Wednesday, April 30, 2014

Employment and Wage Garnishments.



Will My Employer Learn if I Have a Wage Garnishment?


            In almost every case the answer is “Yes.”  If you work for a large company then only a few people in payroll may really have any actual knowledge.
            Challenging or defeating garnishments can take a few different forms.   If you elect to file bankruptcy, then filing BEFORE the garnishment can keep your employer entirely in the dark.  In order to accomplish this, it is necessary to be a bit proactive:  Come see a lawyer before the garnishment hits you in the paycheck.    One additional fact to keep in mind is that your bankruptcy status, like your race, religion and national origin, is a protected class.  Your employer is not allowed to discriminate or penalize you based on your bankruptcy status.  But this is not true about your credit or garnishment status.  So in many cases, filing a bankruptcy can help you sleep easier than facing a garnishment.  It also usually costs a lot less money.
            Lawyers at The Slomka Law Firm can help people facing garnishments determine their best options.   Call us before the creditors call you again.

Tuesday, April 29, 2014

What Happens if My Cosigner Files For Bankruptcy?



What Happens if your Cosigner Files For Bankruptcy?
            A Bankruptcy discharge (in most cases) will relive the filer from the obligation to pay the underlying debt.    When a co-signer is involved (let’s assume it is a parent), then that co-signer and the filer both must understand the impact.  In short, the answer is easy:    Your bankruptcy has absolutely no impact whatsoever on your non-filing co-signer.    So Mom and Dad are still on the hook.
            In most debts, the co-signers are “jointly and severally liable.”  This simply means that all co-signers are liable to the creditor for the ENTIRE debt. They can then divide amongst themselves who pays what share.   After all, isn’t that why the creditor got Mom and Dad to sign in the first place?  So that they could sue the deeper pockets and not have to worry about having to collect from the less wealthy signers,or signers who might file bankruptcy.
            In Chapter 13, the non-filing co-signer (Mom and Dad) do benefit from a limited co-debtor stay.  As long as you stay in the bankruptcy, then absent court approval the creditor must leave your parents alone as well.     This can be tricky and has exceptions, so please check with an attorney before filing, so they can explain the nuances.   








References: http://www.insb.uscourts.gov/procedure/Filing_Documents_Attorney/Motions_Applications/Relief_from_Stay/Co-Debtor_Stay_1.0.htm

Friday, April 25, 2014

How Do I Stop May 6th Foreclosure?



How Do I Stop Foreclosure?

            Foreclosure is stopped by filing either a Chapter 7 or Chapter 13 Bankruptcy.  At the Slomka Law Firm, we evaluate all options for clients facing foreclosure, and recommend the most effective and appropriate legal options.  In MOST cases, clients who are behind on their mortgages and desire to keep the home should file a Chapter 13 repayment plan.    This plan allows you to stop the foreclosure, move forward with the mortgage (paying monthly of course), and freeze debts you may have (like a car loan) and the fees and costs associated with a Chapter 13 Bankruptcy.
            Chapter 7 Bankruptcy is a better option for clients facing foreclosure who desire to walk away from the home and the debt.  If your home is worth far less than your loan the arrearage with no penalties or interest.   The arrearage is then paid very slowly, over 3-5 years, by paying a monthly plan payment to the trustee.  The trustee will also use these funds to pay other secured
balance, or if you owe many past payments, this option may be worth considering.
            A final word:  Do NOT ignore foreclosure notices merely because you are in loan modification discussions with your lender.   All of the tools at your disposal become meaningless one minute after foreclosure,  Come see us at the Slomka Law Firm and we will give you solid advice at a free initial consultation.

Tuesday, April 22, 2014

IRS Tax Debt and Bankruptcy

IRS Tax Debt and Bankruptcy – Slomka Law Firm Opens a New Door

      In a recent hearing before a Federal Bankruptcy Judge in Atlanta, Attorney Howard Slomka argued and won a small victory on a path that could spell a major change for bankruptcy debtors facing tax debts.   (While the case and argument are a matter of public record, given that the case is still pending and the issue will require future briefs and ruling, I feel it is not responsible to disclose either the Judge or the debtor’s name.)
    Filers under Chapter 11 or Chapter 13 each must submit a reorganization plan.  While the plans allow for some flexibility as far as how much to pay creditors, it has long been accepted law that if the IRS files a priority tax claim, that claim must be paid in full.  Treating the IRS at 100% has defeated many bankruptcies, especially for debtors facing huge tax deficiencies.

     In the current case, a company filed for Chapter 11 protection because it faced a judgment lien and almost $1 Million in IRS debt.  Of this amount over $500,000 was due as a priority debt.   Because the company is small, paying back $500,000, even over a five year period, is not possible.    Based on this economic reality, the United States Trustee filed a Motion to Dismiss the case.
     Mr. Slomka argued to the Judge an obscure argument, that the IRS must consider the pending offer in compromise which might reduce the tax debt by 90%.   If it were accepted, then a Chapter 11 plan would be feasible.  Citing case law from other jurisdictions, and the policy of the bankruptcy code, he stated that when the IRS refuses to negotiate with those in bankruptcy, it both frustrates the purposes and Congressional intent of the law, and it violates the law against bankruptcy discrimination.

      The Judge declined to grant the Trustee’s motion to dismiss, and asked Mr. Slomka to file a motion which would compel the IRS to accept the offer in compromise at a lower number.   While the debtor still has a way to go, a new pathway to bankruptcy discharge is now under review by the judge.  Significantly, the IRS has indicated its acceptance of the theory, so I hope to report a final order in the coming months.

Tuesday, April 15, 2014

How Much Does it Cost to File Bankruptcy?


                                     How Much Does it Cost to File Bankruptcy?

                                                   http://info.legalzoom.com/DM-Resize/photos.demandstudios.com/getty/article/246/193/71080501.jpg?w=600&h=600&keep_ratio=1 
            
            Bankruptcy costs include three basic components:   
                               (i) The filing fee due to the court, 
                               (ii) the costs associated with third party reports and searches, and 
                               (iii) attorneys’ fees.

The first cost, which is the filing fee due to the court is either $306 for a Chapter 7 Case or $281 for a Chapter 13 Case.    These costs are set, but a filing debtor can elect to pay in installments or even to have some or all of it waived in extreme situations.

The second cost includes the bankruptcy classes which you are able to take online. (Click here for an approved list of providers in Georgia).  One class, the debtor pre-filing counseling course, is required before you file, and usually costs around $25.   The other class, the debtor education course, must be taken before you get your bankruptcy discharge. This is usually around the same fee.  

 In addition to these fees, a careful and diligent law firm (like we are at The Slomka Law Firm) will run asset searches and judgment lien searches to make certain that your bankruptcy filing includes all debts and discloses all assets.   These searches also add costs to the process, but are paid by our law firm as part of the fee.   These third party costs also include mailing, postage and service costs for all of the papers we must deliver to all of the creditors and parties associated with your case.

Finally, your attorney is entitled to attorney’s fees for the time to prepare the case, represent you in court, attend hearings, contact creditors and trustees, and to do all other work required to get your discharge.    In most cases the attorneys' fees will run in the neighborhood of $1,000.  At The Slomka Law Firm, we allow the fee to be paid over time and we are open to favorable payment plans.

In most cases, with typical debts and creditors, a client can expect to spend about $1,800.00 (certain costs additional) for the total of all of these costs to get the full bankruptcy discharge.  Some cases are more and some are less, but I invite all clients to come visit so we can fully and openly explain the process and all costs.

References: http://www.slomkalawfirm.com/Chapter-7-Basics/Cost-of-Chapter-7.shtml
http://www.justice.gov/ust/eo/bapcpa/ccde/CC_Files/CC_Approved_Agencies_HTML/cc_georgia/cc_georgia.htm
http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyResources/JCUSinterrimProcedures.aspx

Monday, April 14, 2014

Is Bankruptcy Moral?

                                                    Is Filing Bankruptcy Moral?

                                                           
              At least once a week, a client or prospective client asks me if filing bankruptcy is ethical, fair, or moral.  As a lawyer who helps people file bankruptcy everyday, I could never do this type of work if I felt that it was not moral.  In fact, I believe so firmly in the process, and its protections, that I am pleased to represent creditors in cases when I feel the filing debtor is NOT acting ethically, or is trying to take advantage of the bankruptcy laws.

            First, I would point out the two primary sources for the Bankruptcy Laws. It is not Georgia's State Laws, or Judges, or even Federal Laws that created this process.  Instead, we find Bankruptcy mentioned in the United States Constitution, in order to guarantee that this right, like the other constitutional rights, cannot be taken away by mere laws or aggressive creditors. The Bible itself mandates that debts are forgiven. Whatever your religion's leanings or beliefs, the fact that bankruptcy has been around since biblical times suggests a history and credibility to this process that transcends our current legislators.

            One way I explain the morality of bankruptcy is by pointing out what types of bankruptcies are NOT allowed.  Our Federal Laws define the bankruptcy process carefully and limit certain debts that are not dischargeable in an effort to keep the process fair and moral. 

       The following are not allowed:

  •             Filing bankruptcy too often or repeatedly.
  •             Discharging debts owed to children or to ex-spouses for support or alimony.
  •             Discharging debts created by intentional or illegal acts like drunk driving or fraudulent behavior.
  •             Hiding or concealing assets that should rightfully be liquidated in a bankruptcy.
  •             Charging debts or taking cash advances and then immediately filing a case to erase that debt.
            These controls and limitations, and many others found in the laws, protect bankruptcy for what the Supreme Court calls the “honest but unfortunate debtor”.  In some cases, these controls and limitations would require others debtors to pay back their debts in full.  If you find yourself the unfortunate victim of too much debt, seek out help from an attorney so they can determine if bankruptcy or debt settlement is right for you.   If you find yourself trying to take advantage of the system to escape debts that you either should or can pay back, then perhaps your situation lacks the moral justification of others.

            In most cases, the moral and ethical propriety of a bankruptcy is rooted in the foundation that all people deserve a fresh start at least once when their situation demands it. If you are troubled by the thought of not paying your debts, I remind you that while bankruptcy can excuse your nonpayment, you are always welcome to pay the old debts if and when you are able to do so.  With that in mind, I feel that the honest but unfortunate debtor is also both moral, and ethical.