Georgia bankruptcy can be a complex process, which is quite often why some appeal for the experienced help of an attorney. There are some things you simply have to decide your own – namely, if bankruptcy is right for you. For home owners, there is this big burden on your shoulders called a mortgage, and a fear of that old enemy foreclosure. This blog post won’t say whether to choose Chapter 7 or Chapter 13 bankruptcy, but what it will do is guide you through the key differences when it comes to foreclosure. If you want to save your home, or get out while you can, this guide is for you.
The Discharge
Chapter 7 bankruptcy discharges debt. That’s the most simple way to describe it. And remember that major debts included are your mortgage. What any personal bankruptcy will do is put into place an immediate “automatic stay” on your home. It will be the same with your money, and your other assets. You can’t do much, your debtors really can’t do much either. If your home is in the foreclosure process, the automatic stay delays it. A creditor can appeal to the court to let the foreclosure continue. In this case, you have a 1-2 months to stay at your home until the foreclosure makes you leave. It may seem odd that you have some benefit here – free rent for a few weeks – but really it buys you just enough time to get in somewhere else.
On the other hand, if your home isn’t in foreclosure, you have more options. You can technically keep the home in many cases. Rarely do Chapter 7 filers lose assets. It’s up to the trustee, court appointed to liquidate your assets, and the law on what can be sold. In many cases, you can negotiate directly with your trustee to keep certain assets, such as your home or car.
The Hard Work Option
Chapter 13 bankruptcy for Georgia residents is quite different, and somewhat more effective to stop a foreclosure, but less common. Here again the judge will put an automatic stay on your home. As long as your lender has not put a foreclosure in the works, you can keep your home in most all cases. What happens is the court halts any further foreclosure, you are able to create a debt repayment plan, and with this plan you can pay an affordable rate on the home and your other debts. While you still have to pay, you have 3-5 years and you keep all assets. Chapter 7 is sometimes called the “wipe out,” Chapter 13 the “work-out”, for obvious reasons.
Bankruptcy is not for every situation. Just because you fear losing assets does not mean you should file. However, it’s a very good option to file Chapter 7 if you cannot afford to pay back debt, and Chapter 13 is smart if you want to stop a foreclosure before it begins. While not for everyone, each have immense benefits when it comes to saving money and assets.
