Archives Podcast

Will I lose my car if I file Chapter 7 bankruptcy?

Transcript: Hello, this is Georgia bankruptcy attorney Jeff Kelly, and the title of this podcast is Am I Going to Lose my Car if I File a Chapter 7? As of the recording date here, there are over 22 million unemployed people in this country due to no fault of their own. It is just a product of this Corona disaster. It’s expected by the end of April we might have over 40 million people unemployed. And a lot of people have questions about Chapter 7 and one of the most common ones I get as a bankruptcy attorney is am I going to lose my car? And the answer to that question is – almost all legal questions is, it depends. So let’s talk about why 99% of the people who file a Chapter 7, don’t lose their car. Well, let’s go through some hypotheticals. Let’s say you’ve got somebody, they have worked so hard, their car is paid for. Let’s say it’s worth about $5,000. They have tons of medical debt, tons of credit card debt. All that gets eliminated in a Chapter 7 and the car wouldn’t be a problem because in Georgia, there is a $5,000 exemption for cars. So that takes care of hypothetical number one. Let’s change it up a little bit. Hypothetical number two, let’s say the car is worth $10,000. You know what? It’s still not going to be a problem because we also have a $10,000 wildcard exemption. So actually you could bump the value up to $15,000, assuming we don’t have to use that wildcard exemption on other things. So as a general rule, that’s not going to be a problem either. Now, let’s create a hypothetical just for kicks, where somebody would lose car. Let’s say that car is paid for and it’s worth $30,000. I think you’re going to have a problem filing a Chapter 7 trying to keep that car. Does that mean you have no options at all? Well, what if you owe a $100,000 in credit cards, what are we going to do? Well, are we going to have to pay back a $100,000 in credit cards? The answer, no, we’re not. What we would probably do in that situation is we’d file a Chapter 13 and we would have to pay back to the creditors the same amount of money they would get if you were to file Chapter 7. So let’s say the car’s worth 30,000 and let’s say I can exempt $15,000 of it. That’s going to leave $15,000 exposed equity. And so we could, in theory and I’m just trying to keep the numbers clean here. There’s other you could do here, but just for argument’s sake, we pay back $15,000 to the unsecured creditors in a three to five-year Chapter 13 plan. And we would keep the car in a Chapter 13. Now if I did Chapter 7 though, let me give you — I want to tell you another story. I had this guy once, a few years back and he came in to meet with me to file Chapter 7. We spent about two hours going through his petition, making sure that it’s perfect. That’s what we do with every petition. I got to know him during that time, but he didn’t feel comfortable with me until the very, very end. He’s like, “I really feel like you’re a

Credit Card Companies are lowering credit card limits during Corona crisis.

Transcript: Hello this is bankruptcy attorney Jeff Kelly and Today is April the 24th 2020. Yesterday Bloomberg reported that major credit card companies are lowering credit limits because of this Corona outbreak. And what I want to talk about today in this podcast is why it is so important that you establish an emergency fund of cash for your family and not rely on a credit card to get you through rough times. I’ve heard many many clients say over the years that you know we’re that are filing Chapter 7 wiping out the debts we’re getting them a fresh start, and people will say I just cannot lose my credit card because I need the credit card. In case of an emergency, and that is a wrong way of thinking, in my opinion. What you need is cash in case of an emergency. Because if you’re relying on a credit card to help get you through a rough time, what are you going to do when the credit card company cuts your limit off and you can no longer use it? Credit cards are not and should never be considered your emergency plan the sole basis of your emergency plan, you need cash. So as we’re going through this tough time here, there are 26 million people who are unemployed today through no fault of their own because of this Coronavirus quarantine. So, what should a person do who has zero dollars in their emergency fund right now? Well, my advice is, as you do get your as you do get your hands on cash via unemployment payments or working part-time, whatever the sources save that money. I think an average family needs a minimum of about $5,000 in their savings account for an emergency fund. So does it make sense to pay credit card companies the minimum payments when you have no cash? It doesn’t make sense to drain your savings down to zero to make minimum payments on your credit cards? Absolutely not. That makes no sense. You’ve got to be able to have enough money for emergency food for your your utilities. So during this emergency time, food and utilities have to be number one. You’ve got to have money the setback for medicine for your family. The next line of importance is going to be rent or your mortgage payments. Now, I talked to a lot of clients and honestly, most of us make, including myself, we make a lot of major financial decisions based on emotion. And when you are going through a tough time if you’re unemployed, you have got to throw emotion out the window because the math has to work. Math trumps everything. It makes no mathematical sense to take your desperately needed cash to pay towards debt that you’re most likely going to end up wiping out and eliminating. In a bankruptcy case. If things get bad enough, you have to eat, you have to pay the electricity, you’ve got to pay rent, you’ve got to pay mortgage if you’re getting into a city Were rent and mortgages are not getting paid and things are heading south, then you have to come up with a new plan. There’s g

Am I going to lose my home because of this Corona mess?

Transcript: Hello, this is Jeff Kelly. And in this podcast, I would like to address a lot of fears that people have about losing their home during this Coronavirus pandemic. Let me just say this, I don’t believe there’s going to be a flood of foreclosures that are going to be caused by this. and I would like to explain why. Number one, the mortgage industry is not super interested in killing the United States real estate market, which is what would happen if every single person who missed a payment in April got foreclosed on. So from talking to clients and from talking to other bankruptcy attorneys, it’s my understanding, then in most cases, the mortgage companies are willing to defer up to about four months of payments. Now the problem and challenges at the end of those four months, they want their money back they want all those payments made. So I’m guessing that when we get to that point, after the pandemic is hopefully over or subsided, or maybe the quarantine will be modified to get most people back to work. I believe that the mortgage industry is going to be doing a lot of loan modifications. Again, they there don’t want to kill the entire United States real estate industry, which they would do if they foreclosed on everyone. So I think there’s going to be a lot of loan modifications. But for those people who can’t get a loan modification, the people who are truly in a pickle, Chapter 13 might be a good option for catching up those urges. So, I would like to talk about two different hypothetical here, hypothetical situations here, one where chapter 10 would be a good option and then to give you another illustration of where it would not be a good option. So let’s start with a good one first. Let’s say you have somebody they’ve been out of work because of Corona. Six months goes by mortgage company is not bending the foreclosure process has started, and this person files chapter 13 because now they’re back at work. Now the key is they’re back at work, and so we can take the six month arrearages and we can spread it out, over, you know, up to a five year period. Now, contrast that with a different situation. Let’s say somebody’s six months behind on work, and nobody in the household is working, there’s no source of income. Chapter 13 is not going to work to help save that house. You’ve got to have income in order to be able to pay back those arrears to save it. Now, when is it too late? When is the house gone? And the answer is if in Georgia after is illegally foreclosed. So, I want to talk a little bit about the foreclosure process and how that works. In most cases, a mortgage company is going to send you a certified letter about six weeks before the foreclosure takes place. Under Geo

Corona Virus and Bankruptcy

Transcript: Hello, this is Jeff Kelly and today is March the 4th 2020 and today I would like to talk to you about corona virus and bankruptcy. Now, when you first hear this title, you might be thinking to yourself, what in the world could Corona virus possibly have to do with bankruptcy? How could they be connected in any way, shape or form? And my answer is that our bankruptcy system will be crucial in assisting the citizens of our country in recovering from the economic fallout of the Corona virus. Over the past few weeks we have seen the Dow Industrial drop, about 12% and personally I think it’s going to drop a lot more. I am not a Financial Advisor. I am not giving financial advice to anybody, but I’m just telling it personally, I would not be shocked to see a drop to 16,000 before it’s over. Now, if you go to my personal Facebook page, you will see actually that I did predict the massive drop right before it happened. And I think this Corona virus crisis is probably one of the most predictable that we have seen in our lifetime. And we have seen it coming and medical experts are saying that if you catch it, it can take as long as three weeks to fully recover. So, how’s that going to impact the average American worker? Well, most average people don’t get a lot of paid sick leave from work. So you know what’s going to happen to the average person that’s out of work for three weeks and they recover and they’re feeling good and then their spouse gets it. Or then, if they have children, a child gets it or an extended family gets it. And I think the bottom line is people are going to miss a lot of work and they are talking about shutting down schools, shutting down mass meetings. This is going to affect people; this is going to affect their jobs. And I do believe we are going to recover. We’re going to get through it. This is not the end of the world. The sky’s not falling. But a lot of people are going to miss mortgage payments and a lot of people are going to miss car payments. So what happens when you miss mortgage payments and car payments? Well, typically in Georgia, you miss three mortgage payments and mortgage companies are going to start talking about foreclosing on you. The good news is they can’t do it over night. They’ve got to advertise your house in Georgia, in the newspaper for four consecutive weeks before the foreclosure date. So you do get notice; you do get time. Car payments, they can repossess your car if you’re two months behind and they don’t have to give you notice. They just show up in the middle of the night and grab it. But, the good news is that chapter 13 stops foreclosures and stops the car repossessions. We can pay the arrearages on a mortgage through the plan. We can pay a car through the plan. The other big issue that I think that we’re going to see, the other crisis is going to be medical bills. People that don’t have great

How a cheap divorce can lead to a bankruptcy nightmare.

Transcript: Hello, this is Jeff Kelly. And in this podcast I would like to talk about how getting a cheap divorce can set you up for a possible bankruptcy disaster. Okay, the first way that I often see it and it’s usually in almost every case, the wife that’s left with the children is so desperate to get rid of nasty, horrible husband, that she will agree to anything without a lawyer. She signs the papers and literally gives everything to him. I cannot believe how often I see this situation. Go get an attorney. There are some attorneys who will defend mothers with children and they’ll collect all the attorneys fees from the the ex husband so it’s really tragic sometimes when I you know, I see Women with kids come in and there’s just not enough money to make the mortgage payment not enough money to cover electricity bills. In those situations, you know, honestly, bankruptcy doesn’t help if we’re in a house that you need to stay in and the future mortgage payments are too high. Maybe man, I hate it. And in most cases, it’s almost impossible to go back and undo a bad divorce. It’s much better to get an attorney from the beginning and avoid those rough situations. Another thing that I see that’s often very common is people will, you know, do the no fault divorce, no attorney and one spouse will sign their interest in the house over to the other spouse, and they’ll do it in the form of a quitclaim deed and they’ll date it and they’ll do all the stuff the directions tell them to do but the one thing that They forget or don’t know about is they don’t go and get it recorded in the local courthouse and the deed and the deed records. And that is a potential disaster. And I’ve seen it happen you know, sometimes the divorce order isn’t crystal clear who’s a word of the house. Somebody goes and files chapter seven and chapter seven trustees do what all chapter seven trustee do they search for assets, they do a land search and Ding, ding, ding, ding, ding. They find out that the person who’s in chapter seven has a half interest in a house with a lot of equity. And then, you know, when the other spouse pops up and says, Wait, I’ve got this quitclaim deed sitting right here in my hand. She signed it over to me long ago. Well, hey, you know what, if it’s never recorded, you’re going to have a big fight on your hands with the chapter seven trustee. total disaster and it’s a you know, the quitclaim deeds are a classic case of where being a cheapskate may save you a little bit of money in the short run, but can cost you big time in the long run. Another issue we often see come up in the divorce setting spills over into bank she is cosine lumps. And I it was so common for somebody to come in and meet with me and you know, we’ve got this viable case. But then we’re looking at you know, what is this cosine debt? What, what’s what’s going on here. And people most people who go through divorce think that if the divorce judge orders the other side to pay the cosine debt that relieves them of all civil liabilit

Will Harper Introduction

Transcript: Intro Speaker: It’s time for KellyCanHelp hosted by Jeff Kelly, Attorney at Law with the law office of Jeffrey B. Kelly. And now here’s Jeff Kelly. Jeff Kelly: Okay, people on the radio show today I want to take this opportunity to interview a really awesome attorney. My associate, Will Harper. Mr. Harper, thank you for coming onto the show for this interview. All right, Will Harper: thank you for having me. I know you had to go down the depth chart to get to me. Jeff Kelly: Not true. Not true. Okay. So will you specialize in bankruptcy with me? How many years have you been practicing law? Will Harper: I’ve been practicing law for a total of coming up on six and a half years here, actually. And of the six and a half years about four have been in bankruptcy. Jeff Kelly: Excellent. Excellent. Where did you go to law school? Will Harper: I actually went to law school at the University of the Pacific in Sacramento, California. Jeff Kelly: Now, why in the world did you pick California? Will Harper: Well, I got waitlisted at the University of Georgia ended up not getting in. And I got into Georgia State, but I’m from the countryside and the idea of living in Atlanta for three years. Didn’t seem like a great idea to me. So I applied to other schools around the country. And figured if I got to spend three years somewhere, I might as well be near the redwoods. Jeff Kelly: Now didn’t didn’t they give you an academic scholarship there as well? Will Harper: Yeah, kinda. Yeah. That they. They’ve made it worth my while to go out there. Jeff Kelly: That is impressive. I’m impressed. Yeah. Where’d you go? undergrad? Will Harper: I went to undergrad right here in Rome, Georgia at Berry College. Jeff Kelly: Awesome. Awesome. So when At what point in your life did you realize, hey, I want to be a lawyer. Will Harper: Well, I started out at berry wanted to be a teacher. And I got all the way to the point where I was doing some student teaching or volunteer work at berry Elementary. And I quickly discovered that spending all day with children was a lot different than having your nieces and nephews for an hour or two. my nieces and nephews would misbehave. I can hand them right back to who that was responsible for him and say, No, no, I can’t do that when they’re when they’re there for eight hours. So I got to think and that was a philosophy major that nobody was going to pay me to philosophize. I tried that didn’t work. So I decided when I was 21, I was going to go to law school. Jeff Kelly: Excellent. Excellent. I think I met you right about that time. You were over at seven hills church with Tyler. Will Harper: That was right around that time. Jeff Kelly: Yeah. How about that? That’s been a while ago. Will Harper: I had a I had actually, I had lost a bet and dyed my hair blonde, if you remember. Jeff Kelly: That is funny. Yeah, you know, I think I do remember that. You dyed your hair blonde. So it’s definitely on here now. Will Harper: Yeah. I don’t question it anymore. I’m just

Can I Marry Someone Who Is About To File Bankruptcy?

Transcript: Hello, this is Jeff Kelly bankruptcy attorney. And today I’m going to talk about can you marry someone who is about to file bankruptcy? And the answer is absolutely not. It’s not legal. Just kidding, of course. Just kidding. Just kidding. Relax. I know marriage can be a super scary proposition. You’ve got in-laws on the other side. You’ve got new potentially new brother in law’s and sister-in-laws. And now you’ve got more pressure on Thanksgiving and Christmas, and on and on and on. And then what happens if you also find out oh my gosh, the love of my life is loaded down with tonnes of debt. What should we do? Well, I think the worst thing you can do is to try to talk them out of filing bankruptcy. I think filing for bankruptcy might be the the best thing you can do to help get your marriage off to a nice fresh start, get rid of that stuff if you can. If you wait until after the wedding takes place, then the income of both spouses will count on the bankruptcy means test. So in other words, if you are a high-income earner, you could end up disqualifying your future spouse from being eligible to file bankruptcy if they need to, if you wait until after the wedding. However, if a person has high income, and they need to file bankruptcy, and the person they’re going to marry has no income in that particular case, it might make sense to wait until after the wedding is over. So the person who has no income will be counted as a member of the household in the Means Test. So in a case like this marriage might actually help Someone become eligible to file bankruptcy. Here are some debt issues I think you might want to consider before you get married. For IRS purposes, if you sign a joint tax return after your marriage, you will be held liable for the joint tax debt. It doesn’t matter if if the other spouse is the one who generates all the taxes. If you sign the joint tax return, your assets are at risk. If you have a joint checking account, and you become married, and your spouse gets sued, and they get a judgment against them, a creditor can take that judgment and they can go after your joint checking account. So imagine you know what that’s like you’re you’re married, things are going great and all sudden Wham o the joint checking account gets completely cleaned out by Some random creditor that sued, not good for a marriage, not good, much better to take care of that stuff. But for the wedding. Let’s say you buy a house together. And you know, again, some judgment from the past pops up. The judgment creditor can put a lien on your house, if they got a five a, it’s going to attach to the joint owner. Again, that kind of stuff is not good for marriage. Another thing you might want to consider, you know, before marriage is

Roth Case Lays Out Road Map for Discharge Violations

Transcript: Good Morning! This January 13th, 2020, This is Bankruptcy attorney Jeff Kelly and today I would like to speak with you about how the 11th Circuit has laid out a roadmap for the rules for Discharge Violations. So, I want to start off here talking about the stupidity of banks. What kind of creditor is dumb enough to violate bankruptcy laws and send collection letters to a debtor after a debt has clearly been discharged? In a Chapter 13 bankruptcy, answer? Nation Star Mortgage. In the case of Arlene Roth, she clearly intended to surrender her house under chapter 13 bankruptcy that was filled December 22nd 2010. Roth received a discharge on June 27th 2014. Nation star was notified of the discharged and they received many, many, many letters and they clearly knew about the discharge. About 4 months after entry of discharge, the bank started Roth monthly statements related to her mortgage. Can you imagine the stress of going to 4 years of a bankruptcy case, fighting to make it work, pull it together, you do, you get your discharge and then? You start receiving collection letters. I bet this was extremely stressful on miss Roth. Nation Star never foreclosed on the property during the entire time of her Chapter 13. Who is dumb enough to let a house sit for 4 years and rot? Answer?Nation Star Mortgage. Roth’s attorney contacted Nation Star and was ignored. The statements kept coming. Roth then filed a motion of sanctions in bankruptcy court alleging the statements violated the section 25 24 of the bankruptcy code. She also alleged that there was a civil action that the bank violated the “fair debt collection practices act” and the “Florida consumer collection practices act”. Nation Star made the very smart move and settled the case. After the litigation was resolved, the bank was dumb enough to send an informational statement. The statement contained the due date and instructions on how to pay Nation Star. Roth then filed a 2nd civil suit against Nation Star. Another smart move. Nation star settled again. How can a bank be so dumb to send notices to a debtor in a case they settled for sending notices? Why does this happen? My theory is that bad computer programs run a lot of banks and that there’s no human being making the decision whether to send or not to send. That’s just my guess, I don’t have anything to back this up, it’s just a theory I have but if I’m right, that would make sense why people who have filed bankruptcy keep getting notices. And I suspect, again, that many banks have decided that it’s cheaper to just settle a few cases every now and then, than spend the money that it would take to revamp entire computer systems. So, Roth filed another motion of bankruptcy court seeking sanctions for the 2nd violations but did not succeed on this one. The Court dismissed the motion finding that the statement was not an attempt to collect a debt. The District Court affirmed as did the 11th Circuit. If you would like to read this decision, go to my website Ke

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