In this episode of The Georgia Bankruptcy Podcast, we dive into how having high equity in your home can impact your Chapter 13 bankruptcy case. Learn what steps you can take to protect your assets and ensure a smoother bankruptcy process. Whether you're considering filing or already in the midst of it, this episode offers valuable insights and practical advice to help you navigate the complexities of Chapter 13.
Tune in to get informed and stay ahead.
Transcripts
Jeff Kelly: [:
What do you do in a situation where somebody can't afford it? Well, you know, of course, normally when somebody can't afford to pay debt they file chapter seven. But if you have a house and you file chapter 7 with excess equity, a trustee is going to sell that house.
And one important thing that I've tried to always stress to anybody who files a chapter 7 and owns a home. Once you're in, you are in, you cannot quit.
You cannot get out.
and practical advice on how [:
Jeff Kelly: Hello, this is Jeff Kelly. And in today's podcast, I want to talk about equity in people's houses. How does that sabotage chapter potential chapter 13 cases?
So ever since COVID the price of housing in Georgia has just been going through the roof, particularly in Metro Atlanta, particularly in Cherokee County, Georgia, just up and away.
w, I've been practicing since:
And when I say left, I mean, they found completely brand new jobs, brand new life, brand new career, and they haven't come back and they're not going to come back for a long time, probably.
So, for a while now, at least the last five years, there's a shortage of people building houses. There's a shortage of people who know how to build houses correctly and in the right way. And so they're just, they're not going up and then if you combine that with, we've got really high interest rates.
Understandably, a lot of builders who are familiar with history they're just not inclined to go build a 500 house neighborhood because they've got high interest rates on their loans. And what if the market fell like it has done before? They're just not willing to take the risk.
s a consequence, I am seeing [:
And you know, if you don't have debt, then rising equity is great. Your wealth is increasing, but if you've got a tremendous amount of equity, what happens?
So let me, like, work you through a hypothetical and anybody has spoken to me recently. You think I'm talking about your case? I'm not it happens all the time. And so I'm not talking about any one particular person here, but let's just say you've got, let's just use nice clean numbers, a hundred $100,000 of credit card debt, and then, a friend, a family member says, Hey, call Jeff Kelly and maybe you can get rid of it. Maybe you can file chapter 13 or chapter 7 and make this go away.
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're probably talking close to:
What do you do in a situation where somebody can't afford it? Well, you know, of course, normally when somebody can't afford to pay debt they file chapter seven. But if you have a house and you file chapter 7 with excess equity, a trustee is going to sell that house.
And [:
So, let's define this term. In the state of Georgia, it's 43,000 for a couple, 21,500 for an individual. That's not a lot in this market right now, almost everybody coming in to meet with me that owns a house seems to have exposed equity. If we can come up with a chapter 13 plan to pay the debt back, then we'll be okay.
sk, why in the world would I [:
So let's say you have a $100,000 of credit card debt. Well, if you look at late fees and the most common interest rates, I mean, you're talking, 33%, that's $33,000 a year in interest that you could save. So chapter 13 is a great tool for getting rid of debt.
Narrator: Like what you hear so far, make sure you never miss a show by clicking the subscribe button. Now, this podcast is made possible by listeners like you. Thank you for your support. If you're intrigued by the world of bankruptcy and want a comprehensive guide to help you get out of debt, head on over to kelly can help.
t of debt delivered right to [:
Jeff Kelly: But if you're in a situation where you can't make a payment, you know, chapter 13 has rules. Bankruptcy has rules. If there's assets that can get taken to pay creditors that aren't protected by the exemption amounts, it's going to happen.
And so, I hate it, I wish Georgia would raise the exemption amount. There was talk in the last state legislature of raising the amount up to $100,000, which I think is fair. And I really wish that if I had my wish list granted, it would be when they come up with an amount, it should be adjusted every five years, at least with inflation. I mean, as inflation goes up, the exemption should go up with it, but instead it doesn't.
gle year. But if you look at [:
In fact, Texas and Florida, they have an unlimited housing exemption. So sometimes people will call and they'll say, well, I know they can't take your house from you. Well, they can't in Texas and they can't in Florida, but they can in the state of Georgia. So could you just pack it up and go buy a house in Florida and protect all your equity that way?
Well, you got to live there for four years before you're going to be able to claim the exemptions of where you move to. So OJ Simpson did it. And I'm sure there probably are some people who are doing it right now where selling everything, they moved to Florida, moved to Texas. And try to hold the creditors at bay long enough to get the exemption.
n a situation where the debt [:
So option one is you can say creditors come and get me and try to live with being garnished, which I don't advise because if they get to your checking account, which they will, they're going to clean it out completely up, up to the amount of debt owed. And that's just a really hard way to live, it's a bad strategy.
You know, you'll see a lot of commercials about debt consolidation companies, my personal opinion is the vast majority of them, overwhelming majority are crooks and they'll just take your money for about six months and tell the creditors, I can't speak to you.
s a viable a way, and I know [:
But if you've got $200,000 of equity in your house and you don't attack that credit card debt, you know, eventually it will grow to the point where it's going to eat your equity.
How does that happen? Well, they sue you and then they get a ffe and they take the ffe and they record that at your local county courthouse and it attaches to your house, and now it's growing with interest on your house.
ink Georgia should raise the [:
People do need to be able to restructure, people do need to be able to survive. And right now it is really hard in this environment. And I'd like to see it raised to at least a $100,000 for a married couple. And even with that, we would still be below a lot of other popular States in our country.
So, if you have any questions, if you want, you know, an evaluation of your situation, I'm happy to sit down with you and do it and see if we can make it work, you can give us a call at 7 7 0 8 1 8 4 4 9.
I also have a podcast, KellyBankruptcy.com and I've got videos on my YouTube channel in addition to the podcast. I wrote a book on chapter 13 and chapter 7, if you go to KellyCanHelp.com</Welcome, you can type in your email and download it there or if you just want to go on the website and schedule an appointment, you can self schedule.
Thank you so much for tuning [:
Narrator: Thanks for joining us this week on the Bankruptcy Podcast. Make sure to visit our website, kellybankruptcy. com, where you can subscribe to the show in iTunes, Spotify, or via RSS. So you'll never miss a show. While you're at it, if you found value in this show, we'd appreciate a rating on iTunes. Or, if you'd simply tell a friend about the show, that would help us out too.
If you liked this show, you might want to check out our guide to bankruptcy in Georgia. Helping people get out of debt. Available at kellycanhelp. com slash welcome. Be sure to tune in next week for our next episode.
