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Medical Bills & Bankruptcy: What You Need to Know


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Health care costs have been rising exponentially over the course of several years.

Beginning with the introduction of the healthcare marketplace, benefits from employers began to decrease as covering premiums for employees rose impacting the bottom line of many companies.

As a result, you have taken on increased medical expenses even for routine appointments making affording preventative healthcare as well as reactive healthcare back-breaking for your bank account.

You might be considering bankruptcy but don’t know where to start or if this will impact the care you receive from your current providers. The good news is, it is not unheard of to file bankruptcy due to medical bills. About 60% of all bankruptcy claims include medical bills or have such listed on the petition.

What kind of bankruptcy can I file?

At the end of the day, bankruptcy is bankruptcy. There is no special kind you can seek out to discharge this kind or that kind of debt. Something to consider when you move towards filing is that bankruptcy clears all unsecured debt (e.g. credit cards, utility bills, friends and family loans, etc.)

Filing for bankruptcy leaves you little room to haggle over what is shown to the court. When filing, you will be asked to be forthcoming with every debt you own as well as all assets, income, and expenses.

Chapter 7 is what’s known as straight bankruptcy.

 

Bankruptcy does not clear every single debt you have depending on the form. For example, should you owe child support or income tax, these debts will not be forgiven. Other debts, such as student loans, may only be discharged under extraordinary circumstances. Also, if you’d like to maintain property after the bankruptcy is complete, such as your car or home, you will be expected to keep and maintain these debts with regular, on-time payments. While this form of bankruptcy has many appealing attributes, not everyone qualifies for Chapter 7.

Chapter 13 allows you to repay your debts over three to five years. Your payment through the court will be determined by the debts you owe as well as what amount of disposable income you have coming in each month. This means your monthly expenses are taken into consideration when making payments, unlike when you’re paying these debts directly to the creditors. At the end of your payment plan, you could end up paying less than you actually owe and have the remaining debt discharged.

Will I get to keep my doctor?

The answer to this question depends on your physician. Many hospitals and physicians understand why patients file bankruptcy and will continue to see you. At the same time, a physician holds the right to refuse future treatment should you discharge their fees in bankruptcy.

At the end of the day, you have options. You can always find a new physician should yours stop providing treatment due to bankruptcy. While that reality may sting, bankruptcy could be the answer to preserving your future.

 

Georgia Chapter 7 Bankruptcy

Chapter 7 Bankruptcy in the State Of Georgia

Chapter 7 bankruptcy information for Georgia - Attorney Matthew Cherney

Georgia Chapter 7 Bankruptcy attorney

 

In Georgia, a Chapter 7 bankruptcy is legal proceeding asking the courts to discharge your debts. If successful, most unsecured debts will be forgiven, and the debtor gets a “fresh start”.  Once a chapter 7 is completed, the debtor is free of major debt. There are assets that you may be able to keep during and after your bankruptcy. How you structure your bankruptcy can have a major impact on the results that you get.

The State of Georgia has three United States Bankruptcy Court districts

Filing for Chapter 7 Bankruptcy in Ga.

Once you figure out which district you are living in, it is time to file.  There are two ways that you can do this in Georgia, you can file by yourself or you can hire an attorney to file for chapter 7 for you.

How to File for Chapter 7 by Yourself in Georgia

If you are confident in yourself and would like to file for chapter 7 on your own, there are many resources that will help you in the state of Georgia. There are online guides from companies like Upsolve, or you can go to the State of Georgia Bankruptcy  website to find out information on the forms that you need.

Hiring an Attorney to File Chapter 7 Bankruptcy in Georgia

If you are uncomfortable with all of the paperwork and ramifications of improperly filing for chapter 7 by yourself, you can hire an attorney to represent you. Hiring an attorney has a distinct advantage because that is what they do. An attorney will know all of the Georgia bankruptcy laws and can prepare and file all the needed paperwork on your behalf. They are also available to answer any questions throughout and even after your bankruptcy is discharged.

 

Georgia Chapter 7 Bankruptcy Exemptions

The purpose of filing for bankruptcy is to achieve debt relief in order to rebuild a sense of financial security.  In Georgia, exemptions in chapter 7 are very important. It is nearly impossible to do so if everything you own is taken from you during bankruptcy. Many people assume that you must lose everything including things such as your finances, your home, and your car when you file, but this is not true. According to United States Code §522, a person who files for bankruptcy may request certain exemptions, including interest on home loans and vehicles, any life insurance policies that have no yet matured, and other such assets.

It is important to note that some states will allow the person filing to choose between using Federal exemptions or state exemptions. The State of Georgia does not allow you to do this. You must use Georgia state exemptions. There are a few instances that you may be able to use federal non bankruptcy exemptions.

Some of the most common Georgia bankruptcy exemptions are :

  • Homestead
  • Vehicle
  • Wages
  • Personal

What happens to your property?

When you file for a chapter 7, you will most likely have to give up anything that isn’t exempt under Georgia law. The bankruptcy trustee will liquidate any non-exempt assets to pay your creditors.

 

Georgia Chapter 7 Means Test

 what is the Georgia Chapter 7 Means Test

The first step in filing Chapter 7 bankruptcy is to take a means test. Unless there is proof that you cannot afford to repay your debt based on your income and other factors, you cannot file under this chapter. Your income will be measured against the median income of a family living in your state that is comparable in size to your own family.

Median Income for Chapter 7 in Georgia

If your average income from the last 6 months is less than or equal to the median income, you will be considered eligible for Chapter 7.

In cases where your income is too high for Chapter 7, the court will determine how much disposable income you have in order to pay off some or all of your debt in a Chapter 13 plan should you choose to go that route. The court looks at your income and subtracts debt payments, living expenses and any other required payments to see what amount you can feasibly pay off each month.

Once a means test proves that you are eligible and you come up clean in all of the other areas determining eligibility, you must fill out all necessary forms and petition for property exemptions so that you can keep any necessary items, such as furniture or your car. This process is not simple, and a mistake could cause further harm, so make sure that you retain an educated Georgia bankruptcy attorney with years of experience in Chapter 7 laws and procedures. With such legal assistance, discharging your debt could result in the financial freedom that you’ve been dreaming of achieving.

 

Chapter 7 Credit Counseling

If you have taken the means test and it has determined that you are eligible for Chapter 7, the next step before you file is to take a pre filing credit counseling course. These courses are online and your attorney can usually provide you with the information on where it can be taken. After your bankruptcy has been discharged, you will also be required to take another credit counseling course. This is usually done with the same credit counseling agency that you used before you filed for your bankruptcy.

 

Georgia Bankruptcy Laws:

The state of Georgia has laws that will protect debtors from debt collectors, one of the most important is the Automatic stay.

Automatic Stay With Chapter 7

As soon as you file for a chapter 7 bankruptcy in Georgia, an automatic stay is imposed. The Automatic stay prevents creditors from pursuing any collection efforts from that moment forward. This includes taking legal action against you. Although the automatic stay is considered temporary, it will protect the debtor from creditors the whole time until the chapter 7 is discharged. At that point it will be no longer needed because once the Chapter 7 is discharged in Georgia, the debt is gone forever, Creditors can no longer attempt to collect the debts that have been discharged.

 

Chapter 7 Trustee in Georgia

You will be assigned a Georgia Chapter 7 Trustee

Once you have successfully filed for chapter 7, one of the next steps in the process is a court appointed trustee will be assigned to your case.  It is the Trustee’s job to overlook your case and go through all off the paperwork and details to make sure that there is no fraud. The Trustee will also assist in the liquidation of your assets.

It is important that all of your paperwork is  filled out correctly and that you list all of your assets. The trustee just wants to make sure that all assets will be distributed correctly. If the trustee somehow finds out that you are hiding assets, he can ask the court to deny or revoke your discharge.

 

Georgia Bankruptcy – The 341 Meeting

Once a trustee is assigned to your case, a 341 meeting will be scheduled. The purpose of the 341 meeting is to let the Trustee go through the paperwork you have filed. He will ask you questions about your debt and assets. Your attorney will be present with you during this meeting but cannot answer questions on your behalf. Creditors can also attend the meeting but they usually do not. It is mandatory that you appear to answer questions from the trustee about your case.   The questions asked by the trustee are all about the paperwork that you have filed. It is very important that you are honest with all of your answers. If you chose to hire an attorney, they will prepare you with everything that you need to know about what to expect at you 341 creditors meeting.

 

Georgia Chapter 7 Bankruptcy Discharge

 Last step is a Georgia Chapter 7 Bankruptcy discharge

 

A chapter 7 discharge is a permanent order from the court prohibiting creditors from taking any form of collection action on discharged debts. This includes legal action and communications with the debtor, such as telephone calls, letters, and personal contacts. While the debtor already had any temporary collection attempts halted with an automatic stay, the discharge is permanent.

The Courts will give the debtors creditors ample time (about 60 days from the 341 meeting) to file any objections. After that period has elapsed, they will send you a letter stating that your chapter 7 bankruptcy has been discharged.

Convert from chapter 13 to a chapter 7 in Georgia

Many times when a person is in a chapter 13 bankruptcy, they will be unable to keep up with their payment plan. When this happens, it is possible to convert from a chapter 13 to a chapter 7.

Tricks for Filing Chapter 7 in Georgia

There really are no tricks to filing for bankruptcy in the state of Georgia. Ir really has to do with whether you qualify or not. If you are in a situation that you think you may not qualify for chapter 7, you can always speak to your attorney about a chapter 13. By taking the means test, you will be able to see if you qualify for a chapter 7 or a chapter 13.

 

Georgia Chapter 7 Bankruptcy FAQs

How much does it cost to file Chapter 7 in Georgia?

The filing fee to for Chapter 7 bankruptcy protection in the state of Georgia is $335, the fee is set by the court and must be paid whether you have an attorney representing you or you are filing by yourself.

How do you qualify for chapter 7 in Georgia?

In order to qualify for Chapter 7, you must be below the median income level. The median income level is determined based on your household size. You must also take the means test to weigh your debt vs income

What is the maximum income for chapter 7 in Georgia?

The maximum income for chapter 7 in the state of Georgia is all dependant on the household size of the debtor(s)
1. $49,236.00
2 $63,850.00
3 $72,426.00
4 $85,763.00

What is the Chapter 7 means test?

The Chapter 7 means test determines whether an individual qualifies for Chapter 7. It breaks down your debt vs income to see if you qualify to file for chapter 7 bankruptcy relief. If you do not qualify for Chapter 7, the means test establishes what the individual may be required to pay back in Chapter 13.

Can I keep my house if I file for Chapter 7 in Georgia?

Yes, If you are current on the mortgage, you can maintain the monthly payments, and there is no equity in your home, If you are not current on your mortgage, you may want to consider a chapter 13 bankruptcy.

Can I keep my car if I file for Chapter 7 in Georgia?

if you are current on the payments, and you can maintain the monthly payments, yes.

Can I keep my cell phone if I file for Chapter 7 in Georgia?

Yes. There are personal exemptions that you can keep when you file for chapter 7 bankruptcy in Georgia

Can I file Chapter 7 in Georgia without my spouse?

Yes. There is no law that requires that you file jointly with your spouse if you are married.

Will Chapter 7 stop wage garnishment in Georgia?

After you file for chapter 7 bankruptcy protection in the state of Georgia, the bankruptcy laws require that any attempts to collect a debt be stopped. This includes wage garnishments.

Can Chapter 7 stop my Car from being repossessed?

Yes. However, if you are delinquent on the loan, and unable to work out an arrangement with the vehicle lender, you won’t be able to keep the vehicle for long.

Can Chapter 7 stop Foreclosure in Georgia?

Yes, but it will only buy you time. If you are delinquent on the loan, and unable to work out an arrangement with the mortgage lender, you won’t be able to keep the home for long.

What are Chapter 7 exemptions in Georgia?

The exemptions depend on the type of property. Your homestead exemption is 21,500.00. Your vehicle exemption is 5,000.00.

We are Chapter 7 Bankruptcy Attorney’s in Georgia

Cherney Law Firm Can help you file for chapter 7 bankruptcy protection.  We have 3 locations in the Atlanta, Georgia area and serve all of the cities in the Atlanta Metro area.

If you are considering whether a chapter 7 bankruptcy is right for you and you live in the state of Georgia, fell free to contact Cherney Law Firm. We are only a phone call or e-mail away and we can answer any questions that you have.  Cherney Law has handled thousands of bankruptcies in Georgia. We have seen every situation, there is no need to feel shame, we are here to help.

How Much will Chapter 7 cost?

We have Offices in Cobb, Cherokee and Fulton Counties and we offer 100% free consultations. Let us help you relieve the stress that your debt is causing you. Wage garnishment, repossession, foreclosure, credit card debt and judgments are our areas of specialty. We accept payment plans.

 

Bankruptcy During The CARES Act

(Corona Virus Aid, Relief, & Economic Security Act)

Even if you haven’t been tracking the news about COVID19 closely, someone has likely informed you that the government will be releasing an economic stimulus check across the country to help counteract the impact Coronavirus has had on many families and businesses. On March 27, 2020, the CARES act was enacted in an attempt to relieve this economic hardship. This act has the ability to provide relief for small business debtors and individual debtors under both Chapter 7 and Chapter 13 bankruptcy filings. This relief is currently temporary and set to expire March 27, 2020.

What does this mean for my bankruptcy?

The CARES act stimulus check you will be receiving will not be accounted for when determining eligibility for Chapter 7 or Chapter 13 bankruptcy filings and will not be considered as part of a debtor’s disposable income. CARES is also allowing those currently making payments under a Chapter 13 bankruptcy to extend their plans upon request for up to seven years (as opposed to the original three to five) after proving “material financial hardship” as a result of COVID19.

Cherney Law Firm has offices in:

Will I qualify if I haven’t yet filed for bankruptcy?

The new act has “increased the eligibility threshold”, at least for small business owners, which may be at the biggest risk of needing to file bankruptcy as their sales have plummeted during the global pandemic. Many employees of such businesses, now facing unemployment or significantly cut hours, may also be questioning if bankruptcy is right for them as they face mounting financial hardship as a result of COVID19.

While eligibility limitations and current plan extensions are available now, keep in mind when filing that special circumstances are currently set to expire one year after the enactment of the CARES Act.

Current Bankruptcy Claims & Plans

If you are currently in the midst of filing for bankruptcy or are participating in a Chapter 13 plan, there is a good chance you were experiencing financial hardship prior to COVID19. If you’re to maintain property after the completion of a bankruptcy claim, it is expected and anticipated that you will continue to make regular, timely mortgage (or car) payments on these secured loans.  Under the CARES Act, you can now seek a temporary forbearance of mortgage payments for up to six months with the option to request additional forbearance of another six months. There shouldn’t be any debate over whether or not you’re granted the forbearance from your loan servicer if you’re claiming financial hardship due to COVID19. There should also not be any additional interest accrued or fees assessed for this forbearance and your credit rating will not be impacted.

While forbearance may sound ideal right now, you will want to have a plan in place for when your payments come due. Mortgage payments will continue to accrue, even if interest and fees do not. Catching a break for the next six months to one year may put you in additional financial hardship when payments are expected to resume.

Homeowner and Renter Protection Amid COVID-19

should we file for bankruptcy

In the wake of COVID-19, many Americans and Georgians are experiencing income loss and financial insecurity. Changes at the federal, state, county, and city level have been enacted to protect homeowners and renters from eviction and foreclosure.

Additionally, individual taxpayers are eligible for a rebate check to provide a small amount of economic relief.

Homeowners

  1. The CARES Act provides two forms of relief for homeowners: blockage of foreclosure proceeding and the option to request 180 days of forbearance on their mortgage.
  2. Protection from Foreclosure – Section 4022 protects homeowners from being evicted and also prevents lenders from initiating foreclosure procedures for 60 days beginning March 18, 2020.

Payment Deferment

Additionally, Section 4022 states homeowners experiencing financial hardship related to COVID-19 can request forbearance for 180 days. Forbearance is temporary relief offered by a lender to pause or reduce payments. A request for payment deferment can be requested more than once. When forbearance is granted, late fees and penalties are not applied. Forbearance is NOT automatically provided. The homeowner must make a request.

It is important to note that these options only apply to federal mortgages made by the following agencies:

  • Federal Housing Administration
  • Department of Housing and Urban Development
  • Department of Agriculture
  • Department of Veterans Affairs
  • Freddie Mac
  • Fannie Mae

Over 60% of U.S. mortgages are federally-backed. Contact your service provider (the bank you make a payment to) to determine if your mortgage is federally-backed.

Many lenders are offering similar options for mortgages held by private lenders. Some states, (not Georgia as of the writing of the article) have partnered with banks to offer homeowner relief.

Renters

Renters are not automatically protected against eviction during COVID. Section 4023 of the CARES Act offers a 120-day eviction moratorium if the renter/tenant resides in:

  • federally subsidized housing
  • a property with a federally backed mortgage loan

The National Multifamily Housing Council has requested that evictions be suspended for renters that have been financially impacted by COVID-19. A request to avoid rent increases for 90-days was also submitted.

Protection for Georgia Renters

Georgia currently has no official eviction moratoriums in place.

On March 17th, Atlanta Mayor Bottoms issued an executive order pausing residential evictions and filings for 60 days. The order applies to the following agencies:

  • Atlanta Housing Authority
  • Atlanta Beltline Inc.
  • Fulton County / City of Atlanta Land Bank Authority
  • Invest Atlanta
  • Partners for Home
  • City of Atlanta’s Department of Grants and Community Development

The silver lining is that Georgia’s Chief Justice declared a Statewide Judicial Emergency, suspending all but “essential functions” of the courts until April 13th. A private landlord could file an eviction notice, but the majority of courts are not hearing eviction proceedings as part of the suspension. (A county court could deem eviction hearings as “essential”.)

Economic Relief

The recently signed CARES Act provides a rebate for individual (non-businesses) taxpayers.

Individuals with adjusted gross income up to $75,000 may receive $1,200 or $2,400 for married couples filing joint returns with adjusted gross income up to $150,000. An additional rebate of $500 per qualifying child is available.

Independent tax policy nonprofit Tax Foundation offers a CARES Act Rebate Calculator to determine the amount of your economic impact payment.

The Treasury Department and the IRS announced that economic impact payment will begin to be distributed around the 3rd week of April. Amid much confusion and controversy, Treasury Department Secretary Steven T. Mnuchin issued an additional statement to clarify that

“Social Security recipients who are not typically required to file a tax return do not need to take an action, and will receive their payment directly to their bank account.”

The economic impact payment is currently slated to be a one-time occurrence.

Contact an Experienced Bankruptcy Attorney

If are facing a potential foreclosure or eviction or financial hardships, contact an experienced bankruptcy attorney. Filing bankruptcy may allow you to avoid foreclosure while starting fresh.

In order to slow the spread of COVID-19, Cherney Law Firm is currently offering free video-chat consultations.

Please contact us at 770.485.4141 to set up your appointment with Mr. Cherney.

Know the law and your rights.

How to Find and Fix Common Errors on Your Credit Report

If you are having issues with debt and considering a bankruptcy filing, there is something that you can do to ensure that the process goes as smoothly as possible

Having an accurate credit report will be very important when you meet with an attorney and discuss your bankruptcy options. There are times when errors occur on one or all of your credit reports. These errors can lower your credit score and also list creditors that should have been removed. The first step to take is to obtain a free copy of your credit report from each of the 3 major reporting companies (which are Equifax, Experian, and Transunion). Go to www.annualcreditreport.com and request your (free) annual reports. Next, go through your reports very carefully to verify that the information is 100% correct. If it is not, then you can dispute the errors with the credit reporting company AND with the company that is reporting incorrect information.

There are certain credit reporting errors that are seen more often than others

Errors regarding your personal information are common. Make sure that your entire name and current home address and phone number are correct. Look at all your listed accounts to make sure that they all belong to you, not to someone else with a similar name to you. If you have ever been the victim of identity theft, make sure that there are no accounts that were opened due to fraud by this theft.

In regards to each specific account listed on your report, make sure that the balances are current and correct. Also verify that the correct credit limits are listed for credit card accounts. This makes a difference in relation to your credit score.

Account status is the next area to take a look at

There are several items to be aware of here. Make sure each debt is only listed once and that any accounts that have been closed are reported as such. If any of your closed accounts are still reported as open, be sure to dispute this. Also, check to see that if you are an authorized user of an account (and not the account owner), that this is reflected properly on your report. Dispute any error that lists you as the owner of the account if you are not.

Other common account status errors include: accounts incorrectly reported as late or delinquent; incorrect date of last payment; incorrect date opened; incorrect date of first late payment/delinquency (if applicable). One other possible error is an account that appears more than once with different creditors.

If you discover any error on any of your reports, gather any supporting documentation that proves that there is a mistake. Then contact the credit agency or agencies that have misinformation, along with contacting the creditor/bank/company that provided the misinformation. This will ensure that your credit report is fully accurate and go a long way in improving your current and future financial situation.

Tax Season: Bankruptcy and Income Tax Refunds

Tax season is upon us, and many people think about a fresh financial start this time of year

When it comes to filing yearly taxes, it is an opportunity to assess current goals and whether current financial strategies are working efficiently. If you have filed a Chapter 13 case and are having trouble making your current plan payments, you may want to consider a conversion from a Chapter 13 Bankruptcy to a Chapter 7 Bankruptcy.

The main benefit of converting from a Chapter 13 Bankruptcy to a Chapter 7 Bankruptcy is that you will no longer have a monthly trustee payment

You can use your income tax refund to bring any outstanding secured obligations current with the lender (e.g. vehicle, mortgage). You will only have one case filed with the same case number, even if you convert from a Chapter 13 to a Chapter 7. Only one bankruptcy filing will show on your credit, rather than having a dismissed Chapter 13 case and a later filed Chapter 7.

Another major benefit of converting your case from Chapter 13 to Chapter 7 is that you can add any debts incurred after you filed your Chapter 13 case. If you incurred new debt during your Chapter 13 that is making it difficult to make your Chapter 13 payments, then a conversion can help alleviate this problem. Some examples of new debt can include new medical bills, or an unexpected, costly home repair.

In order to convert your case from Chapter 13 to Chapter 7, a notice will need to be filed with the Court

There are certain conditions that need to be met. Your bankruptcy attorney will discuss these with you.

With a Chapter 7, there is no monthly payment plan like there is with a Chapter 13. You will still have the automatic stay in effect during the length of your case. However, the Trustee may sell any non-exempt assets that you have in order to pay your creditors. This is known as liquidation.

Once a Chapter 7 case is finished, you receive a discharge of all debts that were part of your case. This occurs in a much shorter time period than for a Chapter 13 case, since there is no repayment plan. In many instances, converting your case from a Chapter 13 to Chapter 7 may be less costly than filing for a Chapter 13 and then having to file a separate Chapter 7 if your Chapter 13 case was dismissed.

An experienced bankruptcy attorney will assess your case to make sure conversion makes sense for you. There can be major benefits to converting your case from a Chapter 13 to a Chapter 7, but it is critical to understand all the implications.