Tuesday, November 10, 2015

Bankruptcy Relief from IRS and Georgia Tax Debts

Most people are unaware that bankruptcy can be a useful tool in resolving tax debts.   Generally speaking,  if a Georgia or IRS debt for income taxes is over three years old you can obtain a discharge in Chapter 7.   If it is less than three (3) years old, you can consider filing a Chapter 13 bankruptcy or a Chapter 11 bankruptcy and pay this debt over time.

The benefit to this is that interest and penalties stop while you are making payments via a plan, which makes this a better deal than simply working out a payment plan with the IRS or Georgia.    I run into people who have been making payments for years under a payment plan, but the penalties and interest exceed what they are paying.  In other words,  the debtor will owe this money forever.

What if you have failed to file over years because you're afraid of the IRS and Georgia?  I recommend that you go ahead and file your taxes.   When the tax authorities contact you, work out the lowest possible payment plan.   I don't care if it doesn't even cover the interest and penalties.   So long as you are paying, the government is happy.  Make it a priority to pay your current taxes.   After three years of paying on the old taxes, then file your Chapter 7.

Another issue is what if I have failed to pay payroll taxes or sales taxes on my business?  Although the business owes the taxes, the IRS and Georgia will go after the person responsible for these payments.  In one case, a poor lady was hired by some shady businesses to organize and pay their payroll taxes.  The shady businesses failed to give her enough money, and the IRS went after her personally because she wrote the checks!!!  The best advice for this is to shut down the business, and wait for the authorities to chase you.  Typically the IRS and Georgia will accept the basic amount owed without penalties and interest from an individual   Please call if you have any questions.

Please visit my website at tomtierneylaw.com

Please call if you need legal representation to Thomas F. Tierney at (770) 631-1100 or e-mail at tierneylawyer@yahoo.com   Thomas F. Tierney is an attorney who represents clients in south metro Atlanta, including Fayette County, Coweta County, Peachtree City, Tyrone, Fayetteville, and Newnan Georgia.




Monday, November 2, 2015

Do I have to file bankruptcy? What are the alternatives?


There are basically two (2) reasons to file for Chapter 7 Bankruptcy.  The first is to repair your credit.  I know, this seems contradictory.  But if you ever have looked at your credit report you will understand.  Every month there is a list of your debts, showing whether good payments have been made.  If you are simply letting the bad debt sit there, every month your credit is getting worse.

Do not be fooled by a debt being marked "Charged off".  Often this just means that the debt was sold at a discount to some other creditor.   You can still be sued for a "charged off" debt.  The worst is when you have old debt and are waiting for it to fall off your credit.  After years you might still be sued for the debt.   Here is an article about a woman who won a judgment against Midland Funding when Midland failed to show up for Court.   This shows how all this works.  Charged off lawsuit

So the first advantage to filing bankruptcy is that all of  your debt will show "discharged", so you will no longer owe the money.  Imagine if you are a bank and two people request a loan with similar credit history.  One shows debts "charged off" and the other shows discharged in Chapter 7.  Who would you give a loan to?  As the person who filed bankruptcy no longer owes the debts and as this person cannot file another bankruptcy for 8 years, you would more likely provide credit to the bankrupt person.

Bankruptcy provides a fresh start to your credit, and if used correctly can greatly improve your credit.

The other good reason to file bankruptcy is to protect your income and assets.   Once a creditor obtains a judgment against you the creditor can garnish your wages and your bank account.  A bankruptcy will stop the creditor from such actions.

An alternative to bankruptcy can be a simple as saving money to make an offer to the creditor.  If you were to save $500.00 per month in a year you would have $6,000.00 saved.  You may be able to offer a settlement to your creditors, especially on old "charged off debts".  For example, a collection agency may take 50 cents on the dollar, but only on "cash" offers.  So if you have saved $6,000.00 you may be able to settle a $12,000.00 debt.   At that point your credit would reflect paid in settlement, which is better than leaving the debt or filing bankruptcy.


Please visit my website at tomtierneylaw.com

Please call if you need legal representation to Thomas F. Tierney at (770) 631-1100 or e-mail at tierneylawyer@yahoo.com   Thomas F. Tierney is an attorney who represents clients in south metro Atlanta, including Fayette County, Coweta County, Peachtree City, Tyrone, Fayetteville, and Newnan Georgia.


Wednesday, October 28, 2015

What's the difference between a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy?

In a Chapter 7 Bankruptcy you receive a full discharge of your debts usually within three months of filing.  There is no payment plan and your credit will start rebuilding immediately.   Usually there is only one creditor meeting to make sure your paperwork is filed correctly and is accurate.

In Chapter 13 Bankruptcy you repay all or part of your debt based on a budget prepared by your bankruptcy attorney.  There is a trustee whose duty is to make sure the creditors get paid as much as possible under bankruptcy law.  After a creditor meeting, there is a hearing to confirm your plan, and typically the trustee must agree to the plan.   For example, if I owed $100,000.00 in debt and my budget showed I could pay $1,000.00 per month, I would repay approximately $60,000.00 over five years, or 60 percent of the debt.  No interest would accrue on unsecured debt.  You can also pay arrearages on a home and a car in Chapter 13.  You do not get a discharge until the plan is complete.  You cannot enter into debt while in Chapter 13 without Court permission.

I generally recommend filing a Chapter 7 due to the lower costs and quicker discharge of debts.  Chapter 13 is appropriate if you are behind on your home and want time to make up payments.  I never believe it is a good idea to file Chapter 13 to keep a car, as with the attorney fees and trustee fees you could buy a good used car.  Most Chapter 13 plans fail, and the only benefit is to the attorney who gets paid first.

Often people file Chapter 13 because they cannot afford to pay an attorney up front, and respond to ads for low up front payments.  This is a bad idea because in the end you will be paying way more money than if you found a way to file a Chapter 7.  FAQ provide by Bankruptcy Court

Please visit my website at tomtierneylaw.com

Please call if you need legal representation to Thomas F. Tierney at (770) 631-1100 or e-mail at tierneylawyer@yahoo.com   Thomas F. Tierney is an attorney who represents clients in south metro Atlanta, including Fayette County, Coweta County, Peachtree City, Tyrone, Fayetteville, and Newnan Georgia.


Tuesday, October 27, 2015

Will I lose my house in bankruptcy? What about my car? Reaffirmations in Bankruptcy

Many people are afraid to seek bankruptcy relief because they do not want to lose their house or their car.   Often people will want to list their credit card debts in their Petition but not their mortgages or car notes, fearing that if the bank finds out, they will lose their home and car.   Generally, you do not need to fear losing your house and car if you continue to pay these debts after the bankruptcy.

You have a choice when you file bankruptcy to "reaffirm" a debt, which means that you  promise to pay the debt regardless of your bankruptcy filing.  In essence, you make a choice to not obtain a "discharge" from certain debts.   After you file bankruptcy, your bankruptcy attorney may contact your creditor and file out forms to reaffirm a debt.  In my opinion, it is a good idea to do this when there is little money owed, a bad idea if there is a great deal of money owed.

For example, if I own a 2009 Toyota and only owe $3,000.00 on this car, a reaffirmation may be a great idea. A reaffirmation agreement must be approved by the bankruptcy court and show that you can afford the debt.  A reaffirmation agreements helps you re-establish credit after your bankruptcy, however, if you owed a great deal of money on the car, I would not recommend it.  The point of bankruptcy is to get a fresh start, and being stuck is old debt doesn't help.


 Most lenders to do not insist on a reaffirmation agreement, and you can continue make payments on your house and car.  If you do not reaffirm, usually you will not be able to pay online and you will not get credit for good payments nor dinged for late payments.  The good news is that if the car blows a motor, you can stop paying on the car and let the creditor take it back.  I never recommend reaffirming a mortgage, as you never know what might happen in the future.  If you reaffirm a large debt and fail to make payments you can be stuck with the debt, unable to file bankruptcy again for 8 years.

Here is information from the Bankruptcy Court in Newnan Georgia regarding reaffirmation agreements.

Please visit my website at tomtierneylaw.com

Please call if you need legal representation to Thomas F. Tierney at (770) 631-1100 or e-mail at tierneylawyer@yahoo.com   Thomas F. Tierney is an attorney who represents clients in south metro Atlanta, including Fayette County, Coweta County, Peachtree City, Tyrone, Fayetteville, and Newnan Georgia.


I'm in trouble!!! What will happen if I file Bankruptcy?

A bankruptcy can be a wonderful tool to get a fresh start.  Job loss, illness, and yes,  bad financial decisions can leave you and your family in a hole.   The longer you do not fix this problem the worse your credit will get.   You can face garnishment of both your wages and your bank account, leaving you unable to pay your living expenses.

The good news is that a Chapter 7 Bankruptcy can fix this.   After filing bankruptcy all of your credit history will reflect "Discharged in Chapter 7", meaning that your credit will stop being dinged every month.  Usually within several years your credit will rebound to an acceptable range.  You need to use some credit (NOT MUCH!!!) after bankruptcy to re-establish credit.

A bankruptcy filing basically involves the following.   Your bankruptcy attorney will prepare a Petition (like a lawsuit) identifying who you are and what type of bankruptcy you are filing.   A Chapter 7 filing means that you are not going to repay creditors under an plan but seek to eliminate all debt.  For most people this is the best choice.  You must provide a list of all your creditors, including addresses and account numbers.  You may then choose to reaffirm (promise to pay) some debts, such as car loans. The accuracy of the amount you owe is less important than having the correct address.  Your bankruptcy lawyer will provide a list of all your assets, including clothes, bank accounts, and retirement accounts.  A budget will show your  monthly income and your expenses.  Your bankruptcy lawyer will fill out a "means test", which is basically a summary of your last six months income less your expenses. Means Test Information  The means test is designed to stop people who have plenty of income from seeking bankruptcy relief.   The vast majority of people will pass the means test.  You must provide paystubs, tax returns, and attend an online credit management course.

All of this information is filed as a PDF file with the bankruptcy court in Newnan Georgia, if you reside in Fayette County (Fayetteville and Peachtree City) and Coweta County (Newnan).  A trustee, (who is not a judge but an experienced bankruptcy lawyer appointed to review cases) will conduct a meeting to make sure your filing is complete and accurate.  He will look for assets to sell for creditors.   Under bankruptcy law you can keep most of your property, including some equity in your house.  Two months after your meeting you will be discharged from the debts.   Please call if you have any questions.

Please visit my website at tomtierneylaw.com

Please call if you need legal representation to Thomas F. Tierney at (770) 631-1100 or e-mail at tierneylawyer@yahoo.com  Thomas F. Tierney is an attorney who represents clients in south metro Atlanta, including Fayette County, Coweta County, Peachtree City, Tyrone, Fayetteville, and Newnan Georgia.

Thursday, October 15, 2015

How do I pick an attorney?



I recommend that you hire an attorney who practices mostly in your county and who does a large volume of cases.   A good attorney usually has a great deal of experience in front of the judges in his county and can estimate what a judge is likely to do in certain circumstances.  This is useful as you will have an advocate who can advise you of your settlement options, which can lower costs.  You want an attorney who is confident and can present your evidence in an organized way, but is also willing consider reasonable offers.  An attorney should return telephone calls within 24 hours and promptly prepare all paperwork.

You should feel that your attorney is your advocate and cares about you and your situation, but that he also will give you a reality check about your chances in court.  I have been practicing law since 1990 and have been practicing mostly in Coweta and Fayette County since 1993.  Here is a link to the Fayette County Bar Association.

Please visit my website at tomtierneylaw.com

Please call if you need legal representation to Thomas F. Tierney at (770) 631-1100 or e-mail at tierneylawyer@yahoo.com   Thomas F. Tierney is an attorney who represents clients in south metro Atlanta, including Fayette County, Coweta County, Peachtree City, Tyrone, Fayetteville, and Newnan Georgia.

I'm getting a divorce. What's going to happen?



Divorces are filed in the Superior Court of either the county where your spouse lives or where you lived with your spouse in the last six (6) months.

If you and your spouse agree about all issues, including child support and property division,  a lawyer will prepare uncontested paperwork.

This should including:   Divorce Complaint; Agreement; Consent to Try in 31 Days, Acknowledgment of Service, Parenting Plan (if children), Child Support Addendum (if children).  There will also need to be prepared a Report of Divorce which is provided to the State of Georgia.


A Divorce Complaint is a lawsuit laying out the issues.  An Agreement is a contract with your spouse resolving the issues of your divorce.  An Acknowledgment of Service is a proof that the Defendant received the Complaint.  A Consent to Try in 31 Days form allows you to get divorce after 31 days after filing of the paperwork.  A parenting plan provides your agreement on parenting issues and a child support addendum shows how you determined child support.   All of these forms are very complicated and should be prepared by an attorney.

If you don't agree on all issues, typically each side hires an attorney, who requests all pertinent information from the other spouse.    A mediation is held, where a mediator helps the party resolve their differences.  If this does not work, then a Superior Court Judge will rule on these issues on a temporary and permanent basis.  Most Counties require parents to attend a parenting seminar.

A divorce can take as little time as 31 days or may go on for years.  In most cases a contested divorce should be resolved in less than a year.

Please visit my website at tomtierneylaw.com

Please call if you need legal representation to Thomas F. Tierney at (770) 631-1100 or e-mail at tierneylawyer@yahoo.com   Thomas F. Tierney is an attorney who represents clients in south metro Atlanta, including Fayette County, Coweta County, Peachtree City, Tyrone, Fayetteville, and Newnan Georgia.

How do we resolve custody of our children?



Under Georgia law the Court uses a "best interests of the children" standard.   This means the Court does what it deems is best for the children.   There is basically two (2) types of custody issues.  The first is "legal" custody, which regards who makes decisions regarding medical, educational and religious decisions for the children.  Usually the Court grants joint legal custody, which each parent having input and access to records and having the right to talk to teachers and doctors.  If the parents do not agree, then one parent has final decision making responsibility.   Sometimes parents agree that the final decision making responsibility is shared.  In other words, Father might have final decision making responsibility for medical decisions and Mother might have it for education.

Physical custody refers to what home the children primarily reside in.   Usually one parent is the primary physical custodian.  The primary physical custodian  receives child support from the other parent and the child attends school in that parents' district.   Sometimes parents have joint physical custody, which means that each parent has the child for 1/2 of the time.

Attached is a sample Parenting Plan.  You need to prepare a parenting plan for consideration by the Court as part of an uncontested proceeding, or if contested, for the Court's consideration at hearing.

Do not believe that you have to use a cookbook visitation plan.  The Courts encourage both parents to be as involved in their children's lives as possible, and will consider any rational parenting plan which is good for the kids. 

Please visit my website at tomtierneylaw.com

Please call if you need legal representation to Thomas F. Tierney at (770) 631-1100 or e-mail at tierneylawyer@yahoo.com   Thomas F. Tierney is an attorney who represents clients in south metro Atlanta, including Fayette County, Coweta County, Peachtree City, Tyrone, Fayetteville, and Newnan Georgia.

What if my spouse won't agree to a Divorce?


To get a divorce, you must have a "grounds" for divorce.  Grounds simply means a reason for a divorce.   There are 13 grounds for divorce in Georgia, ranging from adultery to abuse.  However, nearly every divorce is granted on the grounds that the marriage is "irretrievably broken".    Basically, if one spouse believes the marriage if over, the marriage is over and the divorce is granted.  Your spouse cannot bully you into staying married and you are not forced to prove that your spouse is a bad person.

Attached is a link to the law regarding grounds for divorce in Georgia.   Georgia Grounds for Divorce

Please visit my website at tomtierneylaw.com

Please call if you need legal representation to Thomas F. Tierney at (770) 631-1100 or e-mail at tierneylawyer@yahoo.com   Thomas F. Tierney is an attorney who represents clients in south metro Atlanta, including Fayette County, Coweta County, Peachtree City, Tyrone, Fayetteville, and Newnan Georgia.

How do I calculate Child Support?

Georgia, like most states, uses a child support calculator which is based on each parents gross income.  Gross income is the full paycheck without deductions for taxes and insurance.   The child support calculator adds together the parents income to determine the family income, then determines what percentage each parent contributes.

For example, if the Husband makes $3,000.00 per month and the wife makes $6,000.00 per month, the family income would be $9,000.00.    Wife would make 2/3rds of the family income and Husband would earn 1/3rd of the family income.  The Georgia legislature determines how much a family should spend on a child based on the family income.   A family that makes $9,000.00 is presumed to spend $1,150.00 per month on one child.   If Wife gets primary custody, then Husband would pay 1/3rd of this amount, or $383.00, per month as child support.  If Husband gets primary custody, then Wife would pay 2/3rds of this amount, or $767.00.

The calculator has a great deal of flexibility based on numerous factors.  It is recommended that you consult a family law practitioner to make sure the child support is accurate.  The most important deviation  used by the Court is for daycare expenses and after school expenses.  In our proposal above, if afterschool costs $80.00 a week, there would be an additional cost of $344.00.  This cost would be split based on the same ratio.  Husband would pay 1/3rd of the daycare in addition to the basic child support, and Wife would pay 2/3rds.

You can access the child support calculator here.  Georgia Child Support Calculator

Please visit my website at tomtierneylaw.com

Please call if you need legal representation to Thomas F. Tierney at (770) 631-1100 or e-mail at tierneylawyer@yahoo.com   Thomas F. Tierney is an attorney who represents clients in south metro Atlanta, including Fayette County, Coweta County, Peachtree City, Tyrone, Fayetteville, and Newnan Georgia.