Marietta Bankruptcy Blog

Over 1 million consumer bankruptcies filed in 2008

For the first time since the bankruptcy laws changed in October of 2005, the number of new consumer bankruptcy cases crossed over the million mark.  A total of 1,074,225 cases were filed last year, compared to 822,590 filed in 2007.  The last time the new filings exceeded 1 million was in 2005, when the numbers actually exceeded 2 million due to the mad rush prior to the changes in the bankruptcy laws on October 17th 2005.  

In Georgia, the total number of consumer bankruptcies for 2008 totaled 59,287, of which 38,374 were filed in the Northern District of Georgia which includes all of Metro Atlanta, Rome, Gainesville and Newnan.   

Brian Limbocker

Limbocker Law Firm, LLC
2470 Windy Hill Road SE Suite 300
Marietta, GA 30067

Phone: 770-933-5355 

http://www.limbockerlawfirm.com/

New "Means Test" figures for any bankruptcy case filed on or after March 15th, 2009.

The U.S. Trustee's office submitted new means test figures for cases filed on or after March 15th of this year.  You can visit the U.S. Trustees website here. The median income for Georgia is as follows:

STATE        1 EARNER        2 PEOPLE        3 PEOPLE        4 PEOPLE*

Georgia        $40,760            $54,054          $61,959            $71,554

* Add $6,900 for each individual in excess of 4.

The old figures for cases filed prior to March 15th looked like this:

STATE        1 EARNER        2 PEOPLE        3 PEOPLE        4 PEOPLE*

Georgia        $39,523          $52,055           $59,668            $68,908

*  Add $6,900 for each individual in excess of 4.

As you can tell, the median income level in Georgia has gone up and thus it becomes a little easier for individuals to file for a chapter 7.  For example, the new figures for a family of four increase the median income by $2,646.  It is kind of surprising that figure of $6,900 for each individual in excess of four was not increased. 

 

House passed the "Cram Down" bill. Bill now moves to the U.S. Senate.

The house passed the mortgage bankruptcy bill by a margin of 234 - 191.  The mortgage bankruptcy bill is now being called the cram down bill in that the bankruptcy judges will be able to lower mortgage payments lengthen mortgages andlower the principal amount owed on certain mortgages.  The bill now moves to the U.S. Senate.  The full article can be found on foxnews.com.

Brian Limbocker

Limbocker Law Firm, LLC
2470 Windy Hill Road SE Suite 300
Marietta, GA 30067

Phone: 770-933-5355 

http://www.limbockerlawfirm.com/

House votes today on the new mortgage bankrutpcy laws

The House is voting today on the new revised plan to allow bankruptcy judges to modify existing mortgages for those in bankruptcy.  It appears that the new laws are only for those in Chapter 13, but it is not certain.  If the proposed law passes, it would make it's way to the senate in a few weeks.  The article can be found on Yahoo News here.   

There has been a lot of opposition to the proposed laws allowing bankruptcy judges to modify a debtor's home mortgage.  It appears, however, that a few things have been agreed upon:

1)  The proposed new laws would be limited only to existing mortgages,

2)  Limited to only those  debtors who sought a loan modification prior to filing their bankruptcy qualify and

3)  Limited to only debtors who can no longer afford their mortgages at the current rate.

On first glance, it appears that those in a chapter 13 prior to the new laws being passed could qualify if they pass the above test.  However, that could be extremely difficult.  The debtor would have to prove to the bankruptcy court that they tried to modify their mortgages prior to filing the bankruptcy and that their mortgage company did not offer them a reasonable loan restructuring deal, consistent to one proposed in President Obama's plan.  Further, the bankruptcy debtor would have to show that they can not afford their mortgage payments.  This could be the trap in that if the bankruptcy debtor is in a chapter 13 and their chapter 13 plan has been confirmed, it would seem as if they couldafford their mortgage, unless the debtor can show that their mortgage is an adjustable mortgage and their payments are about to go up.  Nonetheless, it appears as if the bankruptcy world is about to experience the most significant change since the laws changed back in October of 2005.

Brian Limbocker

Limbocker Law Firm, LLC
2470 Windy Hill Road SE Suite 300
Marietta, GA 30067

Phone: 770-933-5355 

http://www.limbockerlawfirm.com/