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 good guy. So I guess I might as well tell you.” I looked at him like, “Buddy, I’m your attorney. I’m on your side. You can tell me anything. It’s confidential and you better tell me because I can’t give you legal advice about something that you don’t ask me the question about. So what’s going on?” And he looked at me and he said, “Hey, they can’t take your car, can they?” I said, “Well, it depends. What are we talking about?”
Well, in his specific case, he was talking about a Corvette; a 1964, fully restored Corvette. And the reason he did not want to ask me about it is he was afraid of the answer that he would get. It was a car that he and his dad had worked on for years and restored. His dad had passed away and it was all he really had left of his dad. So can a Chapter 7 trustee take that car? That’s a very compelling story. It’s his last thing he has to remember his dad. Surely they’re not going to take it right? Wrong! All that matters is the value. And that thing was worth like $65,000.
So what did we do in his case? In his situation, there’s no way he could’ve made a Chapter 13 work. We didn’t file the case. I’m not sure how he handled his other debt or what went down. I don’t know if he ended up selling the car and paying some of the debts off. I don’t know, but honesty is a core value of my law firm. We are going to be honest with you. We’re going to shoot straight with you. We’re going to tell you what really will happen in court after we analyze your situation. If you’ve got any questions about how Chapter 7 applies to you, and I want to emphasize this. Don’t hear this podcast and don’t read stuff on the internet and make assumptions about your case.
If you want to know how the law applies to your specific case, take advantage of a free consultation and get free legal advice. It is a no brainer. It is the obvious smart choice. Give us a call – (770) 881-8449 and if you get a chance, check out my website, www.kellycanhelp.com. I’ve written a book on Chapter 13 and Chapter 7, and I would like for you to get a copy of it. So please go to my homepage and scroll down to the very bottom typing your email address and boom! We will get you a copy. If you would rather have a hard copy, give us a call and we’ll try to shoot one out in the mail to you.
Thank you very much for tuning in. Have a great day.
Welcome to the first radio show with Jeff Kelly featuring guest Patrick Matson. Today we debunk the fears surrounding bankruptcy and ensuring that your bankruptcy experience is one that goes smoothly. ...
Hello, this is Jeff Kelly. And in this podcast today, I’m going to talk about what happens to your credit score after bankruptcy. Am I doomed? For many years. What does my future look like? Will I ever be able to buy a new car at a decent interest rate? Will I ever be able to buy that house that I’ve always dreamed of? Is my financial future ruined forever as a bankruptcy attorney who has practiced in this area since 1998? I have heard questions like these hundreds of times. And the answer might shock you. The answer is this. Most people do recover within about two years, one to two years of filing Chapter 7 bankruptcy. How can that possibly be? You may say, well, first of all, usually by the time the clients come meet with me, the damage has already been done. Most potential clients have stopped paying credit cards. Many months ago, had cars repossessed. Been sued by creditors. Had wages garnished or had their house foreclosed. Any of these will put a major hit to your credit rating. For most people considering bankruptcy, like I said, the damage is already there. So the question is, what do we want to do going forward? Do you ever get a knot in your stomach when you think about your credit score? David, just feel sick to your stomach thinking about all that debt and the interest and late fees and just mess that’s hanging over you and it’s not going anywhere. Well, Chapter 7 might help make that pain ...
Hello, this is Jeff Kelly and Today is June the 15th 2020. And today I want to talk about how to protect yourself from theft in a chapter 13 with NDC.org. Every active chapter 13 debtor should open an account with NDC.org, the cost is free, but the information you see could be worth a lot of money and save you from theft. Having an account with NDC.org will allow you to see every single proof of claim that has been filed in your bankruptcy case and it will also allow you to verify that your chapter 13 payments are being received by the trustee. Years ago I had a client whose employer took money from her paycheck, but never sent it into the trustee. We caught the error and had to sue the employer to get the money paid. Having an account with NDC.org allows you to catch stuff like this. Proof of claim is a form signed under oath, with supporting documentation that a creditor must file in a bankruptcy case in order to get paid. The proof of claim will tell the trustee the type of claim and the amount owed. If a creditor fails to file before the deadline in your case, they won’t get paid anything. For example, let’s say you had a car repossessed a few years ago, and owe the car creditor $10,000. If they fail to file a proof of claim on time, you will not have to pay that $10,000. Let’s change up the facts ...