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Can I File Bankruptcy in Georgia if I Live Outside the United States

By sblum on May 11, 2009

I was recently contacted by a potential client who wanted to file bankruptcy but lived outside of the United States. He lived and worked overseas, but owned property in Georgia.

The simple answer is YES, he would be eligible to file bankruptcy in the U.S. But the bigger question remains: does he really need to file bankruptcy from a foreign country? It might not be necessary for a debtor to file bankruptcy in the U.S. if he lives abroad and plans to remain overseas. Filing bankruptcy here would protect his assets and income from domestic creditors by discharging the debts. However, a Georgia bankruptcy may or may not protect his assets in the foreign country, depending on that country’s laws.

What if our prospective client does nothing? Often, because of time and cost factors, credit card lenders and other American creditors will not spend the time and money to search for and litigate to go after assets in a foreign country. If one plans to remain overseas and has no assets (such as real estate or bank accounts) doing nothing may make the most sense. [Read more…] about Can I File Bankruptcy in Georgia if I Live Outside the United States

Can a Small Business Owner File Chapter 7 Personally and Still Keep His Business

By Jonathan on April 29, 2009

Over the past few weeks, I have received a number of calls from small business operators who want to file Chapter 7 on credit card debt, but continue to operate their businesses. In many of these cases, the business owner used personal credit cards to fund business operations and now the business is profitable or marginally profitable but for the debt service on tens of thousands of dollars of credit card debt.

Unfortunately the answer I have to give to these prospective clients is not what they want to hear. If you own a small business and are incorporated, the shares of that business are assets. In turn, any accounts receivable for that business are an asset of the business that accrues to the shareholders.

Except in the case of a personal service business that has no inventory or receivables or any value other than the daily efforts of the owner, my experience has been that if you file a Chapter 7, the trustee will demand that you cease operations and turn over the books, the keys and the inventory to the trustee’s office. [Read more…] about Can a Small Business Owner File Chapter 7 Personally and Still Keep His Business

Are You Responsible for Debt Incurred by Your Failed Business

By Jonathan on March 31, 2009

In difficult economic times, I regularly hear from small business owners who have been forced to shut down because of low sales. I recently heard from a blog reader named Evan who writes as follows:

Hello Jonathan!
Of all the info I have found on line yours is the best. I have 2 questions if you don’t mind answering.

I live in CA and have a judgment against me already for 24K for not paying the remainder of a commercial building lease after I went out of business.

1)Will bankruptcy stop them from getting this money?

2) I don’t mind paying them some of the money to be fair. If I paid them 10K and then filed bankruptcy for numerous other bad business debt would the bankruptcy then ask for the 10K back from them?

Here is my response: First of all, thanks for the kind words about my blog. I am glad you found my info helpful.

Secondly, I can only speak to how Georgia law works. California may have different rules. [Read more…] about Are You Responsible for Debt Incurred by Your Failed Business

Associated Press Producer Wants Your Story

By Jonathan on March 25, 2009

This afternoon, I received a call from Johnny Clark, an Associated Press (AP) producer who is looking to interview honest, hardworking men and women who have had to file bankruptcy. He is especially interested in talking to individuals who formerly held high paying jobs but who are now barely scraping by.

Mr. Clark is looking to interview folks for a web based series. He emphasizes that he is not looking for sound bites – instead interviewees will get several minutes to tell their story.

If you are looking for an opportunity to tell your story, or in the alternative to let potential employers know that potential hires are out there looking for work, give Johnny a call. His number is 404-522-8971.

Student Loan Debts – Bankruptcy Won’t Help Much

By Jonathan on March 25, 2009

I have been getting a lot of calls and emails lately about student loan debt. Perhaps with the economy in recession, student loan creditors are becoming more hard line about collecting, and student loan debtors have good reason to be worried.

Federal government involvement in the student loan business means that collection resources not available to regular creditors come into play. There is one statute that permits student loan creditors to garnish wages without the need to first go to court. Student loan claims can also offset tax refunds.

Blog reader Janet describes an all too common scenario as follows:

I am unemployed and have defaulted student loans. I was married last April and my husband’s tax return was offset as a lovely wedding gift. I am researching how to file for bankruptcy for my other debts and [Read more…] about Student Loan Debts – Bankruptcy Won’t Help Much

Can New Wife be Held Liable for Husband’s Debts

By Jonathan on March 23, 2009

When you get married, your accept your spouse “for better or for worse.” Sometimes this means that your new husband or wife enters into your marriage with significant debt. Can you as the spouse ever be held liable for this debt.

The answer to this question is “no.” You cannot be held responsible for another person’s debt unless you voluntarily agree to take on those obligations.

As a practical matter, however, this means that you should avoid opening a joint checking account or buying a large asset jointly. In Georgia, a joint bank account belongs to both parties, each having an undivided half interest. This means that a garnishing creditor can clean out the account.

Similarly, if your new spouse is dealing with tax problems, think twice about filing a joint return. The IRS and Georgia Department of Revenue would love to have two parties to pursue instead of one, and that joint tax refund could be at risk.

Bottom line: if your spouse is carrying significant debt or has tax problems, keep your financial affairs separate.