You can wipe out most of your unsecured debt if you go through a Chapter 7 liquidation bankruptcy. Not everyone can qualify for a Chapter 7 bankruptcy, but those who are eligible can get a mostly fresh start financially.
You do not get out of all debts if you file for bankruptcy because some debts are not dischargeable. A Georgia bankruptcy attorney can evaluate your situation and explain the debts that you can and cannot discharge.
Can You Keep Your House if You File for a Chapter 7 Bankruptcy in Georgia?
Often, debtors can keep their houses during and after a Chapter 7 bankruptcy. Keeping your house is not automatic or guaranteed, but there are things you can do to protect your home from liquidation by the trustee or foreclosure by the mortgage company.
The trustee will not get any excess funds from the sale of your home to pay creditors unless you have a great deal of equity. Georgia allows people to claim a homestead exemption on the house they live in, which can reduce the countable equity.
As long as you stay current on your mortgage payments, your mortgage lender is unlikely to institute a foreclosure proceeding against you. If your financial straits have caused you to fall behind on your house payments, you will want to contact your mortgage company to negotiate a modification of your house payments directly, not through the bankruptcy court.
Will They Take Your Car If You File for Bankruptcy?
No, it is unlikely that they will take your car as a part of a Chapter 7 bankruptcy. Most people get to keep their car. If you have a car loan, you will need to be current in your payments, and you might have to sign a reaffirmation agreement with your lender. In this document, you agree to make all of the car payments, no matter what happens in the bankruptcy case.
If you have paid off your car loan already, you will get to protect several thousand dollars of the value of the car. Sometimes a person can double that amount of protection. The goal is to exempt enough of the car’s market value to discourage the trustee from wanting to sell the vehicle.
What Kinds of Debts Does the Bankruptcy Court Not Discharge?
Usually, the bankruptcy court will not allow a Chapter 7 debtor to discharge student loans, but if you have a significant hardship that makes it impossible for you to repay the loan, the judge might discharge the debt. Usually, taxes are not dischargeable unless you filed the tax returns more than three years before pursuing a Chapter 7 discharge.
Who Can Qualify for a Chapter 7 Bankruptcy in Georgia?
There are limitations on who gets to file for Chapter 7 bankruptcy protection and how frequently they can discharge their debts through this type of lawsuit. Contrary to popular opinion, one cannot spend lavishly and file for bankruptcy every couple of years. You have to wait at least eight years from the date of a previous bankruptcy filing to seek Chapter 7 debt liquidation relief.
Also, very high earners usually cannot qualify for Chapter 7 protection. The combined income of you and your spouse must be below the median income for the size of your household. You might be eligible for a Chapter 7 bankruptcy after subtracting the allowed deductions, like your house payment, taxes, child care, and other permitted exceptions.
This article provides a general overview of which debts can get discharged in bankruptcy. A Georgia bankruptcy attorney can talk to you about what might happen in your situation. Contact our office today for a free consultation.
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