Chapter 7 Bankruptcy in GA
Chapter 7 bankruptcy can be a very valuable tool for some people. It allows those who qualify to ask the courts to forgive their debt so they gain an important fresh start. Yet, it also comes with some limitations. To determine if you will benefit from filing Chapter 7 bankruptcy in GA, focus first on your financial struggles and how well this type of change can enhance your financial future.
What Happens When Your Debt Is Discharged in Chapter 7 Bankruptcy?
During this process, individuals will present their information to the federal court system. The court works to understand what your situation is - how much debt do you have? They also take into consideration your ability to repay that debt over the next few years. Individuals who pay debts, but may be unable to get caught up or pay off their debt over the next 7 to 10 years may benefit from filing. However, there is much to be done prior to filing. Consider these aspects and how they relate to your needs.
What Do You Own?
In Chapter 7 Bankruptcy in GA, you will need to show the court that your debt burden is too high. The goal is to reclaim all of your assets and then sell those items off. The funds from those excess assets are then used to repay your debtors. In most cases, there are protections in place to limit what you lose.
Georgia exemptions work to protect many of your assets. The state has specific types of property you can maintain and still file Chapter 7. Here is a look at some of the exemptions you may qualify for when filing Georgia bankruptcy.
- A homestead exemption of $21,500 in real estate or personal property, which can be as much as $43,000 if married. If you have that amount of equity in your home, you can keep it as long as you can afford to make the payments on it.
- Other personal property exemptions include up to $500 in jewelry and $5,000 in crops, clothing, appliances, furnishings, and household goods, among others.
- You can keep up to $7,500 in compensation for future earnings needed for support.
- You can keep any health aids you have.
- Any wrongful death recoveries you have been awarded remain protected.
- You can also use up to $10,000 in personal injury recoveries here.
- Your alimony and child support necessary for support can also be protected.
- You can keep up to $1,500 worth of tools of the trade, such as books or implements you need for work tasks.
- You also get up to $10,000 in unused portions of your homestead exemption that can be applied as a wildcard.
When you work with bankruptcy attorney, you gain insight into what your options are in protecting your assets.
What If You Own More Than This?
In some situations, you may need to sell these items of high worth to allow the funds to be applied to your creditors. Another option is to file Chapter 13 bankruptcy instead. This form of bankruptcy protects your assets, but requires you to keep making payments on what you owe for the next three to five years. During that time, your credit may be limited, but your assets remain protected.
What About Your Mortgage Loan or Your Car Loan?
Many people have a mortgage and work hard to pay off that loan each month. If you are making on time payments and are not behind, you may be able to obtain a reaffirmation agreement from your lender and the court. This simply means you are reaffirming the debt so that you are able to continue to remain present on the property, paying the debt. The lender and you must agree to continue the relationship.
If you are behind on your mortgage loan or even your car debt, you will then need to discuss with your attorney what the best step forward is. For some people, it may be possible to roll the loan into the bankruptcy, allowing you to walk away from the debt. This means you would lose the asset. However, think long term. If this the best debt to maintain or do you want a fresh start?
What Are the Disadvantages to Filing Chapter 7 Bankruptcy?
When you have secured debts or credit card debt you cannot pay, you may just want to walk away from it. Yet, there are consequences to filing bankruptcy that can be fairly difficult to overcome. This includes:
- Having a negative public judgement on your credit report for the next 7 to 10 years. This can make borrowing money hard to do.
- If you are facing foreclosure, bankruptcy can stop the process temporarily, but you may still lose your home.
- Your co-signer on your home may become responsible for repaying your debt.
Because a filing like this is so complex, it is always best to work with your attorney to talk about your specific case and how you can benefit. For many, filing is the best step they can take to gain the financial restart they need.
Getting Help Making the Decision to File for Bankruptcy
Making the decision to file for Chapter 7 bankruptcy is never an easy one, but there is help available to you. Your case is unique. When you work with Jeffrey B. Kelly, you gain insight into what the best options are for your needs. Contact the Law Offices of Jeffery B. Kelly today to discuss your needs. Call us now at 770-637-1756 for a consultation.
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