Chapter 7 bankruptcy is an option for most Georgia residents, but it’s not always your best option. Ask yourself some questions prior to filing Georgia Chapter 7. First, will this bankruptcy save you enough money to be worthwhile? Second, do you stand to lose some valuable property and/or assets if you file? Finally, will creditors have the option of taking your assets if you don’t file bankruptcy? This guide will help by going over these concerns in detail.
Is it worthwhile?
If you make $10,000 a year, and have a $20,000 bill, it would be logical to file for bankruptcy help. If on the other hand you make $20,000 a year and owe $3,000, even if you are beyond your means you may think twice about bankruptcy. Why? If you can pay back the debt yourself in a matter of years, especially less than 1 year, you should consider doing so. Chapter 7 bankruptcy is not always your best option. It will likely cost you some assets, monies in your bank accounts, and you’ll also lose the chance to file Chapter 7 again for 8 years. Therefore, you may want to wait until you get more insurmountable debts. If 4 years down the line you make $20,000 a year and owe $50,000, you would still have that option to file.
So ask yourself if filing will truly reward you. Sometimes you want to wait, sometimes you don’t want to file at all, and other times it may be in your best interest to file immediately.
Will you lose assets?
If you stand to lose your home by filing Georgia Chapter 7 – which does happen – then you may want to consider filing. If on the other hand you want to discharge the mortgage, you can do so with Chapter 7. Also, if you want to file Chapter 7 and pay on your mortgage outside the bankruptcy, that can be done. Now, understand that some money, property, and assets will not be exempt in the bankruptcy. You can only keep so much. Therefore if you stand to lose more than you gain, consider alternatives such as Chapter 13.
There are exemptions in place to protect you. You can usually keep your car, but your biggest asset, your home, will be in danger if you cannot pay on it. There are some nonexempt assets too, including money in your bank account, luxury clothes, even expensive jewelry. To understand this better, consult with a Georgia bankruptcy attorney.
Are you judgment proof?
On the legal resource NOLO.com, one point in considering Chapter 7 is that of being “judgment proof,” where you may actually lose nothing by doing nothing. In other words, you don’t have to file bankruptcy. If your income is exempt – NOLO uses the example of social security income – then creditors cannot take that. If all your assets are exempt, creditors also cannot take them. It’s rare to be completely judgment proof, but if you are, it may be unnecessary to file Chapter 7.
