Atlanta Bankruptcy Attorney Blog

As Atlanta Bankruptcy Lawyers reported earlier this month, bankruptcies nationwide are dropping, which many people would consider great news and possibly an indication that the economy is improving.

But as unemployment continues to stay high -- higher in Georgia by about 1 percent than the rest of the country -- fewer filings of bankruptcy in Atlanta isn't a good sign at all. What experts believe is that credit card companies and banks have lowered their standards by extending lines of credit to struggling consumers, which is simply going to make their situation worse.

Newly released statistics show that while Chapter 7 bankruptcy filings have dropped during the first seven months of 2011 compared with the same period in 2010, Chapter 13 bankruptcy is actually on the rise. Statistics from the U.S. Bankruptcy Court for the Northern District of Georgia, which includes areas from Atlanta, Newnan and Gainesville in the south, to Rome in the north, show that more people are shifting away from Chapter 7 bankruptcy and toward Chapter 13 bankruptcy.

In 2010, 19,843 people filed Chapter 7 bankruptcy between January and July, down to 17,487 this year. That's about a 12 percent drop. But for Chapter 13 filings, the number has spiked about 10 percent from 11,291 in 2010 to 12,584 this year.

In both forms of bankruptcy, the consumer's debts can be discharged, offering him or her the same kind of freedom that others who finish the process enjoy. In Chapter 7, consumers can get a complete discharge of their debts after the process is complete. Chapter 13 bankruptcy works differently, but with the same result.

In Chapter 13, a person must set up a payment plan, usually over three to five years, with reasonable monthly payments to pay back creditors and lenders. After the payments are completed, all remaining debt is discharged and the person is through with those debts. Typically, Chapter 13 is designed for people who have assets such as a home that they want to try to protect. They are allowed to keep their assets, which is also the case for many people in Chapter 7 bankruptcy as well.

For those who are unemployed and have few prospects of getting a job, they are looking for a lifeline. If a credit card company offers a new line of credit, that's exactly what they seek to help them get by. Sadly, this is just going to push them further into debt while they hold out hope that a new source of income may be coming.

Even if they are fortunate enough to find work, they are now saddled with even more debt that likely outpaces their income. But many people simply rack up credit card bills and are hit with unrealistic interest rates and hidden fees. These are typical tactics by credit card companies to make money off the consumers who keep them in business.

So, it's not surprising that people are seeking ways to get help from these credit card companies. Bankruptcy is one of those ways to help. If you are in such a situation, find out what your options are today.

Continue reading "Chapter 13 Bankruptcy in Atlanta Increases in 2011" »

Typically it's credit card companies that get the bad reputation for hidden fees and making consumers' lives more difficult. And it's for good reason -- they charge ridiculously high interest rates and have hidden fees for things as crazy as customer service. But, in many cases, the banks are not far behind.

Banks may be moving up the rankings to take a solid second place. A recent story by bankrate.com shows that free checking is likely the thing banks will be cutting from their members.

Well, what a shock -- another thing that consumers will be saddled paying for as banks continue to seek profits on the backs of consumers. It's hidden fees like these that squeeze people. Consumer debt -- including real estate debt -- is leaving record numbers to consider bankruptcy in Atlanta.

Atlanta bankruptcy lawyers have seen many consumers overwhelmed by fees and frustrated to the core. For those whose credit score is tanking because they are getting behind on payments and can't keep up, bankruptcy may be a sound option.

This country's bankruptcy laws are designed to protect the consumer. Lawmakers many years ago recognized that consumers may need a way to get out of debt and this set of laws allows them to do just that.

After completing the process, the consumer leaves behind their debt and can start back over, free from the problems that plagued them for years. They then are free to control their finances instead of the financial companies controlling them.

According to the bankrate.com article, the face of checking accounts is changing. A survey of major banks and lending institutions found that the number of free checking accounts continues to drop. Only 45 percent of non-interest checking accounts have no maintenance charges, a 20 percent drop from just last year.

So, now there are more fees for checking accounts, but the fees are higher, too. The average fee jumped from $2.49 to $4.37 in a year, which is $52.44 per year. While that shouldn't break the bank, it's just another fee to punish consumers.

Banks are also considering debit card fees -- which some major banks have already experimented with -- and there are more hurdles to jump in order to avoid fees, such as minimum balance or making sure you sign up for direct deposit.

ATM fees, lower interest rates offered for checking and higher overdraft fees are all making banking less attractive for consumers. Of course, it's making banks plenty of money. But consumers should be sure to check their statements carefully to make sure they're not giving away money to banks.

These fees can pile up and just add another collector to the pile of others for those in heavy debt. While a bank seems like it should be an ally, they can act just like a credit card company looking for money -- with aggression and a no-holds-barred approach.

But bankruptcy clears away debt so that you can better manage your money in the future. This includes being picky about your bank or credit union as to avoid unnecessary fees that make your life more difficult.

Continue reading "Bank Fees & Consumer Debt in Atlanta Bankruptcy Cases" »

You've probably noticed the increase in TV commercials and website advertisements that credit card companies are developing. Typically the pitches include introductory low interest rates and high rewards, rewards, rewards! Well, that's just another credit card company money-making tactic in a huge push to sign up new customers for their death-trap cards and other offerings.

But what the commercials don't say is that the low interest rates apply only to a select few consumers. They also don't mention much about colossal hidden fees that can be charged in certain circumstances. Credit card companies are more likely to print these details in tiny fine print after you're signed up.

It's these fees and chicanery that lead many people to consider bankruptcy in Atlanta and throughout Georgia. When people get stuck making the minimum payment on their credit cards, the companies slam them with fees and make the balance significantly higher. This leads to years of battling credit card companies and trying to pay off what they owe.

That's why Atlanta bankruptcy lawyers would suggest you consider bankruptcy rather than struggle with mounting debt for years. It's better for most people to eliminate their debt through bankruptcy, giving them the opportunity to start anew.

According to Forbes.com, Citigroup sent out nearly 350 million credit card offers in the third quarter, enough for every man, woman and child worldwide to have their own credit card! That is an amazing statistic.

What this shows is that credit card companies are desperate in their attempts to get people to snatch up their credit cards so they can continue making money off them. While some consumers consider credit cards a lifeline or a necessity, the companies consider consumers ripe for the picking. Their fees and interest rates are the only way these companies can survive.

In the third quarter, The Wall Street Journal estimates that Citigroup spent more than $240 million sending out all those credit card offers. And that doesn't include the other marketing expenses, like hiring A-list celebrities for their TV commercials and online ads.

But Forbes says that the credit card companies overall are targeting more wealthy customers because this demographic is less likely to default on their debt.

MasterCard, for one, is trying to entice "high-end" consumers rather than sending out pitches for their card to every consumer. MasterCard's goal is to appeal to residents of certain metropolitan areas, starting with New York City. Its rewards program gives members the opportunity to enjoy perks at trendy local events, priority access to tough-to-reserve seats at swanky restaurants, and behind-the-scenes entry at certain activities.

While this may be a good move for the rich and uber-rich, the common man and woman probably won't be qualifying for these cards. No matter that everyone won't qualify on the high-end side because every credit card company -- MasterCard included -- has a other higher-cost types of cards to entrap the average person.

It's predatory lending practices that lead to the possibility of debt in Atlanta and elsewhere. When high interest rates and fees kick in, consumers are thrust into the position of considering bankruptcy to get out from what the credit card companies have done to them.

Continue reading "Credit Card Companies Desperate For Consumers Who May Be Thrust Into Atlanta Bankruptcy" »

In their infinite wisdom, Georgia lawmakers Sen. Johnny Isakson and Rep. Tom Graves have introduced legislation that would allow homeowners to dip into their retirement accounts penalty free in order to make mortgage payments, The Atlanta Journal-Constitution reports.

I don't know about you, but I don't hear of many people clamoring to ruin their entire future so they can make mortgage payments. What this law will do is ruin the lives of anyone who decides to give away their hard-earned retirement money -- especially with how weak Social Security is -- in lieu of foreclosure.

As everyone knows, Georgia has been hit especially hard by the sub-prime foreclosure crisis. The state ranks in the top five month after month in foreclosures. But this is a short-sighted law that isn't nearly as effective as bankruptcy in Atlanta.

If you file for bankruptcy, after consulting with an experienced Atlanta bankruptcy lawyer, the foreclosure process stops immediately. This means whether you have missed one mortgage payment or six, your house can't be taken away during foreclosure. Filing stops creditors from calling about bills, the banks from sending harassing letters and e-mails, and from the hassle of dealing with wage garnishments.

It is a better alternative than dealing a crushing blow to one's retirement. When people plan for the future, they don't expect to give up their retirement to pay for a home. With housing prices having plummeted during the recent crisis, they aren't nearly the investment many had hoped they would be.

Bankruptcy can rescue consumers from foreclosure and in many cases allow them to remain in their homes both during and after the process is complete. In Chapter 13 bankruptcy in Atlanta, consumers are able to set up a reasonable payment plan over three to five years to pay back a portion of what is owed.

Under the lawmakers' plan, people would be able to pull out 401(k) funds, retirement account money and other locked-in accounts without paying a 10 percent penalty to the IRS if they were using the money to make monthly mortgage payments.

Sadly, while their quotes in the news media show they are proud of their actions, they're missing the point. Would they really tell their friends, maybe people in their 60s who aren't going to find good work anymore, to cash in their retirement accounts to pay for a house that is underwater in its mortgage? Never. But they announce the legislation with quotes that make it seem as if they are doing the country a huge favor.

Isakson said that the nation's economy can bounce back only if the housing market recovers, adding that the legislation will "help strengthen the American housing market" by reducing foreclosures.

Yet, it will leave retirees penniless.

Graves, on the other hand, says the legislation actually does people a favor. For those who have been "responsible enough" to save for retirement and are out of work, the legislation allows them to pull their retirement money to pay for their homes.

I'm sure everyone who's out of work wants to sink all of their savings into a below-market house that may not even recover in value until after they have died.

In bankruptcy, retirement accounts are off-limits from creditors, allowing consumers to keep their retirement and manage payments. In some cases, they can walk away from bankruptcy with other debts cleared so they can use savings or other income to make payments to keep the house, rather than using precious retirement money.

Continue reading "New Law Would Allow Georgians to Use Retirement For Mortgage Payments to Avoid Foreclosure" »

More bad news out of Atlanta, this time from The Atlanta Journal-Constitution -- the newspaper reports that the metro area's unemployment rate went up again in August, from 10.3 to 10.4 percent.

That may not seem like a big jump, but what it shows is that the local economy, like the national economy, isn't getting any better. Layoffs in construction, food services, accommodations, trades, and administration and support staff have left people scrambling for jobs.

Unemployment continues to negatively affect the U.S. economy, and the Great Recession is leaving some people to think about a future with less money or even a complete lack of income. For many consumers, it's a matter of trying to get by, as they are attempting to pay back bills with side jobs, selling assets and taking advantage of other strategies.

But this probably isn't working. They are slipping further and further into debt as interest rates increase, making minimum payments on purchases that result in the merchandise or service being even more expensive, and for some falling behind on mortgage payments. Unfortunately, this situation often leads to foreclosure in Atlanta. But these people should take the time to consult with an experienced Atlanta bankruptcy lawyer who can explain the benefits of bankruptcy and the options consumers have at their disposal.

Bankruptcy laws are some of the only laws that are designed to help protect the consumer. They were enacted in order to give people a second chance after experiencing unforeseeable problems such as job loss, overwhelming medical expenses, predatory lending practices, or poor spending habits. All of these situations could be relieved through bankruptcy.

Mounting debts can be discharged, for instance, and those who own a house can often stay in their homes while the process is ongoing. In many cases, a person can have all of his or her debts relieved, making it possible to move on with life after the process is completed in much better shape than when they filed.

According to the newspaper, Clayton County had the highest jobless rate at 13 percent in August in the area. Clayton County is followed by Fulton County at 11 percent, DeKalb County at 10.8 percent, Cobb County at 9.6 percent and Gwinnett County at 9.3 percent.

In the city of Atlanta, the jobless rate was 11.7 percent, which was up slightly from 11.5 percent in July. Statewide, the jobless rate is 10.2 percent. This is the 49th consecutive month that Georgia has exceeded the national unemployment rate, which stands at 9.1 percent.

Not having a job can be terrifying, and it's obvious that little is being done to bring new companies and new jobs to Georgia. It is painfully apparent that citizens here continue to struggle to find employment opportunities, while residents of some other states may have more choices to find meaningful work.

Many people choose to try to squeak by with minimum payments, while dealing with hounding collection agency workers and harassing bank officials. But there is a better way through bankruptcy, which stops creditors from calling while the process is ongoing. And after debts have been discharged, the consumer can again live his or her life free from the debt that has trapped them for much of the last few years.

Continue reading "Atlanta Bankruptcy an Option as Georgia Jobless Rate Increases" »