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What
Doesn't Bankruptcy Do?
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Eliminate certain rights of
"secured" creditors. A "secured"
creditor has taken a mortgage or other lien on property as
collateral for the loan. Common examples are car loans and
home mortgages. You can force secured creditors to take
payments over time in the bankruptcy process and bankruptcy
can eliminate your obligation to pay any additional money if
your property is taken. Nevertheless, you generally cannot
keep the collateral unless you continue to pay the debt
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Discharge types of debts
singled out by the bankruptcy law for special treatment,
such as child support, alimony, certain other debts related
to divorce, some student loans, court restitution orders,
criminal fines, and some taxes.
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Protect cosigners on your
debts. When a relative or friend has co-signed a loan, and
the consumer discharges the loan in bankruptcy, the cosigner
may still have to repay all or part of the loan.- Discharge
debts that arise after bankruptcy has been filed.
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How
often can I file bankruptcy?
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You can
file for Chapter 7 bankruptcy again after six years has passed
from the date of your last filing. A Chapter 13 bankruptcy can
be filed at any time.
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What
Different Types of Bankruptcy Should I Consider?
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There are four types of
bankruptcy cases provided under the law:
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Chapter 7 is known as
"straight" bankruptcy or "liquidation."
It requires a debtor to give up property which exceeds
certain limits called "exemptions", so the
property can be sold to pay creditors.
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Chapter 11, known as
"reorganization", is used by businesses and a few
individual debtors whose debts are very large
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Chapter 13 is called
"debt adjustment". It requires a debtor to file a
plan to pay debts (or parts of debts) from current income.
Most people filing bankruptcy
will want to file under either chapter 7 or chapter 13. Either
type of case may be filed individually or by a married couple
filing jointly. |
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Is
Georgia Chapter 7 (Straight Bankruptcy) Bankruptcy Right for Me?
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In a
bankruptcy case under chapter 7, you file a petition asking the
court to discharge your debts. The basic idea in a chapter 7
bankruptcy is to wipe out (discharge) your debts in exchange for
your giving up property, except for "exempt" property
which the law allows you to keep. In most cases, all of
your property will be exempt. But property which is not exempt
is sold, with the money distributed to creditors. If you want to
keep property like a home or a car and are behind on the
payments on a mortgage or car loan, a chapter 7 case probably
will not be the right choice for you. That is because chapter 7
bankruptcy does not eliminate the right of mortgage holders or
car loan creditors to take your property to cover your debt.
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Is
Georgia Chapter 13 bankruptcy (Reorganization) Right for Me?
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In a
chapter 13 case you file a "plan" showing how you will
pay off some of your past-due and current debts over three to
five years. The most important thing about a chapter 13 case is
that it will allow you to keep valuable property--especially
your home and car--which might otherwise be lost, if you can
make the payments which the bankruptcy law requires to be made
to your creditors. In most cases, these payments will be at
least as much as your regular monthly payments on your mortgage
or car loan, with some extra payment to get caught up on the
amount you have fallen behind. You should consider filing a
chapter 13 plan if you:
(1) own your home and are in
danger of losing it because of money problems; (2) are
behind on debt payments, but can catch up if given some
time; (3) have valuable property which is not exempt, but
you can afford to pay creditors from your income over time.
You will need to have enough
income in chapter 13 to pay for your necessities and to keep up
with the required payments as they come due. |
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What
Does It Cost to File for Bankruptcy?
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It now
costs $200 to file for bankruptcy under chapter 7 and $185 to
file for bankruptcy under chapter 13, whether for one person or
a married couple. The court may allow you to pay this filing fee
in installments if you cannot pay all at once. If you hire an
attorney you will also have to pay the attorney's fees you agree
to.
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In
Georgia What Property Can I Keep?
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In a
chapter 7 case, you can keep all property which the law says is
"exempt" from the claims of creditors. In determining
whether property is exempt, you must keep a few things in mind.
The value of property is not the amount you paid for it, but
what it is worth now. Especially for furniture and cars, this
may be a lot less than what you paid or what it would cost to
buy a replacement. You also only need to look at your equity in
property. This means that you count your exemptions against the
full value minus any money that you owe on mortgages or liens.
For example, if you own a $50,000 house with a $40,000 mortgage,
you count your exemptions against the $10,000 which is your
equity if you sell it. While your exemptions allow you to keep
property even in a chapter 7 case, your exemptions do not make
any difference to the right of a mortgage holder or car loan
creditor to take the property to cover the debt if you are
behind. In a chapter 13 case, you can keep all of your property
if your plan meets the requirements of the bankruptcy law. In
most cases you will have to pay the mortgages or liens as you
would if you didn't file bankruptcy.
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What
Will Happen to My Home and Car If I File Bankruptcy in Georgia?
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In most
cases you will not lose your home or car during your bankruptcy
case as long as your equity in the property is fully exempt.
Even if your property is not fully exempt, you will be able to
keep it, if you pay its non-exempt value to creditors in chapter
13. However, some of your creditors may have a "security
interest" in your home, automobile or other personal
property. This means that you gave that creditor a mortgage on
the home or put your other property up as collateral for the
debt. Bankruptcy does not make these security interests go away.
If you don't make your payments on that debt, the creditor may
be able to take and sell the home or the property, during or
after the bankruptcy case. There are several ways that you can
keep collateral or mortgaged property after you file bankruptcy.
You can agree to keep making your payments on the debt until it
is paid in full. Or you can pay the creditor the amount that the
property you want to keep is worth. In some cases involving
fraud or other improper conduct by the creditor, you may be able
to challenge the debt. If you put up your household goods as
collateral for a loan (other than a loan to purchase the goods),
you can usually keep your property without making any more
payments on that debt.
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Can
I Own Anything After Bankruptcy?
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Yes. Many
people believe they cannot own anything for a period of time
after filing for bankruptcy. This is not true. You can keep your
exempt property and anything you obtain after the bankruptcy is
filed. However, if you receive an inheritance, a property
settlement, or life insurance benefits within 180 days after
your bankruptcy, that money or property may have to be paid to
your creditors if the property or money is not exempt. You can
also keep any property covered by Georgia bankruptcy exemptions
through the bankruptcy.
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