficulties. There are two
different types of Bankruptcy for consumers (individuals),
but they will both stop the stress, the harassment and
creditor actions. You may consider filing Chapter 7 or
Chapter 13.
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2. Will Bankruptcy stop collection activities by
creditors?
Yes, all
collection activities must cease upon the filing of a
Bankruptcy. Bankruptcy will stop foreclosure, wage
garnishment, bank garnishment, repossessions, lawsuits,
collection letters and phone calls.
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3. What are causes for filing Bankruptcy?
The
most common reasons for consumer bankruptcy are:
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Job
loss or layoff
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Loss of
overtime hours, or part time job
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Illnesses or injury
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Death,
injury or disability of a spouse
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Separation, divorce or marital problems
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Over-extended credit
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Other
expenses
What has
happened to many of our clients is that initially they got
behind on their credit cards. Suddenly the interest rate
that used to be 12% zoomed to 27%. Not only did the
interest rate become outrageous, they were also having to
pay over the limit fees and late fees.
Even when payments were made to the credit company, the
balance kept growing and growing. It became impossible
to ever pay off the credit card(s). This became an unending
nightmare. We can put an end to this.
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4. What is Chapter 7?
Chapter 7
is a quick, inexpensive way to get your financial “fresh
start”. It is a great way to get rid of debt such as credit
cards, medical bills and repossession balances. You can
file a Chapter 7 case even if you have a home or car you
want to keep. You must be current on your mortgage and/or
car payments or creditors could still take those
properties. This is usually the best solution if you are
overwhelmed with credit card and other debt but current on
your home and car or have no mortgage or car payment.
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5. What is Chapter 13?
Chapter 13
is often the choice of debt relief for those who have gotten
behind on their mortgage and/or car note and can’t seem to
catch up. It is a debt consolidation payment plan, thus,
you must have steady income to qualify. (If you are
married, you may qualify if your spouse has income.)
Payments are made to a Trustee and, in turn, the Trustee
pays your creditors.
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6. What are the differences in Chapter 7 and Chapter 13?
Chapter 7
is usually used by come someone with large amounts of
unsecured debt such as credit cards, medical expenses and
old accounts. Chapter 7 gives you a fresh start. Chapter
13 is used by someone who is trying to save property such as
an automobile or home. It is a payment plan bankruptcy.
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7. Can I keep my property in a Chapter 7?
Usually,
yes. Most of our clients who file a Chapter 7 bankruptcy
are able to keep all of their property. However, you will
need to be current on your house payment and car payment in
order to keep them.
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8. Can I keep my property in a Chapter 13?
Yes. Most
people file Chapter 13 in order to keep their house or car.
You do not have to be current on your house or car payment.
You also have the option to surrender any property you do
not want, such as an automobile or home.
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9. What will my payment be in a Chapter 13 case?
Your
Chapter 13 payment depends on how much you owe and what
kind of debt it is. You are allowed to keep and spend so
much of your income as is necessary to maintain a
reasonable standard of living. Some debts can be paid
back at as little as one cent on the dollar. We would
be able to tell you your payment amount at your initial
consultation.
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10. Who can file a Chapter 13 case?
To file a
Bankruptcy case in Georgia, you must be a Georgia resident
and have a regular source of income, such as wages,
unemployment benefits, social security or retirement.
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11. Will Bankruptcy stop a foreclosure?
Yes,
provided it is filed prior to the property being sold. Upon
filing the Bankruptcy, we immediately notify the mortgage
company and the foreclosure attorneys to advise them to stop
the foreclosure.
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12. Will Bankruptcy stop a garnishment?
Yes. When
we file your case, we notify the creditor that a bankruptcy
has been filed and the garnishment must cease immediately.
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13. Can Bankruptcy stop a lawsuit?
Yes. A
Bankruptcy will immediately stop a civil lawsuit against
you. We will immediately notify the Court and the creditor
and the lawsuit must cease.
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14. Can Bankruptcy help me if I owe back taxes?
Yes,
depending on your situation, you may be able to wipe out old
taxes, or put them into a payment plan you can afford.
Bankruptcy can stop penalties and interest from accruing. If
you have tax issues, please bring any relevant documents
with you when you meet with us.
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15. I am behind on child support. Can Bankruptcy help me?
Yes. Past
due child support payments can be paid through a Chapter 13
Bankruptcy. Payments which come due after the filing of the
Chapter 13 must be paid directly by you.
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16. If I co-signed on a debt, can Bankruptcy help me?
Yes.
Several options are available to you. If the debt involves
property and you want to keep the property, you may include
it in your Chapter 13 Bankruptcy. You also have the option
of “surrendering” the property and either having the debt
discharged or having it treated as an unsecured debt. If the
debt was unsecured to begin with (that is, no collateral was
used to obtain the loan), we can usually have the debt
discharged just as your credit cards would be.
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17. What if my vehicle has already been repossessed?
In most
cases you can get your car back. However, once the car has
been sold, we will not be able to get it back. If you have
an old repossession, we can help you get rid of that
deficiency balance you may owe on the car.
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18. If I’m married, can I file by myself?
Yes. If
you are married you may file Bankruptcy together with your
spouse or on your own.
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19. Will I have to go to Court?
Yes. Most
of our clients have to go to the Courthouse one time for
what is called the Meeting of Creditors. However, you do
not appear before a Judge. Instead, we meet with a Trustee
who asks you questions concerning your financial situation.
The role of the Trustee is to make certain that the
information in the Bankruptcy petition is correct. Usually
that is the only appearance our clients have to make.
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20. What happens to my credit after filing Bankruptcy?
A
Bankruptcy may be listed in credit reports for up to 10
years. However, by the time most debtors have filed
Bankruptcy, their credit rating is already damaged by late
payments, repossessions, lawsuits, foreclosures and other
debt problems which can also be reported on your credit.
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21. Can I get credit after a Bankruptcy case?
Yes. In
the past it was difficult to obtain credit after filing
Bankruptcy. That has changed. After your Bankruptcy is
over and you have received your discharge you should be able
to obtain credit because you will not have all of the
discharged bills to pay. Of course, you should make all of
your payments on time to rebuild your credit. We have had
clients who were able to purchase a home or car shortly
after receiving their discharge.
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22. Who notifies my creditors and bill collectors?
After your
Bankruptcy is filed, the Bankruptcy Court mails a notice to
all the creditors you listed in your case. This usually
takes a week to ten days. However, if it is an emergency or
if one of your creditors is really being aggressive, we will
contact and fax notice of the Bankruptcy to the creditor
immediately.
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23. But I feel “Guilty” about filing Bankruptcy.
This is
the most common misunderstanding about Bankruptcy. Courts
view Bankruptcy as the responsible approach if your debts
have gotten to the point that they can not be repaid. It is
much better to obtain a fresh start, adjust your spending
and take control of your financial future than to be
constantly avoiding creditors. Bankruptcy provides you with
the ability to take control of your finances rather than
having creditors tell you what you must do.
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24. What do I do next?
First, you
should call us to make an appointment (404-815-1600).
You should
bring to that appointment:
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A list
of all of your creditors including their complete
mailing address (P.O. Boxes are fine), and how much is owed
to each creditor. This list should include your mortgage
company if you have one, your car creditor, your student
loan address, and all of your other creditors. You need to
provide these addresses even if you want to keep your home
and car. You may also want to bring the bills with you to
the appointment to make certain we have all of the needed
information.
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We need to
see your drivers license or state I.D. and your social security card or something with your social
security number on it.
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We need
two or three of your most recent pay stubs and the
pay stubs of your spouse even if he or she is not filing
with you.
This should
get us started. We may need more information depending on
your circumstances but we should be able to tell you what we
need when we meet with you.
We look
forward to being able to help you retake control of your
future.
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Disclaimer and Privacy |
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Copyright © 2004 Colliersmith & Associates PC, All rights reserved.
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