Declare bankruptcy

What Happens If You Declare Bankruptcy?

Declaring Bankruptcy in Rome, GA

There are different types of bankruptcy, each with a set of advantages and disadvantages. A Chapter 7 liquidation, for example, is generally ideal for those dealing with credit card bills, medical bills, and personal loans. A Chapter 13 reorganization, on the other hand, is often apt for those with assets that they would want to keep.

In general terms, Chapter 7 bankruptcy is ideal for filers who do not own many properties and whose debts are greater than their annual income. If you are struggling financially primarily due to unsecured debts, such as medical debt and credit card debt, a Chapter 7 filing is likely an ideal bankruptcy option. In contrast, if you want to keep certain property or if most of your debts are non-dischargeable, you are likely better off with a Chapter 13 bankruptcy petition.

Filing bankruptcy is a legal option for people to get out of debt and gain financial freedom once again. It enabled many individuals to have a fresh start in life, letting you have a clean slate in terms of your finances. However, it is essential to seek legal help from a competent Rome bankruptcy lawyer for reliable bankruptcy information and quality legal representation and assistance.

This article is divided into the following sections:

  • Learning how to file a petition for bankruptcy
  • Basics of Chapter 7 bankruptcy proceedings
  • Basics of the Chapter 13 bankruptcy procedure
  • How a bankruptcy case can help you
  • Seeking legal help from a seasoned local attorney

 

Learning how to file a petition for bankruptcy

Declaring bankruptcy is a feasible option for individuals struggling with debt or those overwhelmed with making payments for what they owe. Given its complexity, however, knowledge of bankruptcy laws is necessary before proceeding.

A declaration of bankruptcy will drastically change your financial situation, but various things must be done. If you decide to file for bankruptcy, you must carefully consider specific aspects of relevant state law.

Filing for bankruptcy can provide filers protection from creditors with the ultimate goal of achieving a fresh start. When declaring bankruptcy in Georgia, it is best to seek legal advice from a professional who can explain to you all relevant bankruptcy procedures. 

Bankruptcy attorneys with extensive experience in handling bankruptcy cases can provide quality legal advice on how you can get back on track. We can help you obtain debt relief and have the chance to rebuild your financial future.

 

Basics of Chapter 7 bankruptcy proceedings

A bankruptcy case, regardless of the filing chapter, will involve numerous paperwork and supporting documents. These would include court forms and documentation related to one’s debts, finances. All these must be complete and comply with relevant bankruptcy rules.

If you are planning to file bankruptcy under Chapter 7, you must first meet the following qualifications:

  • Passing the bankruptcy means test, which takes into account monthly income and living expenses, among other things 
  • Not having a recently filed Chapter 7 or Chapter 13 petition in bankruptcy
  • Not having filed a previous bankruptcy petition denied due to non-compliance with a bankruptcy court order or failure to appear in court.

The liquidation bankruptcy procedure will take more or less six months to complete. Below are some of the steps that you must take to have a successful bankruptcy proceeding:

  • A certified nonprofit credit counseling provider will facilitate required counseling sessions.
  • The bankruptcy trustee will evaluate the case, determine eligibility, and confirm if a filer is qualified for Chapter 7 or not. They will also arrange the Meeting of Creditors and manage the transactions between the parties involved.
  • The assigned trustee in bankruptcy filings will liquidate assets and distribute funds accordingly unless it is a ‘no asset’ case.
  • Eligible creditors will often repossess property and assets held as collateral to settle a secured debt. To avoid repossession, one must allocate enough funds to repay owed debts to particular lenders.
  • Before obtaining a bankruptcy discharge, a filer must complete a financial education course from a certified credit counseling organization.
  • The bankruptcy court will give out a court order for discharged debts around three to six months after filing bankruptcy. Here, all qualifying debts are forgiven or wiped out.

 

Basics of a Chapter 13 bankruptcy procedure

Bankrupt individuals who want to file for Chapter 13 bankruptcy must have a steady income to repay their debts. In this type of bankruptcy, you can keep all of your properties and assets, but you must pay back your creditors for non-exempt assets through a debt repayment plan. Such a payment plan will run for three to five years.

Also known as a “wage earner” bankruptcy, this is generally helpful if you are a high-income earner who wants to reorganize your debts. If you are planning to declare bankruptcy under Chapter 13, you would typically go through the following steps:

  • Consult with a credit counselor discuss finances and debt reorganization plans with a local attorney, who shall help you document your eligibility
  • Work with your bankruptcy trustee to be allowed by the court to repay secured and unsecured debts while retaining your assets.
  • Formally submit your bankruptcy petition to be able to benefit from the automatic stay.
  • Submit your proposed payment plan 14 days after filing the petition and work on making payments within 30 days from filing, even before the bankruptcy court has approved it
  • Go through the confirmation hearing and complete the required debtor education course.

If you are facing financial difficulties and mounting debt, seek legal assistance from a professional bankruptcy attorney in Rome, GA.

 

How a bankruptcy case can help you

Being in serious debt is a big problem, and filing for bankruptcy may be the best way to rebuild your financial future. Depending on the specific circumstance of the bankrupt individual, filing for bankruptcy can help stop foreclosure, stop repossession, and stop wage garnishment

It is essential to keep in mind that declaring bankruptcy can harm the credit report of the bankrupt individual. Getting new credit can be pretty tricky, both during and after the entire bankruptcy process. Despite this, however, one would be able to notice a slow but steady recovery in their credit score several months after filing a bankruptcy petition.

 

The Automatic Stay

Most filers seek to benefit from the bankruptcy protection that comes with their case. An automatic stay ensures that creditors will not sue debtors for failure to pay back what they owe. It can also stop creditor harassment and wage garnishment, which is very useful for those struggling with debt. An automatic stay generally takes effect once the relevant bankruptcy court has approved a bankruptcy petition.

 

Discharged Debts

Under the bankruptcy code, unsecured debts generally pertain to obligations without any collateral. These may include credit card bills, medical bills, and personal debts. However, certain types of debt do not involve collateral but are considered non-dischargeable. Typical examples include tax debt, criminal fines and penalties, child support, alimony, and student loan debt.

While not all of your debt problems will be eliminated when you file bankruptcy, it can help you eliminate certain forms of debt and free up a sufficient budget for you to pay back non-dischargeable debts. Trusted Rome bankruptcy lawyers can explain these advantages of a bankruptcy declaration in more detail.

 

Seek legal help from a seasoned bankruptcy attorney in Georgia

We all encounter financial difficulties every once in a while. There are many reasons people struggle with financial debt; it might be because of unemployment, growing medical expenses, credit card debt, or marital issues. 

A bankruptcy filing, regardless of the filing chapter, will stay on your credit report for several years. It will affect your credit score and ability to get credit after bankruptcy. Despite this, filing bankruptcy can help tremendously with debt settlement and make your life less stressful through the automatic stay. All these, however, must be taken seriously. Seemingly simple mistakes could lead to grave consequences.

It is essential to keep in mind that different types of bankruptcy are suited for different filers, depending on their resources, obligations, and short- and long-term goals. A reliable Kansas City bankruptcy lawyer will look closely into your financial problems and guide you as you make a decision.

If you are planning to file bankruptcy or wonder if it is the best course of action to take, you need a lawyer to help you solve your financial problems. If you are struggling with debt and are considering bankruptcy, call our bankruptcy law firm in Rome today. Our credible Georgia bankruptcy attorney at The Law Office of Jeffrey B. Kelly can assess your financial situation and help you decide the best course of action to take. 

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