Things You Should Know Before Filing Bankruptcy in the Winter

Bankruptcy is a very powerful tool that helps millions of Americans get relief from crushing debt every year.  The ultimate goal of a bankruptcy is the bankruptcy discharge, basically an order prohibiting the affected creditors from ever collecting on a discharged debt.  December is typically a slow month for bankruptcy filings, but the subsequent months might be even worse, depending on your situation.

If you used your credit cards for Christmas, they may be nondischargeable. - 11 U.S.C.§ 523(a)(2)(C)(i)(I) states that consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable.

Likewise, if you got cash advances for Christmas, the debt may be nondischargeable. - 11 U.S.C.§ 523(a)(2)(C)(i)(I) states that cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable.

If neither one of those fit your situation, creditors will sometimes ask that a debt be declared nondischargeable due to fraud.  They will essentially say that you made misrepresentations about your financial condition when using your credit cards and you knew that you would be unable to make the payments.  They generally use  11 U.S.C.§ 523(a)(2)(A) to argue this, which states that a discharge does not apply to any debt for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition.

If you are considering filing bankruptcy, the longer that you wait between credit card usage and filing your bankruptcy the better.  If you used any credit card for more than $500, it is best to wait at least 90 days before filing your bankruptcy.

If you receive large tax refunds, it might make since to wait until after you have received it and spent most of it.  Chapter 7 bankruptcy is a liquidation bankruptcy.  You turn over all of your unexempt assets over to the trustee.  The trustee may liquidate any unexempt asset that you have the right to receive within 6 months after the filing of the bankruptcy petition.  If you are filing bankruptcy during the winter months, one of the assets may be your tax refund.  The amount of what is exempt depends on state law.  For instance, people in Georgia may be able to protect up to $5,600 pursuant to O.C.G.A. §44-13-100(a)(6), however Louisiana residents can only protect the portion of their refund attributable to the earned income credit, and Florida residents who own a home can only exempt $1,000 in personal property (this includes furniture, clothing, cash, and tax refunds).  Many jurisdictions require Chapter 13 debtors turn over all or most of their tax refund to the trustee every year that their case is pending.

If you generally get large tax refunds, it might make sense to wait to file your taxes until after you have received and spent most or all of the tax refund.  That does not mean that you should go spend the refund as fast as possible for the purposes of filing bankruptcy.  The trustee may ask you to show where you spent the money and can seek judgement against friends and family that have been paid with the refund or even ask that your case be dismissed for fraud.  You can use the money to pay utility bills, catch up rent payments or car payments, make minor home and car repairs, etc.

If you are considering filing bankruptcy, Simplified Document Solutions can help you get a bankruptcy discharge for a low flat $249 fee.  To get more information, please call Charles at (678) 490-5841 or visit our website at www.249bankruptcy.com.


Visit & Like us on Facebook to stay up to date on new changes to the bankruptcy code, as well as special offers by Simplified Document Solutions.


This is intended as general information, not legal advice.  Your situation may have complexities that are unknown to the author and have not been considered in this blog.  If you have specific questions about your situation, you may wish to obtain information from competent counsel.

Atlanta debtors are saving thousands using paralegal services

The U.S. Bankruptcy Court in Atlanta is reporting a substantial increase in pro-se bankruptcy filings.  Pro-se debtors are those advocating on their own behalf before the bankruptcy court, rather than being represented by an attorney.  Many ask how they are able to represent themselves and if they are successful.

The average attorney in Atlanta is now charging $1500 for even the most simple Chapter 7 bankruptcy petitions, and many are charging in excess of $2500.  These same attorneys will hand your file off to a paralegal to do everything.  Depending on the attorney you select, you may not even get the chance to meet with the attorney, as everything is done by the paralegal.  More and more often, Debtors are choosing to go directly to the paralegal, avoiding the attorney markup.

There are a couple of ways that debtors represent themselves in bankruptcy court.  First, one can download the forms from the court website.  I tried to help a friend do this a couple of years ago and even with 7 years experience in the bankruptcy system, I found the forms to be a nightmare.  For the life of me, I do not know how an individual with little to no experience with the Court system can get through this.  In fact, many of the people that try to do this are unsuccessful due to the complexity and sheer number of the forms.

A second, and slightly better option, is utilizing software that can be purchased online.  This will probably help ensure most of the forms are completed and makes completing them infinitely easier than trying to do it without software.  The software generally only knows the official national forms, which is MOST of what you need, but will likely not include local forms and the software engineers are not familiar with local court policies and procedures.

The third, and probably the best, option is to hire an experienced bankruptcy paralegal, or petition preparer.  The bankruptcy code permits non-attorneys to assist pro-se individuals pursuant to 11 U.S.C. 110.  Petition preparers are certainly not all created equal.  Some preparers will only meet with clients online or over the phone.  Some preparers advertise all over the country and do not specialize in local courts, this poses the same problem as online software companies do.  Yet others do not comply with all of the requirements of the law and do not disclose themselves to the Court.  Failure to disclose yourself as a petition preparer is criminal and can case thousands of dollars in fines to be assessed.  If your preparer is not disclosing themselves to the Court, one has to ask, What are you hiding?  Perhaps it is because they have been banned from assisting individuals with their bankruptcies, likely for screwing someone's bankruptcy up.

I have over 7 years of experience with filing bankruptcy petitions in the Northern and Middle Districts of Georgia both pro-se and under attorneys.  I have prepared thousands of bankruptcy petitions, discharging millions of dollars in debt.  I comply with all aspects of the law and will make my self available to you throughout the entire bankruptcy process.

 

If you are considering filing bankruptcy, and live in the Northern District of Georgia, I would love to help.  I charge a flat rate of $249 for both Chapter 7 and Chapter 13.  For that $249, I can help you obtain a credit report, prepare ALL of the documents that you will need to file your bankruptcy in Atlanta, I will bring them to your home and review all documents with you, and remind you of your hearing.

I can be reached at (678) 490-5841 or visit my website at http://www.249bankruptcy.com.