Facing the complexities of debt can be daunting, especially when considering legal options like Chapter 13 bankruptcy. For residents seeking Chapter 13 bankruptcy in Cartersville, Georgia, understanding who qualifies for this type of bankruptcy is crucial. It is important to note that not everyone qualifies, and the criteria can vary based on income, debt types, and other financial considerations.

Chapter 13 bankruptcy in Georgia is designed for those who have a regular income and can commit to a repayment plan over three to five years. Understanding these requirements can help potential filers in Cartersville assess whether Chapter 13 is the appropriate path for achieving financial stability. By delving into the specifics of eligibility, individuals can make informed decisions about managing their debt and taking steps toward a more secure financial future.

Quick Summary:

• Chapter 13 bankruptcy in Cartersville, Georgia, offers individuals with regular income a structured repayment plan to manage their debts. Unlike Chapter 7 bankruptcy, which involves liquidation of assets, Chapter 13 allows debtors to retain assets like homes and cars, provided they stay current on payments within the court-approved plan. 
• To qualify for Chapter 13 bankruptcy in Georgia, individuals must meet several criteria. These include not being a business entity, adhering to specific time limits if previously filed for bankruptcy, completing mandatory credit counseling, filing tax returns for the last four years, and demonstrating sufficient income to cover expenses and repay debts. The process aims to provide a structured path for debt repayment while offering protection against foreclosure and other creditor actions.
• Chapter 13 bankruptcy offers unique benefits such as stopping foreclosure, lowering secured loan rates, and allowing overdue child support repayment. It manages debt without extra charges, protecting homes and vehicles. Bankruptcy attorneys offer crucial guidance for navigating Chapter 13 and exploring other tailored debt relief options.

Chapter 13 Bankruptcy: A Repayment Plan for Debt Relief

Chapter 13 bankruptcy is a legal process that allows individuals with regular income to create a court-approved repayment plan for their debts. This plan typically lasts for three to five years, during which you make monthly payments to a court-appointed trustee who then distributes the funds to your creditors.

Think of it as a structured way to catch up on your debts and get a fresh financial start. Unlike Chapter 7 bankruptcy, which eliminates some unsecured debts entirely, Chapter 13 focuses on repayment, allowing you to keep valuable assets like your car or house as long as you stay current on your secured debts (mortgages, car loans) within the plan.

In contrast, Chapter 7 bankruptcy is a liquidation process where some of your assets may be sold to pay back creditors. However, Chapter 7 often has stricter income limitations and can leave a lasting mark on your credit score.

How Do I Qualify for Chapter 13 Bankruptcy in Georgia? 

While Chapter 13 offers a path to financial recovery, there are specific requirements you need to meet to be eligible. Here’s a breakdown of the key factors to qualify for Chapter 13 in Georgia:

You Are Not a Business

Any individual and sole proprietors with regular income can file for Chapter 13 bankruptcy. If you own a business by yourself or with a partner, you can file for Chapter 13 in your own name for debts you’re personally responsible for. But stockbrokers and commodity brokers can’t file for Chapter 13.

Companies like corporations and LLCs cannot file for Chapter 13 and must use Chapter 11 instead.

Previous Bankruptcy Rules

You can file for Chapter 13 even if you’ve had a bankruptcy before, but there are time limits. If you got a Chapter 13 discharge in the last 2 years or a Chapter 7 discharge in the last 4 years, you must wait before you can get a Chapter 13 discharge again.

Recent Bankruptcy Case Dismissals

You can’t file for Chapter 13 or Chapter 7 if your previous bankruptcy case was dismissed in the last 180 days because you didn’t follow court orders, didn’t show up in court, or asked for the case to be dismissed after a creditor tried to lift an automatic stay.

Credit Counseling

You need to get credit counseling from an approved agency within 180 days before filing for Chapter 13. You must show the court a certificate proving you did this. If the agency made a debt management plan, you need to give a copy to the court too.

Debt Limits

Understanding Chapter 13 debt limits Georgia is crucial. To qualify for Chapter 13, your total debts, including both secured debts (like a mortgage) and unsecured debts (like credit card bills), must be less than $2,750,000 when you file for bankruptcy  (11 U.S.C. § 109(e)). 

Tax Returns

You must have filed your state and federal tax returns for the last four years before you can file for Chapter 13. You need to give a copy of your latest federal tax return to the trustee at least 7 days before your first meeting with creditors.

Repayment Plan

You need to have a plan to repay certain debts in full. This includes priority debts like child support and some taxes, and secured debts like a mortgage that must be kept current during the plan.

Repay Unsecured Creditors

You must pay back nonpriority, unsecured creditors (like credit card companies) at least the amount equal to your nonexempt property over the repayment plan. Nonexempt property includes things like household items and some equity in your home or car.

Enough Income to Pay Debts

You must have enough income to cover your expenses, required payments to priority and secured creditors, and payments to unsecured creditors. Your income can include your spouse’s income, wages, self-employment earnings, Social Security benefits, and unemployment benefits. You also need to pay the trustee a commission based on your total payments.

What Are the Benefits of Chapter 13 Bankruptcy? 

Choosing Chapter 13 bankruptcy can help you in ways that other debt relief options can’t. Here are some of the benefits:

• You don’t have to pay interest on credit card and finance company debt.
• You won’t get interest or penalties on tax debt.
• It can stop you from losing your home to foreclosure.
• It might get rid of a second mortgage.
• It lowers interest rates on loans backed by collateral.
• It reduces the amount you owe on secured loans to the value of the collateral.
• You can pay back overdue child support.

Finding Relief Through Chapter 13 Bankruptcy in Cartersville, Georgia

Drowning in debt can feel overwhelming, leaving you unsure of where to turn. If you’re struggling to manage your finances, Chapter 13 bankruptcy in Cartersville, Georgia may be a solution you haven’t considered. 

However, dealing with the legalities of Chapter 13 bankruptcy can be complex. The Law Office of Jeffrey B. Kelly understands the financial challenges you face. Our Cartersville bankruptcy attorneys can help you determine if you qualify and guide you through every step of the process.

We understand that debt can impact more than just your finances; it can take a toll on your mental and emotional well-being.  We offer compassionate and personalized legal representation, working tirelessly to achieve the best possible outcome for your situation.

Don’t wait any longer to take control of your financial future. Contact the Law Office of Jeffrey B. Kelly today for a free consultation. We can also explore other debt relief options, including Chapter 7 bankruptcy, student loan debt solutions and foreclosure defense. Let us help you find the path to financial freedom.

Does juggling multiple credit card bills and high-interest loans leave you feeling overwhelmed? Debt consolidation in Cartersville, GA might be your lifesaver. It streamlines your payments and lowers your interest rates, giving you back control.

Debt consolidation can be a powerful tool for managing debt and achieving financial stability. However, navigating the process and making informed decisions require careful consideration.

Quick Summary:

• Debt consolidation combines multiple debts into a single loan. This method lowers interest rate, simplifies payments and potentially saves money.
• Different options are available when managing debt consolidation. These options include personal loans, balance transfer credit cards, and home equity loans.
• Debt consolidation offers benefits through simplified management, lowered interest rates, and improved credits scores.
• Consolidating debt is done through: evaluating your debt situation, exploring consolidation options, comparing offers, applying for a loan or credit card, paying off existing debt, and focusing on repayment.
• A few alternatives to debt consolidation include bankruptcy, a debt management plan, and debt negotiation.

What is Debt Consolidation?

Debt consolidation is a financial strategy that combines multiple debts into a single loan with a lower interest rate. This method involves high-interest credit cards or personal loans. Debt consolidation simplifies managing your debt and saves you money in the long run.

Imagine juggling multiple credit card bills with varying due dates and interest rates. Debt consolidation allows you to replace those individual debts with one, larger loan, with a lower interest rate. This makes repayments easier.

What are the Different Types of Debt Consolidation?

Debt consolidation offers flexibility to fit various financial situations. It can be a powerful tool to simplify your finances and potentially save money on interest. Here are some common consolidation options, each with its own advantages and considerations:

Personal Loan

A personal loan from a bank or credit union can be used to pay off existing debts. Qualification for a personal loan depends on your:

• Credit score
• Income
• Debt-to-income ratio (the amount of debt you owe compared to your income)

A good credit score can qualify you for a lower interest rate on the loan. This potentially helps you save money over the long run. However, keep in mind that personal loan interest rates can vary depending on the lender.

Balance Transfer Credit Card

Certain credit cards offer a 0% introductory APR (Annual Percentage Rate) on balance transfers for a limited period. You can transfer your existing credit card balances to this new card. The advantage of the lower interest rate helps pay down your debt faster.

However, be mindful of any balance transfer fees and the higher interest rate that kicks in after the introductory period ends. Additionally, the interest rate on the transferred balance will typically jump significantly after the introductory period ends. It’s important to have a plan to repay the balance before the introductory period ends.

Home Equity Loan or Line of Credit (HELOC)

If you own a home with sufficient equity, you might be able to leverage it for a home equity loan or line of credit. These offer lower interest rates than personal loans. However, they also come with the risk of foreclosure if you default on the loan.

HELOCs also function differently from traditional loans. They offer a revolving line of credit, similar to a credit card. This line of credit can be accessed over a draw period.

What are the Benefits of Debt Consolidation?

Debt consolidation can be an advantage for those overwhelmed with multiple debts. It can offer several advantages for those struggling with their debts. Its key benefits can include:

Simplified Management

Debt consolidation replaces multiple credit plans with a single monthly payment. It manages the hassle of tracking payment across credit cards, loans, or medical bills.

Instead, you’ll have a single, consolidated monthly payment. This simplifies budgeting and reduces the risk of missing due dates or incurring late fees. 

Potentially Lower Interest Rates

Debt consolidation can significantly reduce your interest payments. It allows you to combine high-interest debts into a single loan with a lower interest rate. High-interest debts include credit cards with rates above 15%. Meanwhile, single loans can be personal or home equity loans at 5% interest. This can help you save a large amount of money over the long term.

Debt consolidation directs more money towards paying the principal amount of your debt. This allows you to speed up your debt payoff and become debt-free much faster.

Improved Credit Score

Having an improved credit score opens up better opportunities in managing debt. Debt consolidation can have a positive impact on your credit score in two ways:

1. Simplifying your debt and ensuring on-time payments on your consolidated loan. Doing this shows responsible credit management to lenders. A consistent track record of fulfilling your financial obligations is a positive factor. Credit bureaus consider this when calculating your credit score.
2. Debt consolidation can help lower your credit utilization ratio. This ratio is the amount of credit you’re using compared to your total credit limit. Ideally, you want your credit utilization ratio to be below 30%. Consolidating your debts and reducing your credit limit can improve this ratio. This gives your credit score an extra boost.

How can I Consolidate My Debt?

Debt consolidation can be a strategic tool to simplify your finances. It can also potentially save money on interest. However, navigating the process requires careful planning and execution. The relevant steps you can take for consolidating your debt include:

Evaluate Your Debt Situation

The first step is to get a clear picture of your current financial standing. You can compile a list of all your debts, including:

• Outstanding balances,
• Interest rates,
• And minimum monthly payments.

Utilize tools like budgeting apps or spreadsheets to create a comprehensive overview. This information shows the total amount of debt you owe and your financial burden. You can categorize your debts by type or by interest rate. This helps identify areas that would benefit most from consolidation.

Explore Consolidation Options

Once you have an idea of your debt, you can choose to research debt consolidation options. The most common options can include:

• Personal Loans: These are unsecured loans offered by banks, credit unions, or online lenders. Their approval hinges on your creditworthiness. The interest rates can vary depending on your credit score and loan terms.
• Balance Transfer Credit Cards: These cards offer a 0% introductory Annual Percentage Rate (APR) on transferred balances. These balances are only for a limited time of 12-18 months. This allows you to merge your existing debt, and pay it down faster during the promotional period.
• Home Equity Loan or Line of Credit (HELOC): Homeowners with sufficient equity in their property have this option. HELOCs and home equity loans offer lower interest rates. This is considering your home as collateral. However, this comes with the risk of foreclosure if you default on the loan.

Compare Offers & Choose the Best Option

With potential consolidation options, it’s important to compare offers from different lenders. The specific criteria you should check include:

• Interest Rates: The goal is to secure the lowest possible interest rate. This maximizes your savings on interest charges in the long run.
• Loan Terms: Pay attention to the repayment term if you aim to settle the debt early.
• Fees: Some lenders charge origination fees, balance transfer fees, or annual fees. Factor these fees into your overall comparison to determine the most cost-effective option.
• Eligibility Requirements: You should meet the eligibility criteria for the loan or credit card.

Apply for a Consolidation Loan or Credit Card

Once you’ve chosen the best option, you have to gather the necessary documents. This can include:

• Proof of income (pay stubs or tax returns)
• Employment verification
• Credit reports

Pay Off Existing Debts

The approval of your consolidation loan or credit card should be prioritized. You use the funds from this to pay off your existing debts directly. You should have confirmation or documentation from each creditor that your accounts have been paid in full. This will prevent any confusion or lingering debt on the old accounts.

Focus on Repayment

Debt consolidation doesn’t eliminate your debt. What consolidation does is simplify repayment. Different methods you can do to help refocus on repayment include:

• Setting a clear budget that offers funds for your consolidation loan or credit card payment.
• Prioritizing full payments on time to avoid accumulating interest charges and late fees.
• Exploring ways to potentially increase your income
• Cutting back on expenses to free up more money and accelerate your payoff timeline.
• Remaining committed to your repayment plan helps you achieve your financial goals.

Are There Any Alternatives to Debt Consolidation?

Debt consolidation isn’t a one-size-fits-all solution. Depending on the severity of your debt situation, other options might be more suitable. Here are a few alternatives to consider:

Debt Management Plan (DMP)

Through a non-profit credit counseling agency, you can develop a DMP to repay your debts in a set timeframe. This can help negotiate lower interest rates from creditors.

This option involves consolidating your minimum payments into a single monthly payment to the credit counseling agency. They then distribute the funds to your creditors.

It can be a good choice for those struggling with high minimum payments. This also benefits from guidance on budgeting and managing debt.

Debt Negotiation

An attorney skilled in debt negotiation can work with your creditors to try and reduce your outstanding debt balances. This can be a viable option for those with significant credit card debt. However, it’s important to understand that success is not guaranteed, and it might negatively impact your credit score.

Bankruptcy

Bankruptcy under the United States Bankruptcy Code (title 11, United States Code) and the Federal Rules of Bankruptcy Procedure is a legal process that can offer a fresh start for individuals overwhelmed by debt. There are different chapters of bankruptcy, each with its eligibility requirements and consequences.

Consulting with an attorney is important before considering bankruptcy as it can have a significant long-term impact on your credit score and financial future.

Work With Our Georgia Debt Relief Lawyers Today!

Debt consolidation in Cartersville, GA can be a powerful tool for managing debt and achieving financial stability. However, navigating the process and making informed decisions require careful consideration.

The Law Office of Jeffrey B. Kelly in Cartersville, GA, is committed to helping you understand your debt consolidation options. Our debt relief lawyers can help choose the path that best suits your financial circumstances.

With extensive knowledge in consumer debt law, our lawyers can guide you through the process. We ensure your rights are protected and your financial future is secure. Give us a call today and get a free consultation!

Many individuals in Rome, GA, can find themselves in financial turmoil. They struggle to make ends meet while creditors take a part of their hard-earned wages. There are many ways to stop wage garnishment, and exploring bankruptcy might be an option for you.

Quick Summary:

• Wage garnishment is a legal procedure where a court order directs your employer to keep a specific amount from your paycheck to repay a debt.
• Federal law, including the Consumer Credit Protection Act (CCPA), limits the amount of wages that can be garnished. Some states, like Georgia, have more protections for debtors facing wage garnishment.
• Filing for bankruptcy can stop wage garnishment through an automatic stay. That provides immediate relief to debtors.
• Chapter 7 and Chapter 13 bankruptcy are two main options for individuals. Each of them has its implications for wage garnishment and debt relief.
• While the automatic stay typically stops most wage garnishments, exceptions exist for certain types of debts. Examples are child support, tax obligations, government debts, and student loans.

What is Wage Garnishment?

Wage garnishment is a legal procedure where a court order directs your employer to withhold a specific amount from your paycheck. This amount is sent directly to a creditor to whom you owe money. That happens after a creditor has already obtained a judgment against you for the unpaid debt through the court system.

There are various reasons why a wage garnishment might be issued. Common examples include:

• Unpaid credit card debt
• Medical bills
• Past-due rent
• Child support or alimony payments
• Student loans (in some cases)

Federal law limits the amount of your wages that can be garnished for most debts.

• Consumer Credit Protection Act (CCPA) Protection: This act protects a part of your income from garnishment.
• Garnishment Amount: The amount withheld is limited to the lesser of two figures:
• 25% of your disposable income: That is your gross pay minus mandatory deductions like taxes and social security.
• Amount exceeding 30 times the federal minimum wage: This amount is currently $217.50 (based on a $7.25 minimum wage).

Disposable earnings are defined as the wages left after legally required deductions, such as taxes and Social Security, have been made.

In Georgia, there are practices that debt collection agencies are not allowed to do. That includes garnishing your wages or taking your home or possessions without a court judgment. There is, however, an exception for federally guaranteed student loans that are in default.

What is Exempt from Garnishment in Georgia?

While most wages and bank accounts are vulnerable to garnishment for unpaid debts, certain types of funds receive federal protection. Here’s a breakdown of some exempt income sources:

Social Security, Disability, and Retirement Benefits

These benefits are generally exempt from garnishment with a few exceptions. You can still lose these benefits if you owe federal student loans, child support, or unpaid federal taxes.

State Benefits

This category typically includes unemployment compensation, welfare benefits, and VA benefits. However, similar to Social Security, exemptions may not apply if you owe child support or back taxes.

Student Loans

Federal student loans are generally protected from garnishment in most debt collection cases.

Child Support Payments

Importantly, child support payments you receive cannot be garnished by creditors.  However, if you owe past-due child support, your wages or other income sources may be vulnerable to garnishment to recover the owed amount.

How Does Bankruptcy Affect Wage Garnishment?

Filing for bankruptcy can be a powerful tool to stop wage garnishment. When you file for bankruptcy, a court order called an “automatic stay” goes into effect.

An automatic stay is a legal provision that goes into effect upon filing a bankruptcy petition. It provides immediate relief to debtors by stopping most collection actions by creditors. That includes wage garnishment, foreclosure, repossession, and debt collection lawsuits. During the automatic stay, creditors cannot contact the debtor or attempt to collect on debts. They are only allowed during bankruptcy proceedings. 

There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy

This chapter allows for the discharge of most unsecured debts. Examples include credit card debt and medical bills. In some cases, wage garnishments for these types of debts can be stopped through Chapter 7. But note that this may not be suitable for everyone, and some assets might be subject to liquidation to pay creditors.

Chapter 13 Bankruptcy

This chapter involves creating a repayment plan that lasts for three to five years. During this time, you will make monthly payments to a court-appointed trustee, who will then distribute the funds to your creditors. Wage garnishments are typically halted while you’re making Chapter 13 plan payments.

Knowing which type of bankruptcy is right for you is crucial. Factors like your income, assets, and the amount of debt you owe will all play a role in deciding between Chapter 7 and Chapter 13.

Does Automatic Stay Stop All Wage Garnishment?

The automatic stay typically stops most wage garnishments. However, there are some exceptions to this rule. Certain types of debts may not be affected by the automatic stay and can continue to be garnished during bankruptcy proceedings.

• Child Support and Alimony: Child support and alimony obligations continue during bankruptcy proceedings. Wage garnishment for these purposes may continue.
• Certain Tax Debts: Some tax obligations, such as certain income taxes and property taxes, may continue. But, the specifics can vary depending on the circumstances and the type of tax debt involved.
• Government Debts: Debts owed to government agencies are not covered under automatic stay. Examples such as fines, penalties, or overpayments of government benefits. Wage garnishment for these types of debts may continue during bankruptcy.
• Student Loans: Automatic stay does not usually stop wage garnishment for student loan debt. There are other ways to handle student debt under bankruptcy.

How Can a Bankruptcy Lawyer Help Me Stop Wage Garnishment?

Wage garnishment can cripple your finances. While bankruptcy offers debt relief, it doesn’t stop garnishment for all debts. Here’s how a bankruptcy lawyer can help:

• Analyze your situation: They’ll assess the garnished debt and court order to see if Chapter 7 or 13 can halt it.
• Identify exemptions: Federal law protects some income. They’ll see if your wages qualify.
• Challenge the order: In some cases, the order might be faulty. They can challenge its validity in court.
• Automatic stay: Filing for Chapter 7 or 13 triggers a temporary pause on garnishment, giving you breathing room.
• Negotiate with creditors: They might be able to negotiate a settlement that eliminates garnishment.

Call Our Trusted Bankruptcy Lawyers Today!

If you’re facing wage garnishment in Rome, GA, don’t despair. Bankruptcy can provide a path to financial freedom and relief from creditor harassment.

You can navigate bankruptcy confidently with the help of a competent bankruptcy attorney. The Law Office of Jeffrey B. Kelly will provide a knowledgeable advocate who will stay by your side.

Take control of your financial future today and stop wage garnishment for good. Get a free consultation today!

Conquer Student Loan Challenges 

Understanding bankruptcy and its relation to student loans in Rome, Georgia, can be tricky. If you are dealing with overwhelming student loan debt, considering filing for bankruptcy might feel overwhelming, but it could also offer hope. This article is here to help you grasp the ins and outs of student loan bankruptcy in Rome, GA. 

It aims to explain the possibilities and limitations you might face when considering bankruptcy as a solution for student loan situations. Covering everything from how bankruptcy works to the specific issues tied to student loan discharge, this guide will provide clear information for Rome, GA, residents dealing with the relationship between bankruptcy and student loans.

Short Summary:

• Bankruptcy is a legal process designed to help individuals and businesses struggling with overwhelming debt (like student loan challenges) through a court-supervised procedure.
• Two common types for individuals are Chapter 7 (liquidation) and Chapter 13 (reorganization).
• Student loans are financial aid for higher education costs, repaid after graduation.
• Federal loans, which are more flexible, include Direct Subsidized/Unsubsidized, PLUS, and Perkins. Private loans vary in terms and conditions.
• Generally, student loans are not easily dischargeable in bankruptcy. Strict federal rules emphasize exploring alternative options before considering bankruptcy.
• Undue hardship exception allows discharge but requires proving extreme financial hardship.
• Brunner Test evaluates basic standard of living, persistent financial hardship, and good faith efforts. Some regions consider the totality of circumstances, creating jurisdictional variations in evaluating undue hardship.
• In Chapter 7, if unable to prove hardship, student loans must still be repaid. On the other hand, Chapter 13 offers alternatives such as debt elimination or a structured payment plan based on income.
• In Chapter 13, despite being responsible for any remaining balance after the repayment period, this process stops creditor calls, wage garnishment, and home foreclosure threats.
• Bankruptcy brings relief by addressing other debts, enabling a more concentrated effort on repaying student loans.

What is Bankruptcy? 

Bankruptcy is a legal process designed to help individuals and businesses struggling with overwhelming debt by providing a structured framework for resolving financial difficulties. It is governed by federal law and involves a court-supervised procedure.

Types of Bankruptcy 

There are different types of bankruptcy, but the two most common for individuals are Chapter 7 and Chapter 13.

Chapter 7 Bankruptcy 

• Also known as “liquidation” or straight bankruptcy.
• Involves the sale of non-exempt assets to repay creditors.
• Generally, the debtor is allowed to keep certain exempt property.
• Most unsecured debts, such as credit card balances and medical bills, can be discharged.
• Typically, the process is relatively quick, often completed within a few months.

Chapter 13 Bankruptcy 

• Known as reorganization or wage earner’s plan.
• Involves creating a repayment plan to pay back creditors over three to five years.
• Allows individuals to keep their property and catch up on missed payments, such as mortgage or car loan arrears.
• Often used by individuals with a regular income who do not qualify for Chapter 7 or want to protect non-exempt assets.

Remember that not all debts can be discharged through bankruptcy. Specific obligations, such as child support, alimony, student loans (in most cases), and certain tax debts, may not be dischargeable.

What are Student Loans?

Student loans are financial aid designed to help students pay for the costs associated with higher education, such as tuition, fees, books, and living expenses. Unlike grants or scholarships, student loans must be repaid, usually with interest, after the borrower graduates or leaves school.

Types of Student Loans

Federal Student Loans –  These loans, provided by the government, are often more flexible in terms of repayment. Typically offer borrower protections and income-driven repayment plans.

Federal loans include the following:

• Direct Subsidized Loans and Unsubsidized Loans: Direct subsidized loans are offered to undergraduate students based on financial need. The government pays the interest while the borrower is in school. On the other hand, direct unsubsidized loans are available to undergraduate and graduate students not based on financial need. Borrowers are responsible for all interest.
•  PLUS Loans: Available to parents of dependent undergraduate students and graduate students and requires a credit check.
• Perkins Loans: Provides low-interest federal student loans for students in undergraduate and graduate programs who have significant financial needs.

Private Student Loans – These loans are offered by private lenders such as banks and credit unions. These loans may lack the borrower benefits of federal loans. 

• Terms and conditions vary widely, including interest rates and repayment terms.
• Usually, credit history and income are considered during the application process.

Do Student Loans Easily Discharge in Bankruptcy?

The general rule is that student loans are not easily dischargeable in bankruptcy.

It is crucial to start by saying that getting rid of student loans through bankruptcy is usually challenging. Federal laws have strict rules about canceling educational debt, highlighting the need to look into other options for help. This part lays the foundation for understanding the basic ideas about student loans and bankruptcy. It helps people in Rome, Georgia, prepare for the challenges they might face when thinking about these money strategies.

How to Prove a Student Loan Discharge in Bankruptcy Court 

It is critical to prove that you cannot make enough money to repay your student loans For all the tests.

Undue Hardship Exception 

An exception to the general rule exists in the undue hardship provision. That requires borrowers to demonstrate extreme financial hardship, which is a condition that allows for potential discharge.

Criteria: 

• Brunner Test:  The primary evaluation for proving undue hardship follows the Brunner test, assessing factors such as the inability to maintain a basic standard of living, persistent financial hardship, and genuine efforts to repay loans.
  • Inability to Maintain Basic Standard of Living: The debtor cannot maintain a basic standard of living while repaying the loans.
  • Persistence of Financial Hardship: The financial difficulties are likely to persist throughout the repayment period.
  • Good Faith Efforts: The debtor has made a good faith effort to repay the loans.
• Other Standards in Different Region
  • Totality of Circumstances: Some regions consider the totality of circumstances, examining a broader range of factors beyond the Brunner test.
  • Jurisdictional Variations: Different judicial courts may employ varying standards in evaluating undue hardship, leading to regional differences in how bankruptcy courts handle student loan discharge cases.

What Happens If I Cannot Get Rid of Student Loans Through Bankruptcy? 

In Chapter 7 bankruptcy, if you cannot prove that repaying student loans is too difficult, you still have to pay them later. However, in Chapter 13 bankruptcy, there are different choices. This bankruptcy chapter is a viable option if you struggle with other bills like medical expenses or credit card debt. 

In Chapter 13, you can eliminate these debts or set up a payment plan based on your income, making them easier to handle. While you’ll still be responsible for any remaining balance after repayment, this process stops creditor calls, wage garnishment, and home foreclosure threats. Simply put, bankruptcy provides relief by dealing with other debts, allowing more focus on repaying student loans.

Call Us and Let Us Help You Discharge Student Loans in Bankruptcy in Georgia! 

Student loan struggles can be overwhelming, especially when bankruptcy seems like the only solution. At the Law Office of Jeffrey B. Kelly, we understand the complexities and hardships you’re dealing with. If your student loan bankruptcy in Rome, GA, is not easily discharged, don’t lose hope. Our team is here and ready to guide you. 

Don’t let the burden of student loan debt overwhelm you. Take the first step towards financial relief by contacting our law firm today. Our dedicated attorneys are committed to finding solutions tailored to your unique situation, providing the support you need during this challenging time. Call us today for a free consultation, and let’s work together to pave the way to a brighter financial future. Your peace of mind is just a call away.

Aside from our main office in Rome, Georgia, we also offer bankruptcy and personal injury legal services in our other offices in Dallas, Cartersville, Dalton, Kennesaw, Marietta, and Douglasville.

Preserving Tomorrow while Navigating Today: The Keys to Safeguarding Retirement Savings in the Face of Bankruptcy

Navigating the challenging terrain of bankruptcy raises various concerns, particularly when safeguarding one’s hard-earned retirement savings. As individuals grapple with financial adversity, the preservation of assets becomes a paramount consideration, and among these, retirement funds stand as a cornerstone for future security. This page delves into the critical topic of protecting retirement savings in bankruptcy, shedding light on the complexities surrounding this area of law.

Bankruptcy is a legal avenue that individuals may explore when overwhelmed by financial difficulties, offering a structured process for debt resolution. Yet, as one contemplates this route, the fate of retirement savings looms large. That raises pivotal questions: Can retirement accounts weather the storm of bankruptcy? What protections exist to shield these funds from liquidation? In addressing these concerns, we unravel the intricacies of federal bankruptcy laws, exemptions, and strategies that can fortify the resilience of retirement savings in the face of economic turmoil.

Short Summary

• The fate of retirement savings is a significant concern during bankruptcy.
• Retirement savings provide financial security, covering living expenses and healthcare. It also offers independence and security, allowing individuals to pursue enjoyable activities during retirement.
• Employee Retirement Income Security Act (ERISA)-qualified plans enjoy strong protection, while non-qualified plans may have limitations.
• Individual retirement accounts (IRAs) are subject to exemptions, with limits that change every three years.
• Homestead and federal exemptions provide additional safeguards for retirement savings.
• Taking out retirement benefits as income isn’t protected from creditors in bankruptcy.
• In Chapter 7, excess retirement income may be used to repay debts. On the other hand, Chapter 13 considers retirement income in determining the repayment plan.

What is Bankruptcy? 

Bankruptcy is a legal status that individuals, businesses, or entities may enter when they cannot repay their outstanding debts. It is a formal process initiated by the debtor (voluntary bankruptcy) or creditors (involuntary bankruptcy) through a court petition. The primary goal of bankruptcy is to provide a fair and orderly process for managing financial difficulties and distributing the debtor’s assets among creditors.

Types of Bankruptcy

There are several types of bankruptcy, but two of the most common for individuals and businesses are Chapter 7 and Chapter 13 in the United States:

Chapter 7 Bankruptcy

Liquidation Process

Chapter 7 bankruptcy, or liquidation bankruptcy, involves a straightforward process of selling non-exempt assets to repay creditors. While this process aims to provide a fresh start for the debtor, its impact on retirement savings is a significant consideration.

• Asset Liquidation: In Chapter 7, non-exempt assets are sold to repay creditors. However, federal laws provide exemptions that protect certain assets, including a portion of retirement savings.
• Exempt Retirement Accounts: Retirement accounts, such as 401(k)s and IRAs, are typically shielded up to a specific value. This exemption is crucial for preserving a portion of the debtor’s long-term savings during liquidation.

Impact on Retirement Savings

• Exemption Limits: While retirement accounts are generally exempt, there are limits to the amount of protection provided. Understanding these limits is essential in assessing the potential impact on retirement savings.
• Strategic Planning: Debtors may need to strategically plan for bankruptcy by maximizing contributions to exempt retirement accounts before filing. This proactive approach can help protect a greater portion of their savings.

Chapter 13 Bankruptcy

Repayment Plan

Chapter 13 bankruptcy is characterized by a reorganization process where the debtor creates a structured repayment plan over a specified period, typically three to five years. Unlike Chapter 7, it allows debtors to retain their assets, including retirement savings.

• Retaining Assets: Chapter 13 allows debtors to keep their property and assets, including retirement accounts, as long as they adhere to the court-approved repayment plan.
• Income-Based Repayment: The repayment plan is based on the debtor’s income, and a portion of it is allocated to repaying creditors. Retirement savings are not liquidated to satisfy debts, making Chapter 13 a more favorable option for those with valuable assets.

Treatment of Retirement Savings

• Protected Assets: Retirement savings are generally protected during Chapter 13 bankruptcy, providing a more secure environment for individuals to address their debts without sacrificing their long-term financial security.
• Potential Adjustments: Debtors may need to make adjustments to their budget to accommodate the repayment plan, but the ability to retain retirement savings is a significant advantage compared to Chapter 7.

In navigating the bankruptcy landscape, understanding the distinctions between Chapter 7 and Chapter 13 is crucial. While both types have implications for retirement savings, strategic planning and legal guidance can help individuals make informed decisions to protect a substantial portion of their assets during bankruptcy.

What is the Importance of Having Retirement Savings? 

Retirement savings hold significant importance for individuals and families, playing a crucial role in financial security and well-being during the later stages of life. Here are several crucial reasons highlighting the importance of retirement savings:

• Provide a financial cushion, allowing individuals to maintain their lifestyle and cover essential expenses after they retire.
• Savings serve as a source of income when regular employment ceases, offering financial independence during retirement.
• With increasing life expectancy, individuals may spend more years in retirement. Adequate savings are essential to cover living expenses, healthcare, and potential long-term care needs.
• Enable individuals to pursue hobbies, travel, and other leisure activities, contributing to a fulfilling and enjoyable retirement.
• Retirement savings act as a safety net, providing a buffer against economic downturns or unforeseen expenses.
• Help reduce reliance on government programs, allowing for a more comfortable lifestyle.
• Building retirement savings can create a legacy for loved ones. Unused funds can be passed on to beneficiaries, providing financial support or inheritance.
• Offer the flexibility to retire early or make career transitions without financial strain.
• Retirement savings, when invested wisely, have the potential to grow and keep pace with inflation, ensuring purchasing power is maintained.
• Knowing that savings are earmarked for retirement brings a sense of security and peace of mind, reducing stress related to financial concerns in later life.
• Having savings allows individuals to handle emergencies without compromising their financial well-being.

In summary, retirement savings are a cornerstone of financial planning, offering a means to achieve a comfortable and secure retirement. Building and preserving these savings requires long-term commitment and strategic financial management. Individuals are encouraged to start saving early and take advantage of employer-sponsored retirement plans.

What are the Exemptions for Retirement Savings? 

Exemptions for retirement savings refer to legal provisions that protect certain assets held in retirement accounts from being used to satisfy debts in the event of bankruptcy. These exemptions can vary depending on federal or state laws and the type of retirement plan. 

Here are some common exemptions for retirement savings:

ERISA-Qualified Plans:

• The Employee Retirement Income Security Act (ERISA) provides strong protections for some employer-sponsored retirement plans, such as 401(k)s, 403(b)s, IRAs, Keoghs, profit-sharing plans, money purchase plans, and defined-benefit plans.
• Generally, ERISA-qualified plans are fully exempt from the claims of creditors in bankruptcy.
• Non-Qualified Plans: While ERISA provides strong protection for qualified plans, non-qualified retirement plans, such as deferred compensation arrangements, may not enjoy the same level of protection. Understanding these distinctions is crucial in evaluating the vulnerability of different types of retirement assets during bankruptcy.

Individual Retirement Accounts (IRAs):

• IRAs, whether Traditional or Roth, are typically subject to exemptions up to $1,512,350 per individual, protecting them from being fully liquidated in bankruptcy. If you have more money in your retirement accounts than a particular limit, the bankruptcy court may use the extra funds to pay off what you owe. The exemption applies to the total of all your retirement plans combined; you cannot set aside $1,512,350 for each plan.

Note that this limit changes every three years to keep up with the rising cost of living. The latest change happened on April 1, 2022. The limit will be adjusted again in 2025 according to the law (11 U.S.C. § 522(n) (2023)).

• The specific exemption amount can vary depending on federal or state laws.

Homestead Exemptions:

• While not directly related to retirement plans, homestead exemptions protect a certain amount of equity in a debtor’s primary residence.
• By using homestead exemptions to protect home equity, individuals may free up other exemptions to be applied to retirement savings.

Federal Bankruptcy Exemptions:

• Federal bankruptcy laws provide a set of exemptions that can be applied to various assets, including retirement accounts.
• The federal wildcard exemption, in particular, is often used to provide additional protection for retirement savings beyond specific IRA exemptions.

State-Specific Exemptions:

• Each state has its own set of bankruptcy exemptions, which can vary widely.
• Some states may offer more generous exemptions for retirement accounts, allowing debtors to protect a higher amount of their savings.

Social Security Benefits:

• Social Security benefits are generally exempt from being used to satisfy debts in bankruptcy.
• However, funds in a bank account that contains Social Security deposits may be subject to bankruptcy rules.

It’s important to note that the specific exemptions applicable to an individual’s retirement savings depend on various factors, including the type of retirement account, the total value of the accounts, and the laws of the jurisdiction where the bankruptcy case is filed. 

What Happens If You Withdraw Your Funds from Your Retirement Accounts? 

Retirement money saved in your accounts is safe from creditors, but taking out retirement benefits as regular income will make it unprotected. 

Here’s how it works: In Chapter 7 bankruptcy, if you get a monthly payment from your retirement plan, the court considers it as income when deciding if you qualify for Chapter 7. The court cannot touch the part of the retirement benefits you need for living, but any extra amount might be used to pay off your debts.

For Chapter 13 bankruptcy, your retirement income is used to decipher how much of your unsecured debts you will need to repay in your repayment plan.

Call our Bankruptcy Attorney to Help You Protect Your Retirement Savings!

Navigating bankruptcy and protecting your retirement savings during bankruptcy can be challenging. At the Law Office of Jeffrey B. Kelly in Georgia, we understand the financial stress you may be facing. Unfortunately, withdrawn retirement benefits are not automatically exempt, which can impact your financial well-being.

But worry not! We are dedicated to guiding individuals through the complexities of bankruptcy, ensuring that your hard-earned retirement savings are safeguarded to the fullest extent permitted by law. 

Choose the Law Office of Jeffrey B. Kelly for:

✓ Competent Guidance: Benefit from our in-depth knowledge of bankruptcy laws.

✓ Strategic Planning: We tailor solutions to safeguard your retirement savings.

✓ Unwavering Support: Our team is dedicated to your peace of mind and financial stability.

Don’t let financial uncertainties dictate your future. Take control with the Law Office of Jeffrey B. Kelly. Contact us today for a free consultation, and we will collaborate to protecting retirement savings in bankruptcy for a brighter financial future. Your peace of mind starts here.

Aside from our main office in Rome, Georgia, we also offer bankruptcy and personal injury legal services in our other offices in Dallas, Cartersville, Dalton, Kennesaw, Marietta, and Douglasville.

Facing financial challenges and considering bankruptcy can be overwhelming. Understanding the complexities of the bankruptcy process is crucial to making informed decisions about your financial future. In this guide, we’ll provide you with the essential bankruptcy information you need Rome GA, to navigate this challenging terrain.

At the Law Office of Jeffrey B. Kelly, we recognize the stress that financial difficulties can bring. Our dedicated team is here to help you through the intricacies of bankruptcy, providing legal guidance and personalized solutions tailored to your unique situation. With years of experience and a commitment to client success, we aim to empower you with the knowledge needed to make confident decisions about your financial well-being.

Are you struggling with debt and seeking reliable guidance on bankruptcy? The Law Office of Jeffrey B. Kelly is here for you. Our team of experienced Rome bankruptcy lawyers are here to help individuals like you understand their options and navigate the bankruptcy process with confidence.

Don’t let financial difficulties control your future. Contact the Law Office of Jeffrey B. Kelly today for a free consultation. 

Quick Summary:

Here’s a brief overview of everything you need to know:

• Understand the nuances of Chapter 7 and Chapter 13. While Chapter 7 is quick and cost-effective, Chapter 13 involves repaying debts over several years, making it suitable for specific financial situations.
• Learn how filing for bankruptcy in Georgia provides relief from overwhelming debt. Recognize the importance of the state’s rules in determining what belongings you can keep.
• Discover how bankruptcy can eliminate various debts, from credit cards to medical bills. Assess whether bankruptcy will discharge enough debts to make it a worthwhile option.
• Be prepared for the time commitment—Chapter 7 takes at least 6 months to a year, and Chapter 13 lasts at least 5 years. Understand eligibility criteria and the impact on your credit report.
• Explore the exemptions available in Georgia, safeguarding home and vehicle equity, personal possessions, retirement funds, and more.
• Understand the costs involved in filing for bankruptcy in Georgia, including court fees and additional expenses. Learn about the post-filing process, including meetings and required courses.

If you’re struggling with debt, our experienced professionals at the Law Office of Jeffrey B. Kelly are here to guide you. Schedule a free consultation to explore personalized legal solutions for a fresh financial start.

What is Bankruptcy? 

Bankruptcy is a legal process designed to provide individuals and businesses relief from overwhelming debt and financial struggles. It is a court-supervised procedure that aims to help debtors eliminate or repay their debts under the protection of the bankruptcy court.

What’s the Right Bankruptcy Chapter for Me in Georgia? 

Bankruptcy comes in different types, and they each have their own rules. The two main ones for people are called Chapter 7 and Chapter 13.

• Chapter 7 is a popular choice for bankruptcy because it’s fast and inexpensive. It’s suitable for those with essential belongings but may not be ideal if you have valuable assets. In Chapter 7, unnecessary items can be sold to pay creditors. However, there’s a risk of losing significant assets like a house or car, especially if you’re behind on payments, as there’s no option for a payment plan to catch up.
• Chapter 13 is about repaying what you owe over three to five years. You get to keep everything you own, and the payment plan helps in tough financial situations. It’s handy for catching up on late payments to save your home or car. You can also use it to manage debts you can’t completely get rid of in bankruptcy.
  • But it can be costly, and not everyone can afford the monthly payments. Businesses can’t use Chapter 13 either. If you’re a business owner, it’s important to understand small business bankruptcies before deciding which option is right for you.

Bankruptcy is a legal tool that can offer a fresh start for those overwhelmed by debt, providing a structured way to address financial challenges. However, it’s essential to understand the specific implications of bankruptcy, as it can impact credit scores and financial options in the future. Seeking legal advice is crucial to navigating the process successfully.

Georgia’s Bankruptcy Process: How Does It Work?

Filing for bankruptcy in Georgia is similar to other states. It follows federal law, not state law, and helps break the agreements between you and your creditors, giving you a new beginning. However, Georgia’s rules are important because they decide what belongings you can keep. We’ll also share more details about filing after covering some basics.

Can Declaring Bankruptcy in Georgia Wipe Away My Debts?

Bankruptcy can eliminate various debts, including:

• credit cards, 
• overdue utilities, 
• medical bills, and
• personal loans. 

You may also be able to remove a mortgage or car payment if you’re willing to give up the associated property. However, not all debts can be discharged, such as domestic support arrearages and recent tax debt. Student loans are generally challenging to erase, but recent changes in 2023 aim to simplify the process with a new student loan bankruptcy form. It’s important to assess whether bankruptcy will eliminate enough debts to make it a worthwhile option.

How Much Time Does Bankruptcy in Georgia Usually Take?

If you’re thinking about filing for bankruptcy in Georgia, be ready for it to take at least 6 months to a year for Chapter 7 or at least 5 years for Chapter 13. The duration might change based on your financial situation or if there are any issues with the payment plan or challenges from creditors.

In Chapter 7, the process wraps up when the court approves payments by the bankruptcy trustee. Chapter 13 isn’t finished until all necessary payments are made, and the court recognizes the completion of your payment plan.

Remember, filing for bankruptcy will be on your credit report for 7 to 10 years. Chapter 7 stays for 10 years, while Chapter 13 usually disappears from the credit report in about 7 years.

Am I Eligible for Bankruptcy in Georgia? 

To qualify for bankruptcy, there are several requirements you need to meet. If you’ve filed before, you must check if enough time has passed to file again, which varies based on the previously filed chapter and the one you plan to file.

For Chapter 7, you qualify if your family’s income is below the median for your state. Use the Quick Median Income Test online to check. If you make too much, you might still qualify after the “means test.” If you can’t afford a Chapter 13 plan, you qualify for Chapter 7.

Chapter 13 can be costly. To qualify, you pay the larger of 

• your priority debt, 
• nonexempt property value, or 
• disposable income. 

What Are the Bankruptcy Exemptions in Georgia?

People filing for bankruptcy can safeguard certain home and vehicle value, personal belongings, retirement funds, and other assets. Here’s a list of common Georgia bankruptcy exemptions that filers often use.

• Homestead Exemption – In Georgia, the homestead exemption allows you to keep the house you live in, as long as there isn’t too much value in it. This exemption helps protect your property from the bankruptcy trustee and creditors.
  • You can exempt up to $21,500 of your home equity when filing for bankruptcy in Georgia. If your spouse co-owns the home and you both file for bankruptcy together, this amount doubles to $43,000.
• Wage Exemption – You can keep 75% of what you earn each week after necessary expenses, or 40 times the higher of the state or federal minimum wage. Bankruptcy judges can decide to let people with low incomes keep more of their wages.
• Motor Vehicle Exemption – If you own a car, you can protect $5,000 of its worth from being included in the bankruptcy.
• Jewelry – You can keep jewelry worth up to $500.
• Tools of the Trade Exemption – You can keep tools, books, and other essential work items worth up to $1,500.
• Personal Property Exemption – According to Georgia law, you can protect certain household items. You can safeguard a total of $5,000 for all items, but no single item can be worth more than $300. These items include furniture, household goods, clothes, appliances, books, musical instruments, crops, and animals.
• Support Exemption – In Georgia, money for alimony and child support needed to care for your kids is protected and cannot be taken in bankruptcy.
• Public Benefits Exemption – According to Georgia bankruptcy rules, specific public benefits are safe from bankruptcy actions. These include unemployment pay, social security benefits, and public assistance. 
  • Additionally, money from worker’s compensation, veteran’s benefits, old-age assistance, aid to blind or disabled persons, and crime victim’s compensation is also protected.
• Pension and Retirement Account Exemption – Georgia law keeps most pension and retirement plans safe. This includes the following: 
  • Tax-exempt retirement accounts such as 401(k)s, IRAs, and certain benefit plans. 
  • It also covers public office or employee plans. 
  • Additionally, reasonable and necessary payments due to illness, disability, death, age, or length of service under a pension or annuity plan are protected.
• Other Exemptions – Under Georgia law, additional funds and benefits can be protected. This includes money from health or medical savings accounts, medically prescribed health aids, wrongful death benefits needed for your support, and more. A Georgia bankruptcy attorney can help you figure out which other exemptions might be relevant to your specific situation.
• Wildcard Exemption – In Georgia, you can keep personal belongings you own worth up to $1,200 as per the law. If you haven’t used all the homestead exemptions, you can use up to $10,000 of the remaining amount to safeguard additional personal property using the wildcard exemption. This is especially helpful if your exemptions don’t cover all your belongings.

What Occurs After Submitting A Bankruptcy Filing in Georgia? 

Following your bankruptcy filing in Georgia, your creditors will generally cease contacting you within a few days due to the court issuing an “automatic stay” notice. This legal order prevents most creditors from requesting payment. The subsequent actions include:

• Submitting financial documents to validate the details in your bankruptcy paperwork.
• Attending the 341 meeting of creditors, a mandatory requirement for all filers.
• Completing a debtor education course and providing the completion certificate.

These steps are essential before obtaining a Chapter 7 bankruptcy discharge. For Chapter 13 filings, there’s an additional requirement to attend a repayment plan confirmation hearing and adhere to the three- to five-year payment plan.

Ready to Navigate Bankruptcy? Contact Our Rome Bankruptcy Attorney Now!

Are you struggling with debt and seeking reliable guidance on bankruptcy? The Law Office of Jeffrey B. Kelly is here for you. Our trusted team is well-equipped to help individuals like you understand their options and navigate the bankruptcy information you need in Rome, Georgia, as well as its process, with confidence.

At the Law Office of Jeffrey B. Kelly, we understand the stress and uncertainty that financial struggles can bring. Our knowledgeable legal team is dedicated to transforming financial challenges into success stories. Say goodbye to financial stress and hello to a fresh start! Don’t let financial challenges dictate your future. Take Action Now! Schedule your free consultation with the Law Office of Jeffrey B. Kelly today!

Aside from bankruptcy, we provide legal services on personal injury in Dalton, Kennesaw, Douglasville, Cartersville, Dallas, and Marietta. 

When is the best time to file for bankruptcy?

The decision to file for bankruptcy is not an easy one, but it can provide a fresh start and a chance to rebuild your financial future. If you find yourself asking, “When should I file for bankruptcy?”, it might be time to talk to a local bankruptcy attorney.

When it comes to bankruptcy issues in Georgia, the Law Office of Jeffrey B. Kelly is your trusted ally. Contact us today to schedule a consultation and let our dedicated bankruptcy attorneys guide you through the bankruptcy process. Take the first step towards financial freedom by putting our knowledge and experience to work for you.

What is Bankruptcy?

Bankruptcy is a legal process that provides individuals and businesses with a fresh start by eliminating or reorganizing their debts. If you find yourself drowning in debt and unable to meet your financial obligations, filing for bankruptcy may be a viable option to consider.

When Should I File for Bankruptcy in Georgia?

Making the decision to file for bankruptcy is a big step, and it’s important to consider all the factors before taking action. Filing prematurely could result in the loss of assets that could have been protected or even require you to file for a different chapter of bankruptcy than you originally intended.

But don’t worry; there are alternative options that you can explore before resorting to bankruptcy. By taking the time to understand these alternatives, you may be able to avoid bankruptcy altogether. So, let’s dive into different situations where postponing bankruptcy might actually be beneficial.

Do you see the need for mortgage modification later on?

Many people file for bankruptcy to delay foreclosure. Filing for bankruptcy too soon can make it harder to get a mortgage modification.

Once bankruptcy is filed, lenders often stop negotiating or refuse to negotiate the mortgage. Since bankruptcy erases the need to repay the mortgage debt but the lien on the house remains, creditors see no use in negotiating anymore.

If you might need a mortgage modification later, it’s best to wait on filing for bankruptcy until you know what might happen with the modification process.

Has your income increased recently?

Your income in the past six months is important for determining if you qualify for Chapter 7 bankruptcy through the bankruptcy means test. If you earn more than the set limit, you might have to file for Chapter 13 instead, which means you’ll need to repay some of your debts.

If your income has recently decreased due to a pay cut or job loss, it might be best to wait a few months before filing Chapter 7. This is to allow your pay cut to reflect and lower your average income, so you can more likely pass the means test.

For example, Let’s say your average income was $8,000 per month in the past six months, but you got laid off and now receive $1,500 per month in unemployment benefits. Waiting two months before filing for bankruptcy will lower your average gross income from $8,000 to under $5,900 per month. In this case, you will most likely qualify for Chapter 7 bankruptcy in most states due to your lower income.

Do you have property you wish to safeguard?

You might lose your property if you file for bankruptcy now. If you wait before filing, you can keep the property or sell it and make the most of the proceeds before filing bankruptcy.

Tax Refund

If you are expecting to get a tax refund, it might be in your best interest to wait before filing. If you were to file for bankruptcy before receiving the refund, you’d be required to surrender it to the bankruptcy trustee.

However, if you decide to wait and receive the tax refund first, you have the opportunity to utilize the full benefit of the refund. By spending it gradually over a few months on essential expenses and then proceeding with the bankruptcy filing, you can make the most of the refund to address your immediate needs.

Property Exceeding the Exemption Limits

Another reason to delay your bankruptcy filing is if you have more assets than are allowed by bankruptcy property exemptions. If you wait a few months to file, your assets may decrease in value and become exempt from property limits.

For instance, if your car is worth $6,000 but the state’s exemption laws only allow you to keep a car worth up to $5,500, If you wait a few months before filing for bankruptcy, the car’s value might decrease enough to meet the acceptable range specified by the exemption laws. This way, you can keep the car and benefit from the property exemption provisions.

Nonexempt Assets

If you are worried about your assets being taken away by the bankruptcy trustee and sold to repay your creditors, there are strategies you can use to make sure you benefit from these assets.

One option is to sell the property for its fair market value before filing for bankruptcy. That way, you can use the proceeds to cover your essential needs.

Alternatively, you could use the proceeds to acquire assets that are exempt from being sold in bankruptcy, such as a burial plot or a vehicle. That way, you can make sure your assets are protected.

Do you intend to take out another loan in the near future?

If you expect to have big expenses soon, it’s better to wait before filing for bankruptcy. Chapter 7 bankruptcy eliminates debts as of your filing date. You will be responsible for any debts after that date, which could burden you for a long time.

For example, if you have knee replacement surgery coming up in the next year, you may need to take out a loan to pay for the hospital costs. If you wait to file for Chapter 7 bankruptcy after your surgery, you may be able to include this loan in your bankruptcy discharge.

How often can I file for Chapter 7 bankruptcy?

Chapter 7 bankruptcy is commonly referred to as liquidation bankruptcy because it involves the sale of certain assets owned by the debtor. The funds generated from these asset sales are then utilized to repay the creditors.

It’s important to note that if you have previously filed for Chapter 7 bankruptcy and are considering filing for a new Chapter 7 case, there is an eight-year waiting period between the two filings. This waiting period is a requirement to be eligible for another Chapter 7 bankruptcy.

In certain situations, individuals may opt for Chapter 11 bankruptcy, which is primarily viewed as a bankruptcy option for businesses. On the other hand, the rules for filing Chapter 7 bankruptcy after a Chapter 13 case are somewhat more complex than filing consecutive Chapter 7 cases. Here are some of the guidelines to consider in such scenarios:

• If all creditor claims were fully paid in the previous Chapter 13 case, there is no waiting period required to file a Chapter 7 case.
• If the previous Chapter 13 plan was a genuine and sincere attempt to repay creditors, demonstrating the best effort, and at least 70% of the claims were paid during the case, there is no waiting period to file for Chapter 7 relief. The term “best effort” in a bankruptcy case means utilizing your disposable income to fulfill your obligations to creditors.
• However, if less than 70% of the claims were paid during the previous Chapter 13 case, a waiting period of six years is necessary before filing a Chapter 7 case.

How often can I file for Chapter 13 bankruptcy?

Through a Chapter 13 bankruptcy plan that the court has approved, people can choose to repay all or part of their debts. These plans, sanctioned by the court, typically span a duration of around three to five years.

If you have previously filed for bankruptcy, specifically Chapter 7, and now intend to file for Chapter 13, there is usually a waiting period to consider. In most cases, you must wait at least four years from the date of your Chapter 7 bankruptcy filing before being eligible to file for Chapter 13 bankruptcy.

However, if you plan to file back-to-back Chapter 13 cases, the waiting period is reduced to two years.

How Many Times Can I File for Bankruptcy in My Lifetime?

While there is a waiting period between bankruptcy filings, it’s important to note that there is no specific limit to the number of times you can file for bankruptcy. However, it is crucial to consider the impact of each filing on your credit. When you file for Chapter 7 bankruptcy, it can remain on your credit report for up to ten years from the date the case was filed.

Similarly, a Chapter 13 bankruptcy filing can stay on your credit report for approximately seven years after you file the case. It’s essential to be mindful of these timelines and the potential long-term effects on your credit history when considering bankruptcy as a financial option.

What is Double Filing?

Double filing, also known as Chapter 20 bankruptcy, refers to the process of filing for Chapter 13 immediately after obtaining a discharge in Chapter 7. It is important to note that Chapter 20 is not an officially recognized term within the bankruptcy laws.

Rather, it is a colloquial way of describing the act of filing Chapter 7 and then promptly proceeding with a Chapter 13 filing. Before pursuing back-to-back bankruptcy cases, it is crucial to carefully evaluate the advantages and disadvantages associated with this approach.

Benefits of Double Filing

The primary advantage of utilizing the “Chapter 20” strategy is that it provides the opportunity to address a larger portion of your debt over time. By first filing for Chapter 7 bankruptcy, you can eliminate unsecured debts, while subsequently filing for Chapter 13 allows you to establish a structured payment plan for both secured and unsecured debts.

Initiating the process with Chapter 7 bankruptcy helps reduce the overall debt burden, ensuring that you fall below the thresholds required for filing Chapter 13. This strategy can also offer the possibility of catching up on outstanding payments for items like mortgages or car loans that may have fallen behind. To summarize, here are the key benefits of double filing:

• You have the opportunity to reduce a larger portion of your debt gradually over time.
• By filing for Chapter 7 bankruptcy before restructuring your debt with Chapter 13, you can effectively decrease your overall debt burden.
• This strategy provides you with more time to catch up on overdue bills and payments that may have accumulated in the past.

Drawbacks of Double Filing

Here are the drawbacks of pursuing double or consecutive bankruptcy filings:

• Certain debts, such as child support and alimony, cannot be discharged through bankruptcy.
• To fully discharge debts in a Chapter 7 case and then file for Chapter 13, you must wait at least four years.
• It is essential to demonstrate good faith and avoid any intention to defraud creditors when pursuing consecutive bankruptcies.
• Filing back-to-back bankruptcies can prolong the time it takes to restore your financial situation and regain stability.

Find Out If You Should File For Bankruptcy Now!

Still figuring out when you should file bankruptcy? Our Georgia bankruptcy lawyer at the Law Office of Jeffrey B. Kelly can help you navigate the complex process and maximize the potential benefits available to you.

With our knowledge of bankruptcy laws, guidance through the process, individualized assessment and strategy, protection from creditor harassment, advocacy and representation, and future financial guidance, you can take the first step towards a brighter financial future. Contact us today to schedule a consultation.

Remember, you don’t have to face this challenging journey alone. We are here to support you every step of the way and help you achieve the fresh start you deserve.

Listing your debt is an essential part of filing for bankruptcy. And it’s equally important to know when a bankruptcy claim is contingent, unliquidated, or disputed. Here’s why.

While bankruptcy claims, in most cases, are very straightforward, figuring out the amount you owe to a creditor can sometimes be challenging.

The claim could depend on what someone else does, or it isn’t determined yet. Or perhaps, you and your creditor cannot agree on the actual amount owed.

If any of these is the case, you may want to seek immediate legal advice from your bankruptcy lawyer in Georgia. Nonetheless, read this article to know which claim to indicate in your bankruptcy papers.

Claims in bankruptcy

What does a claim mean in bankruptcy? You can look at it in two ways: a right and an obligation.

In a bankruptcy case, your creditor has a claim in your bankruptcy proceedings. For the creditor, a claim is a “right to payment.” For you, however, it is “nothing more nor less than an enforceable obligation.”

When you process your  bankruptcy, you need to fill out numerous bankruptcy forms to indicate your financial situation. On these forms, you have the “obligation” to disclose the following to the court, trustee, and creditors:

• What assets or properties you own
• How much you make and owe
• Your contracts and leases
• The names of your co-debtors
• Your financial affairs and social security number

Whether by mistake or deliberate action, concealing or failing to divulge such information can result in penalties.

On the other hand, the creditor must file a “proof of claim” to preserve or protect its right to a claim. A proof of claim is an official form filled out by the creditor to indicate the amount owed by the debtor.

When filing a proof of claim, the creditor will need to indicate the following information:

• Debtor’s name and the bankruptcy case number
• Amount owed as of the petition date
• The creditor’s information, including a mailing address
• The basis for the claim (e.g., a loan or credit card balance or a personal injury)
•  Claim type (secured or unsecured).

The creditor should attach supporting documentation, such as the contract, as evidence of the claim. Official attachment forms are available. Also, the creditor or an authorized representative must sign the proof of claim.

As mentioned earlier, you and your creditor may disagree on how much money is owed. And in some cases, the amount of debt could depend on somebody else’s action; thus, it hasn’t been determined yet.

So, when filing for a bankruptcy case, you can indicate whether the creditor’s secured claim is contingent, unliquidated, or disputed.

Let’s discuss what each term means.

Contingent claim

A contingent claim is a derivative or financial security with a payout that depends on uncertain future events. In other words, the payment for a contingent claim relies on a situation that hasn’t occurred yet or may never occur.

For example:

You consigned to your brother’s secured loan, specifically a car loan. You won’t be liable or responsible for paying the loan unless your brother, the principal debtor, defaults.

In short, your liability as a consigner is “contingent” or dependent upon an event or condition your brother might trigger.

Since such an event may not be guaranteed to take place, a contingent claim may or may not become valid. It’s usually filed by creditors when a debtor files for personal bankruptcy. The claim is handled based on state law and court precedence.

The basic premise is that there’s a cause that a triggering event may occur and make the claimant financially obligated. Therefore, it’s the creditor’s responsibility to the court to demonstrate that a triggering event really occurred, thereby making a claim valid.

If the court decides to treat the contingent claim as an absolute claim, the creditor receives payment.

Unliquidated claim

Debts (e.g., loans and credit cards) based on contracts between parties are often easy to figure out. Loan or credit contracts, for example, explain the debtor’s duties, liabilities, and other terms such as payment amount and interest rate.

However, sometimes something must occur before the creditor knows how much is owed. In this situation, a claim is unliquidated.

An unliquidated claim means a debt may exist, but the exact amount is unknown. For example, you have admitted to liability in a car accident lawsuit.

The monetary cost to the injured person can’t be determined because of the other party’s ongoing medical treatment.

Unless the treatment ends, those costs won’t be finalized or liquidated. You also won’t determine the total cost of your lawyer’s fees until your case is resolved. In other words, both the insurance claim and your attorney’s claim are unliquidated.

Disputed claim

What is a disputed claim?

Disputed claims are obligations you believe you don’t owe to your creditors. When you file for bankruptcy, you need to let the court know about these kinds of claims.

If you’re filing a Chapter 7 bankruptcy case, you won’t do anything else as long as the debt can be easily discharged. Also, there’s not much to sort out if there isn’t any money to distribute to creditors.

But again, disagreements between you and your creditors can occur. So, you file a dispute claim by disclosing the following: the amount you owe,  amount the creditor claims is owed, and any amount you paid to a creditor.

An example of a disputed debt is a delinquent account that doesn’t belong to you but showed up in your credit report.

Or, let’s say someone files a lawsuit against you claiming you’re responsible for an injury or damage that wasn’t your fault. In this situation, you’d want to dispute all or a portion of the medical expenses or claims charged to you.

But if you do end up with legitimately reported debt obligations, it’s important not to ignore them. Deal with the creditor first and ask them if they can allow you to resume making payments.

Make sure to list all your claims

For whatever reason, you might consider omitting a claim in your bankruptcy paperwork. You shouldn’t, though. Whether they’re bankruptcy claims you owe or those that creditors say you owe, you’re required to list them all. If you fail to list a claim, the claim may not be removed even if it qualifies as a dischargeable debt.

Listing or determining claims can be a complex process. That’s why most people who file for bankruptcy make sure they get the appropriate legal assistance to get the upper hand. So, if you find yourself struggling with your bankruptcy filing, call The Law Office of Jeffrey B. Kelly for a quick consultation.

We’ll make things easier for you!

A person’s property

• A property is a physical thing or a piece of land. 
• It can also be an object or a document. 
• Examples of properties include buildings, cars, jewellery, furniture and appliances. 

If you have any issues concerning the definition of property, it’s best to consult with a bankruptcy attorney for legal advice.

A bankruptcy court may make different decisions about treating various property types in a bankruptcy case. For instance, if you own a property with equity, it may be treated differently than your other types of property. 

If you own multiple properties, the court may decide that they’re all considered one property. The court may also decide that some of your properties are not considered assets at all and won’t be part of your bankruptcy estate. In this case, they’ll be treated as if they don’t exist.

To keep things simple, the court will often try to divide your assets into two categories: exempt and non-exempt. Most states have lists of exemptions that determine which types of property will be exempt from liquidation during the bankruptcy process. If a state does not have this type of list, federal law applies to determining these exemptions.

What is the definition of non-exempt property? 

Non-exempt property is a factor that might help or hurt you during your case, so you must ensure that you adhere to all the rules and educate yourself about how to save your non-exempt property in bankruptcy. This will give you a more comprehensive knowledge of how bankruptcy works and what options you may have available if you choose to file for bankruptcy protection.

Non-exempt assets

Some of your property or assets may be liquidated to satisfy your creditors following your bankruptcy filing. Non-exempt property is what these assets are. 

Non-exempt property has a straightforward concept: If you have valuable assets and file for bankruptcy, you should utilize the worth of these assets to pay off part of the obligations that will be forgiven in your bankruptcy.

After repaying any secured debts or registered liens, value refers to the equity in these assets. For instance, if you own a $900,000 property with a $675,000 mortgage, you will have $225,000 in equity in your home. This equity will be forfeited, subject to any applicable exemptions.

Frequently surrendered objects to the trustee include the following:

• Second automobile
• Artwork, coin collections, and jewellery of exceptional value.
• Stocks, bonds, and other assets that are not registered with a financial institution
• Cash in the bank above what is necessary to meet short-term living expenses
• the equity in your house.
• A secondary dwelling, for example, a cottage or a vacation property
• A bequest
• A refund of taxes paid on income earned up to the filing date

Which property is exempt from bankruptcy?

A debtor must submit to the court a list of exempt property. The term “exempt property” refers to property that the debtor may shield from liquidation. The Bankruptcy Code permits states to enact their exemption laws, that the debtor may choose over the federal exemptions. 

It is critical to speak with a competent bankruptcy attorney who can explain the state-specific exemptions available and how they relate to the federal exemptions available.

Typically, the exempt property comprises the following:

• Automobiles, up to a specific value
• Essential clothing
• Household products and furnishings that are essential
• Appliances for the home
• Up to a particular amount in jewellery
• Pensions
• A percentage of the debtor’s equity in their house 
• Tools necessary for the debtor’s trade or profession, up to a certain amount
• Unpaid but earned wages
• Public benefits accrued in a bank account include public assistance (welfare), social security, and unemployment compensation.
• Compensation for personal injury

You Will Lose Asset That Is Not Exempt from Bankruptcy

At the very least, in Chapter 7 bankruptcies. Chapter 13 operates somewhat differently.

Chapter 7: Loss of Non-Exempt Property

In Chapter 7, the bankruptcy trustee managing your case cannot sell your exempt property. However, the trustee has the authority to sell the non-exempt property. Even so, the trustee will avoid selling a low-value item. The trustee will first determine whether the property will provide a sufficient return for creditors.

Occasionally, a filer wants to retain property that a trustee might sell for a fair price. In this circumstance, many trustees may sell it to the filer at a reduced price—typically about 20% less. The bargain will be determined by the amount of money saved by the trustee on sales charges.

In Chapter 13, how do I pay for the non-exempt property?

A Chapter 13 trustee will not sell your property, even if you request it. You will retain everything. As appealing as this may seem, it may become costly. You are required to return the total amount of your non-exempt property under your repayment plan.

If you are unable to make the payment — and many individuals are unable to do so because of the fact that non-exempt equity may quickly increase a monthly fee — you will not qualify for Chapter 13.

Maintain accurate records if you wish to  attempt to circumvent this issue by selling assets before filing for bankruptcy. You may always sell the property and use the proceeds to cover your expenditures, but any leftover cash should be turned over to the trustee.

Should I hire a lawyer to file for bankruptcy if I don’t have non-exempt property?

Yes. Filing for bankruptcy is a complex process. Most people who file for bankruptcy engage the service of a lawyer to help them through this grueling time in their life.

If you have a vast amount of non-exempt properties, Chapter 13 may be better for you because it allows a more extended payment period (and the court will take the payment period from your discharge date).

If you have no non-exempt assets and can prove it, you might be able to file a Chapter 7 bankruptcy petition. In this type of bankruptcy, you would get a discharge of your debts and would not be required to pay anything to your creditors.

A competent bankruptcy attorney at the Law Office of Jeffrey B. Kelly (Kelly Can Help) will not only help you decide whether or not to file for bankruptcy but will also help guide you through the complicated process of filing for bankruptcy. The best thing about hiring an experienced attorney is that it can give you peace of mind when going through this challenging time in your life.

Conclusion

As you can see, the issue of what property is exempt isn’t as simple as it might appear. And while the Bankruptcy Code doesn’t always offer specific guidance on whether an item should be considered exempt or not, judges are often called upon to make that distinction for themselves. 

We hope that the content we’ve provided above has helped clear up some of those grey areas and will assist you in deciding how best to proceed in your case. If you are looking for experienced legal help, please call us at 678-672-4612 or contact us online to request a free legal consultation and learn more about your options.

When someone goes to a bankruptcy law firm and asks for advice, it is often quite surprising to hear them say, “I’m not sure which Chapter I qualify for?” or “Will my debts be wiped out?” or “Do I have to disclose assets?”. In response to these often asked questions, this article will discuss the types of bankruptcies.

Bankruptcy starts with the filing of a petition in the bankruptcy court. This post will be focusing on two of the most common types of bankruptcies – Chapter 7 and Chapter 13. However, if I file for bankruptcy, what will happen? Let’s start this post by answering that question.

What Happens If I file?

To file for bankruptcy, you must go to federal court. Once your bankruptcy case is filed, your creditors must quit chasing your debts. The court will then ask for information such as:

• Total debt owed
• A list of all your debtors
• A complete income statement
• A breakdown of your outgoing expenses
• A breakdown of your outgoing expenses

In bankruptcy court, you can represent yourself. You can also engage a bankruptcy lawyer to represent you and guide you through the lengthy process of declaring bankruptcy. Debt discharge or reorganization in bankruptcy court might take a long time. If you hire a lawyer, they can explain the timeframe in your bankruptcy case.

Chapter 7 and Chapter 13 Bankruptcies

Chapters 7 and 13 are bankruptcy chapters within the United States Bankruptcy Code. They are intended to help people who have become unable to pay their debts. Some people believe that Chapter 7 and 13 bankruptcy cases are the same thing. They are not the same. They have different rules and procedures.

The primary distinction between Chapters 7 and 13 bankruptcy is that you lose your property under a Chapter 7 bankruptcy, and it becomes property of the bankruptcy court. Under a Chapter 13 bankruptcy, you do not lose your property, but that property must be paid to your creditors in installments over three to five years.

What Type of Bankruptcy Is Chapter 7?

Bankruptcy Chapter 7 can sometimes refer to as liquidation bankruptcy because all of your assets are liquidated or sold to pay off as much of your debt as possible.

In some conditions, it is possible for a person filing for Chapter 7 bankruptcy to keep some types of property by paying the value of that asset into the Chapter 7 estate before any distribution takes place.

The following consist of the types of debts that are generally discharged in a Chapter 7 bankruptcy:

• Medical bills
• Credit card statements
• Bills for utilities
• Loans to individuals
• Certain governmental legislation

How Do I Meet the Criteria for Chapter 7?

You may apply for Chapter 7 bankruptcy without an attorney, but you should strongly consider hiring one. There is a great deal at risk, and the process may get rather complicated. Chapter 7 typically takes four to six months to complete.

The following are the usual criteria for Chapter 7 bankruptcy eligibility:

• You must pass a “means test,” in which your income, assets, and spending are examined.
• Any Chapter 7 or Chapter 13 bankruptcy petition filed in the last 180 days must have been dismissed.
• In the past eight years or six years, you have not filed a Chapter 7 or Chapter 13.

What Are the Benefits of Chapter 7 Bankruptcy?

1. Major Financial Help

The main advantage of Chapter 7 bankruptcy is the elimination of all unsecured obligations, such as utility, medical, and credit card payments, and personal loans. The best thing is that debt relief is unlimited, meaning bankruptcy can dismiss hundreds of thousands of dollars due.

2. Auto-stay

A lender can’t seize or foreclose on your property during a Chapter 7 bankruptcy. This temporary option allows you to catch up on payments or find an alternative.

3. Debt Collector Protection

The automatic stay protects you against creditors who may have previously harassed you for 

debt collection. If you entirely discharge a debt, you have permanent protection. On the contrary, you may obtain a partial discharge and a time extension.

4. Garnishment of Wages

If you file for bankruptcy, no creditor may garnish your wages. This money can be used to cover monthly expenses.

5. Exemptions

Chapter 7 permits you to keep assets like a home, a car, clothing, furniture, etc. To live comfortably, you can maintain other assets worth less than a specific amount (typically $10,000 or less).

6. Fresh Start in Months

It takes 3-6 months for Chapter 7 to work and you will get your fresh start. As opposed to a Chapter 13, where you need to finish a 5-year debt repayment plan.

What are the Disadvantages of Chapter 7 Bankruptcy?

1. Chapter 7 is not available to individuals or businesses who earn more than a certain amount. 

Your bankruptcy will be amended to Chapter 13, which includes either partial or complete debt relief.

2. Bad Credit

Credit scores will drop regardless of bankruptcy type and will be on record for 7-10 years. You may still get fresh credit or loans if you qualify. 

3. Asset Disposal

Non-exempt assets, such as expensive autos, real estate, and collectibles will be liquidated to satisfy creditors.

4. Harmful Publicity

When you declare bankruptcy, your financial situation is made public. Anyone can look up the bankruptcy, but few do.

5. Debts not dischargeable

Mortgages, student loans, and auto loans are not dischargeable under Chapter 7. Also, bankruptcy does not relieve financial obligations like child support, alimony, and taxes.

What Type of Bankruptcy Is Chapter 13?

Chapter 13 is sometimes called reorganization bankruptcy because, under this type of bankruptcy, you may be able to keep certain assets by agreeing to make regular payments on them for three to five years. If you cannot make these payments, then the property may be sold or liquidated to satisfy any remaining liabilities. 

You’ll need the help of a competent bankruptcy attorney when preparing and submitting this type of petition with the court. An attorney can help determine whether Chapter 13 is right for you.

How Do I Meet the Criteria for Chapter 13?

To be eligible for Chapter 13 relief, a debtor must meet the following criteria:

• The debtor may be an individual or a married couple. Corporations, limited liability companies, partnerships, and business trusts are not eligible for Chapter 13 relief.
• The debtor must have “regular income,” which encompasses job revenue (i.e., working for a pay check), business income, renting income, and government help or benefits.
• Monthly net income must exceed monthly cost of living, leaving money each month to pay the Chapter 13 Trustee.
• Secured debt, which includes mortgages, tax liens, and auto loans, cannot exceed $1,149,525.00, while unsecured debt, including credit cards and medical bills, cannot exceed $383,175.00. These figures are revised every three years.

What are the Benefits of Chapter 13 Bankruptcy?

• Maintain ownership of all property – As long as you comply with the terms of your repayment plan.
• While debt is not eliminated, it is greatly reduced.
• Complete protection from creditors – This includes wage garnishment and debt collection.
• Classification of debts – Define the difference between debts incurred with a third party and those incurred with oneself.
• Dischargeable debts – Debt incurred due to fraud or purchases of luxury items purchased using a credit card.
• Protection for cosigners – If the payment plan is for the full amount of the obligation, your cosigners are protected from creditors.
• Unfathomable Future Chapter 13 petitions – At any point, you may file a later Chapter 13 petition.
• The lender protects the borrower against foreclosure.
• Increased time to repay non-dischargeable debts.

What are the Disadvantages of Chapter 13 Bankruptcy?

• Consumption should be kept to a minimum until your payment plan is complete.
• Expenses for legal counsel increased due to the more complicated bankruptcy process.
• Between three and five years is the requirement to repay debt.
• Brokers of stocks and commodities are prohibited from filing for this type of bankruptcy.

Key Takeaways

Although Chapter 7 bankruptcy is usually what people want to file because it’s the fastest, filing it still has consequences. You will be prevented from filing again in the next six years, and you cannot get new credit without a cosigner or an agreement with your creditors to repay them. 

It is important to consult an experienced bankruptcy lawyer in Georgia.  At the Law Office of Jeffrey B. Kelly (Kelly Can Help), you will be guided on the best way to proceed with your bankruptcy so you can get on your journey to a financial fresh start. Take advantage of our free case evaluation now.