April 2010 Archives

The Atlanta Journal-Constitution published an article about Sylvia Moon, a woman in rural McRae who is being sued for a defaulted credit card account she claims she never opened, had a hard finding legal help. That would not be the case in Atlanta, where Georgia bankruptcy lawyers and attorneys of all stripes are plentiful.

McRae, about 165 miles from Atlanta, has seen a large increase in bankruptcies in the wake of the recession but many residents say lawyers are nowhere to be found.

Sylvia Moon eventually connected with Mike Tafelski, an attorney with the Georgia Legal Services Program. She met the lawyer in the reading area of her local library, where he meets with prospective clients for a few minutes each on every third week of the month.

Two percent of all Georgia households filed for bankruptcy between January and November of last year, the Atlanta Journal-Constitution reported on Jan. 1, 2010, giving the state the third-highest personal bankruptcy rate in the country last year. That's 66,925 filings in the first 11 months of 2009, a 22 percent jump from the year before. This jump led to Atlanta falling into third place in filings of personal bankruptcies nationwide.

More than half of those filings were Chapter 7 filings, in which nearly all assets are liquidated. It may be too early to tell if this year is getting better for Georgia families but it's instructive to look through the damage of 2009. 

Atlanta bankruptcy lawyer Richard Thomson, a partner at Clark & Washington, told reporters his firm took on a lot of realtors and contractors as clients in the early months of the economic downturn.

A Wall Street Journal blog entry details the would-be foreclosure of a 5,300-square-foot Atlanta house built for the television show "Extreme Makeover: Home Edition," which is now stuck in Chapter 13 bankruptcy proceedings. This is the second time owners Milton and Patricia Harper avoided foreclosure. The Extreme Makeover couple in Atlanta has hit hard times. 

As a result, the house which is dubbed a "McMansion" by the blog writer, was about to be auctioned off, but now its fate is in limbo.

The Harpers first filed for bankruptcy protection in early 2009, which halted an imminent foreclosure. They recently decided to call their Atlanta bankruptcy lawyer for one more go-around but still are trying to raffle off the massive abode, as covered by an earlier WSJ blog entry.

Georgia's overall unemployment rate stands at 10.6 percent, according to the most recent numbers from the state's Dept. of Labor. And while the official unemployment rate for the greater metropolitan Atlanta area was 10.2 percent in March, there are some bright spots elsewhere in the state (PDF).

ABC News points out that Chapter 7 bankruptcy filings began to soar as the recession put more and more people out of work.  

A recent article in the Atlanta Journal-Constitution reported that jobs are much more plentiful in Hinesville, Augusta, Columbus, Athens and Perry. While moving to another city is no small task and often involves leaving behind friends and neighbors, it may be preferable to meeting with an Atlanta bankruptcy lawyer.

FindLaw admits that it's still a mystery how one's consumer credit score is tabulated, but offers an explanation of the types of factors that credit rating company Fair, Isaac & Co. (FICO) consider. Creditors base their decisions to lend money mainly on the FICO score; adding insult to injury, those with the FICO score that is lower end up paying more in finance charges.

First let's look at the five main considerations in determining how the FICO score is calculated and the approximate percentage of importance for each:

The Atlanta Journal-Constitution reported that commercial bankruptcy filings in the greater metropolitan Atlanta area fell in the fourth quarter of 2009. While that's certainly encouraging news for area businesses and jobseekers, if not Atlanta bankruptcy lawyers, sources cited by reporters warn against popping the champagne corks just yet.

Georgia State University law professor and bankruptcy expert Jack F. Williams, who was quoted in the article, said a dip in bankruptcy does not necessarily correlate to a healthier business climate:

"It takes money to file for bankruptcy protection. [With no money or assets], you ditch the keys and walk away."

While commercial bankruptcy filings have slowed overall, they still are at all-highs; rising more than 51 percent in 2009 over 2008. Atlanta, which was ranked the 15th-highest metro area for business bankruptcy filings in 2008, fell down the list to 19th last year.

Why is it that professional athletes who typically earn millions during their prime, especially high-salaried National Basketball Association players, regularly blow through their wealth not long after retirement? Don't these guys have financial advisors? 

Joining the list is former Detroit Pistons star Rick Mahorn, whom The Detroit News reported filed for Chapter 7 bankruptcy protection. He led his team to a 1989 NBA championship, earning the distinction as one of the league's "baddest bad boys." While the glory days are long gone, perhaps the nickname is still appropriate for his truly bad financial management.

Atlanta Hawks stars Josh Smith and Joe Johnson may want to look at Rick Mahorn's reversal of fortunes as a cautionary tale. The last thing they want to do is share an office with an Atlanta bankruptcy lawyer 10 or 20 years from now.

A New York Times article discusses how the rising tide of consumer debt, much of it which can't in this battered economy, has prompted more creditors to file suit against their debtors. Most people struggling under the crushing weight of debt probably feel as if they can't afford to defend themselves in court.

But by not offering a defense, credit card issuers and other creditors typically receive favorable verdicts and can then more easily secure court orders to garnish the wages of their debtors.  

In other words, inaction as a debtor can lead to a credit card company literally reaching into one's bank account and taking a portion of wages and/or bank assets. The article points out that debtors in a tough spot can often clear most debts by calling a bankruptcy attorney in Atlanta and filing a petition for relief, but changes to the law make the filing fees prohibitively expensive for some.

In an unexpected twist, the nation's rich and famous are beginning to emulate a trend that already has affected hundreds of thousands of ordinary middle-class Americans: Foreclosure. An article by The Wall Street Journal highlights the high-profile foreclosures of such celebrities as Nicolas Cage and Italian film producer Vittorio Cecchi Gori. The foreclosures increase for such wealthy individuals has been noted by media outlets.  

Somehow it's difficult to feel sorry for these folks, especially those who got rich on Wall St. only to lose it all during the crash of 2008. But this latest development in this foreclosures increase and jump in bankruptcies among those we think of as being fabulously wealthy proves that the rich and famous are human after all.

RealtyTrac conducted a study for the Journal suggesting that upscale dwellings with loans of $5 million or more (including some in the Atlanta area) likely will experience a sharp spike in foreclosures throughout 2010.

Anyone who was denied for a loan may get a sense of satisfaction from news that convicted mortgage and bankruptcy fraudster Mark McBride was sentenced to 16 years and two months in prison, as covered by consumer advocacy web site LoanSafe.org. He pleaded guilty to charges of bank, mail, wire and bankruptcy fraud.

US Attorney Sally Quillan Yates prosecuted the case against him:

"The lengthy sentence imposed in this case reflects the damage this defendant did to dozens of banks, including the now-failed Omni National Bank, as well as his abuse of U.S. Bankruptcy courts in three states."

The serial fraud mastermind pleaded guilty to the charges, which he admitted to committing while on supervised release for past crimes related to loan fraud. While banks don't get much sympathy these days, his crimes impacted both banks and individuals.