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Service of Process in Debt Collection Lawsuits in Georgia

Previous articles on this website have the progression of a debt collection lawsuit from judgment to eventually the attachment of liens to real property, bank account seizures, and wage garnishments. Unfortunately, many consumers fail to protect themselves and defend against a lawsuit because of misconceptions about how the lawsuit is delivered.

Georgia law allows for both personal service and substitute service of a lawsuit. The purpose of the service of the lawsuit is so that the defendant can review the allegations, and file the appropriate response.  If a valid answer to the lawsuit is filed within the time set by the court, then it will proceed to the next stage of the litigation process, which would involve discovery, the filing of motions, and eventually a trial on the merits. Unfortunately, if the defendant in a debt collection action does not timely file a response, then a default judgment will …

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HEIGHTENED REVIEW OF INCOME TAX RETURNS IN CONSUMER BANKRUPTCY CASES

Since the Bankruptcy Reform of 2005, additional requirements were imposed upon consumer debtors who filed chapter 7 or Chapter 13 bankruptcy. One of those requirements is that debtors must provide their most recent income tax returns to the bankruptcy trustee, before their meeting of creditors. In the Augusta area, the meeting of creditors is traditionally scheduled between 28-40 days after the bankruptcy case is filed. In addition to providing these returns, the debtors must verify under oath that they are up to date in their income tax filings for all prior years. While the Bankruptcy Code does not require that all income taxes must be paid as a condition of seeking relief, it does require that consumer debtors are up to date in both their state and federal income tax filings.

In the Southern District of Georgia, and specifically in the Augusta area, it is customary for the Chapter

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‘TIS THE SEASON TO BE WARY OF OUTSTANDING JUDGMENTS

Consumers are routinely recommended to check their credit, and not just to evaluate their scores. The information that is listed on your credit report will be the first resource used by a potential lender in evaluating a consumer’s credit. In reviewing their credit reports, some consumers may realize that a judgment has been asserted against them by one of their creditors. However, because of the age of some of the judgments, and the lack of communication since the judgment was obtained, they do not feel the need to take any action.

Under Georgia law, a judgment lien last for seven years. However, it can be renewed for an additional seven years as long as the renewal is filed before the original seven year period lapses. So essentially, a judgment in Georgia will remain collectible for as long as 14 years. Many times, the failure of a judgment creditor to promptly …

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LIFE AFTER BANKRUPTCY: SEPARATING FACT FROM FICTION

Even though they may need relief, many people delay the filing of a personal bankruptcy because they are concerned about the effect it will have on their credit going forward. Unfortunately, they often ignore the damage that has already been done to their credit.  Most of the time, their scores have already been damaged by delinquent debts, collection accounts, or lawsuits. Their credit score may already be so low that they would be unable to obtain any credit, even at the most burdensome of terms. Inevitably, a potential client will inquire about the effect of a bankruptcy on their credit score. This is not because they intend to immediately accumulate credit after filing, but eventually people may have to replace an automobile, or may want to purchase a house. The ability to obtain financing will be essential to these purchases. However, there is a lot of misinformation about the best …

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ARE CREDIT CARD COMPANIES REQUIRED BY LAW TO ACCEPT LESS THAN THE AMOUNT OWED?

Lately in Augusta we’ve been hearing radio ads from different companies that advise consumers that there are laws the credit card companies do not want to disclose, that would require credit card companies to accept less than the full balance of the amount that is owed. These programs are touted as an alternative to a consolidation loan or bankruptcy. Unfortunately, these ads are also exceptionally misleading.

While there are state and federal initiatives in place to assist consumers who are struggling with home mortgages or student loans, there are no such programs in place for credit card debt. There is no requirement that a credit card company must accept anything less than the full amount owed, even if the cardholder can demonstrate financial hardship. While some credit card companies may offer reduced interest/no interest repayment plans while a cardholder is experiencing a temporary financial hardship, they are not obligated or …

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AVOIDING THE PAYDAY LOAN/TITLE PAWN TRAP

Unfortunately, many lower income consumers lack any type of savings or reserve to address an unforeseen expense or temporary reduction in come.  An auto repair of $400 can be an intimidating obstacle to someone who does not have any money set aside, or available credit from a credit card, with which to pay for the repairs.  And without reliable transportation to get to work, the financial burden can quickly escalate.  Payday loans and title pawns are specifically directed to this group of borrowers – those who are desperate and have no other traditional option for managing a sudden expense.

Because of the way the loans are set up, they are not subject to the traditional state restrictions on interest rates, and often will have an APR of between 138-400%. While these loans are marketed as a short term fix for a sudden budget deficit, they often turn into an endless …

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COSIGNERS AND BANKRUPTCY: WHAT YOU AND YOUR BANKRUPTCY ATTORNEY NEED TO KNOW

As part of the bankruptcy consultation process, bankruptcy attorneys will want to review all of your creditor information.  This will include any debts that you may want to keep, such as a house loan or car loan.  A consumer will be required to sign a verification, under oath, that they have identified all of their creditors as part of their bankruptcy filing.  In addition, this information is necessary – even if a consumer does not want to “include” the debt in a bankruptcy – so that the attorney can properly counsel the prospective client regarding their retention options.  Finally, the secured debt needs to be addressed in some manner in the bankruptcy filing, either as designated in the statement of intentions in a Chapter 7 bankruptcy, or in a Chapter 13 plan.

The most common reason for the omission of a debt in a debtor’s bankruptcy schedules is …

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CONSUMER BANKRUPTCY REQUIREMENTS THAT MADE SENSE

Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005.  Many new requirements and restrictions were imposed with the goal of creating uniformity in the evaluation of bankruptcy cases.  While there many requirements enacted that were needless and burdensome, there were also other requirements that made sense have added integrity and fairness to the bankruptcy process.

  • Requiring confirmation of identification – Debtors are required to present government issued proof of their identification and social security number at their first court appearance. Consequently, most attorneys will review this information in advance to make sure that the correct number is listed on the bankruptcy petition, so that an incorrect number does not affect someone else’s credit.  It also prevents someone from posing as someone else, in order to perpetrate fraud or cause harm.
  • Requiring verification of income – the eligibility of a debtor to file a Chapter 7 bankruptcy, or
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TITLE PAWNS AND BANKRUPTCY: NEW CONCERNS FOR DEBTORS TRAPPED IN HIGH INTEREST LOANS

Recently, a Bankruptcy Judge in the Southern District of Georgia has determined that a Debtor in a Chapter 13 bankruptcy  cannot alter the terms of a title pawn transaction through a Chapter 13 repayment plan. A Chapter 13 bankruptcy does allow debtors to modify the terms of secured debts for automobiles and appliances. This can include a reduction in the principal, interest rate and monthly payment. In addition, a Chapter 13 plan can be used to cure the delinquency on a home mortgage. Because a Chapter 13 allows reorganization by changing the terms of secured debts, it is the primary way that delinquent debtors can restructure the payment terms on such debt in order to retain and afford the collateral.

Prior to the recent ruling, a Chapter 13 plan was the ideal way for debtors to pay off a burdensome title pawn loan, with standard interest rates between 130-150%. …

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CONSUMER BANKRUPTCY REQUIREMENTS THAT NEED TO BE ELIMINATED

Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005. Many new requirements and restrictions were imposed with the goal of creating uniformity in the evaluation of bankruptcy cases. It also added many creditor-friendly provisions that are too numerous to go into here. But there are several requirements that need to be eliminated, either because they were poorly considered at the time, or have become ineffectual in the years following:

  1. Pre-bankruptcy credit counseling – This is simply a waste of time and money, which does nothing to deter the filing of bankruptcy cases. All it does is add an additional expense to already overwhelmed consumers, and prolong access to the protection of the bankruptcy courts.
  2. Post-bankruptcy credit counseling – Unlike pre-bankruptcy counseling, the goal of this counseling is more forward-looking. Once again, it is an additional expense, and failure to complete it can result in a bankruptcy case
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