Legal Question in Credit and Debt Law in Georgia

Basically, yes to all your final questions (except they won't force a sale, but wait to grab the equity when you sell, thus perhaps harming any co-owners).

When the creditor gets a judgment against you, it acts as a lien on any land that you own. Provided the land is not owned free and clear and has a deed of trust or mortgage on it, then they probably will not force a sale of your home but will wait until the land is sold and at that time they would be paid any equity from the sale. The first $10,000 in equity is exempt.

However, they are not limited to just land. What about a vehicle? If owned free and clear is it worth more than $3500? If it has a loan on it, they will not take that either unless the loan is so little and the car is worth more than the exemption to make a sale worthwhile.

Things like Social Security, VA benefits, unemployment, a pension/IRA are exempt, provided that you do not mingle these funds with other money. If you get these funds, only put them in a separate account.

The creditor does not really want your clothes and furniture. They are after money. They can and will levy on your bank account if you keep more than $300 in there and do not have any exempt funds (Social Security and the like). The real kicker though is that they can garnish your wages, up to 25% of your disposable pay (which means gross pay minus things like taxes). If you are not employed, then you do not have to worry right now as there is nothing to garnish. However, if you get employed, then it will become a problem. There is a handy little chart at the US Department of Labor which shows how much you canearn and how much they can garnish - http://www.dol.gov/whd/regs/compliance/whdfs30.pdf.

If you cannot afford the bankruptcy, have you considered an alternative? I don't know the size of your debt or what assets you have, but it may make sense just to settle the debt. Settlement can be made now or after judgment. You can enter into a settlement agreement and promise to pay them a set amount per month until the balance is paid in exchange for their promise not to garnish your wages or levy on your bank account whenever you get an income.

If you are relatively young (say under 70) and have over $10,000 in debt it may make sense to file bankruptcy. If this debt is only a few thousand and is your only debt, then it doesn't. If you had the $1500 you could apply it towards this debt.

You will have to decide. Either way, start trying to set aside some funds. When you get at least 50% of the debt saved (the debt will grow as it earns interest at rate of 7% per year) you can try and settle the debt. If you have enough to do the bankruptcy, then it may make sense to go that route.

If you opt for bankruptcy, then contact a competent bankruptcy attorney in your area. There are people who do it themselves, although I would not recommend that unless you are exceptionally savvy. Some people pay a service or a paralegal to type up their forms for them. Other lawyers may do it pro bono (for free) or charge less. You just have to price shop. Cheaper is not always better though and you can't expect Cadillac service at Yugo prices. The filing fees can be waived if you are truly indigent but you have to request permission from the bankruptcy court. Just the filing fees alone are about $300 and that does not count any miscellaneous fees, like for credit counseling (the court now reqeuires it).

The site for the Northern District of Georgia Bankruptcy Court is:

http://www.ganb.uscourts.gov/geninfo/feetable.htm

You can get the forms online there. Again, doing it yourself is not what I would recommend, but this may be the best alternative.

If you want to settle your debt outside of bankruptcy, and are in a position to do so, then feel free to contact me. I can work something out for a reasonable fee.

Rachell Hunter

Attorney at Law

[email protected]

(678)-687-9693

Admitted in GA, PA & NC