This downgrade is going to have a large fallout and it isn’t going to just be in the stock market when you turn on the news. It is going to affect the everyday lives of U.S. citizens, including more locally residents of Georgia. The ability to have confidence in the U.S.’s ability to repay its debts is critical because it is tied to the interest rates that we pay. Due to this downgrade the price that we pay for goods and services can increase. Access to credit can become tougher and more expense and jobs could be lost. All of these factors point to a potential bankruptcy spike for residents of Georgia.

It is too soon to understand how the S&P downgrade will fully affect Georgia residents. In the coming weeks it will become more clear. Should the economy get worse because of this news, it is likely that research for legal advice on Atlanta Chapter 7 bankruptcy filings and Atlanta Chapter 13 bankruptcy filings will continue to increase. Berry & Associates will continue to monitor the S&P downgrade and the effect on bankruptcy.

First, Chapter 7 bankruptcy is a liquidation, where you discharge debts at some cost – you might lose some assets. Few lose much in the way of assets, and most debts can be discharged, such as medical, credit card, and mortgage debts. You may have some debts you want to continue paying on if you can afford to, such as on your mortgage, or you stand to lose assets. Chapter 7 bankruptcy is an option, but not your only option. You might consider Chapter 13 bankruptcy, where you repay debt over time and buy yourself some leeway with creditors and on your mortgage.

Second, Chapter 7 bankruptcy should only be used in certain situations. You might have a $50,000 medical debt from when you had no insurance and had to go to the hospital. You might owe $75,000 to credit card companies from a time when you had spending problems. You may be out of work and out of money, and the bills keep coming. On the other hand, if you have a smaller debt, understand that Chapter 7 bankruptcy is a big decision. You will hurt your credit, you may lose some possessions.

Chapter 7 bankruptcy is a fast process. You can be discharged of your debt in a matter of months. That huge medical bill can be gone and you can start rebuilding your credit. Chapter 13 bankruptcy takes much longer to put into effect. And you have to pay on the monies owed. If you file Chapter 13, you typically pay on the debts for 3-5 years.

If you are going to file Chapter 7 bankruptcy, file for effect. Take advantage of all that the filing will do. If you have a large medical bill coming in the mail, you should wait until you get it so you can discharge it with your filing. If you have a credit card bill coming in, perhaps a past due one, wait until you get it to file. In other words, wait until you can discharge the most debt. This is not to say you should spend money and then file, which is illegal. But you should take full advantage of the filing to save money.

Once you have completed Chapter 7 bankruptcy, it’s time to rebuild your credit. Yes, a bankruptcy will hurt your credit, and will show up on your credit report for 10 years. Therefore, you should only use it when you have to. However, it does not ruin your credit either; once you set up some accounts and start paying on your credit cards, you can slowly improve your credit score. Once you get  a better credit score, you can get a larger loan. It’s a very simple process, provided you pay your bills on time.

If you truly want to take advantage of Chapter 7 bankruptcy, it’s time to consider hiring an experienced Georgia bankruptcy lawyer. He or she can help you decide if Chapter 7 is right for you, how to file, and how you can take full advantage of it.

There are many pitfalls you can avoid when you file for bankruptcy help. After you file, some big decisions need to be made. If you make the right choices – and follow the advice of this guide – you can avoid many post-bankruptcy problems.

Bad Financial Planning
Just because you file bankruptcy does not mean all your problems will go away. Nor will you be able to spend money freely or ignore how you created these problems. Poor financial planning is a leading cause of second and third bankruptcies. You discharge a debt, then go and create a new one. If you can change how you spend money – and budget what you have – you stand to save a lot.

Rebuilding Credit
Another problem people have is in rebuilding credit. Some are taken advantage of by credit repair agencies. These agencies are almost always a dead end. They tend to bend the rules or flat out lie to you about how they can help. In other words, they take advantage of you. Your credit needs time to be repaired. There are no secrets. You might get a secured credit card and slowly improve your credit score. You might start spending money on cards and paying them off immediately. If you follow common sense, you can rebuild your credit.

The Wrong Credit Cards
In order to rebuild your credit, you are going to have to get some credit cards. One common problem people have is getting cards with high interest rates and then spending too much on them. Or you sign up for a plan after hearing some pitches, only to find out about monthly fees you simply should not pay or some other way to take your money. Creditors want money too. They can take advantage of you, so be careful in what credit cards you sign up for.

Using Chapter 7 Correctly
If you are going to file Chapter 7 bankruptcy, do so the right way. You stand to save tens of thousands of dollars, but this is not a get out of jail free card. Sometimes the debts are not your fault, but what you do after a bankruptcy filing can change your life. If you can save money, rebuild your credit, and budget what you have, you can get a fresh start.

How much will it cost?
If you want to save money, filing bankruptcy may seem like a no-brainer. Well, it’s not always your best option. You may be able to pay off debts on your own. You may be able to negotiate with creditors without a bankruptcy. And if you’re not eligible, you may have to find other solutions.

On the other hand, Chapter 7 bankruptcy can discharge tens of thousands in debt. It costs only $299 to file. Chapter 13 bankruptcy can save you the money invested in your home, while also buying you time to pay on other debts. You pay online $274 to file Chapter 13. That is a low price to pay for a second chance financially. You should also consider hiring a lawyer. A good lawyer will cost from $1,000 to $2,000.

Will you lose your home in bankruptcy?
Not necessarily; you can save your home with bankruptcy. Georgia bankruptcy allows for you to protect your home; the key is to have the right strategy. You might file Chapter 13 bankruptcy to stop a foreclosure before it begins. You might file Chapter 7 bankruptcy and pay on your home outside the bankruptcy. If you simply cannot afford your home, you might be able to use a short sale to lose the debt. If you want to discharge the debt instead, you can do so with Chapter 7.

What are your options?
You have Chapter 7 bankruptcy, perhaps the best way to save money, and Chapter 13, likely your best option for avoiding a foreclosure. If you make too much money, you may not be eligible for Chapter 7 (it’s based on the average Georgia income). If you owe too much – though this is rare – you may be ineligible for Chapter 13. You usually have the option of Chapter 7 or Chapter 13.

Why hire a lawyer?
Should you always hire a bankruptcy lawyer in order to file? About 99% of the time you should consider hiring a lawyer. A lawyer saves you money: it’s his or her job to ensure you discharge the most debt, and also avoid wage garnishments. A lawyer protects your possessions: it’s his or her job to help you avoid foreclosure and to keep other assets like your car too. Perhaps the most value a lawyer gives is in giving you a second chance.

Bankruptcy is not always your best option, but it’s often much better than the alternatives. Instead of paying on debts you simply cannot afford, file for help. Instead of using debt consolidation, protect your assets and your income by filing. Instead of selling your home, protect your dream with a Chapter 13 bankruptcy.

Get the Right Lawyer
Few of us can handle a bankruptcy by ourselves. Even if you are a lawyer, it takes time and skill to handle paperwork, creditors, and court room decisions. A Georgia bankruptcy lawyer saves you money, protects your assets, and ensures your future success.

Know Your Options
You have options beyond bankruptcy too. There are advantages to filing, especially with the legal protection you get. But you don’t always want to file bankruptcy.  Say, for example, you are getting called daily on a $5,000 medical bill, you are working, but you cannot pay the amount in the time they want. Since you have a job, and the bill is relatively small, you may want to consider other options, such as negotiating a payment plan. On the other hand, if you get a $50,000 medical bill, employed or not, it may be wise to save yourself that money and file bankruptcy. What form of bankruptcy?

Why Chapter 7 Bankruptcy?
The #1 cause of filing Chapter 7 bankruptcy is medical debt. The second biggest culprit for Chapter 7 is credit card debt. You stand to save thousands if not tens of thousands here. As a general rule, if you have debts you cannot pay off reasonably in a 3-5 year time frame, consider bankruptcy. There is no limit on how much you can save. Sometimes, however, you have a high income, and valuable assets you cannot lose.

Why Chapter 13?
If you make too much money, you may not be eligible for Chapter 7 bankruptcy. And if you want to avoid losing a lot of assets and properties, Chapter 7 may not be the best choice. In this situation, you can save more money – and money includes assets – by protecting these with a  Chapter 13 bankruptcy. This is a repayment plan over a 3-5 year period, in manageable installments, with the opportunity to protect all your assets including your home and car.

What Debts Can You Lose?
While some debts cannot be discharged – such as child support and taxes – most debts can be part of a Chapter 7 or Chapter 13 discharge. And if you have assets you want to keep, but want to file Chapter 7, you can negotiate outside the bankruptcy. This almost always requires a skilled Georgia bankruptcy lawyer.

Change
If you truly want to save the most money, don’t get into this situation again. You can only file bankruptcy so often. Change the way you spend and invest money. Change the way you look at growing debts. Pay bills on time, stay within your income, get medical benefits, and save money in case of future problems.

Who should you hire?
You should hire someone not for their legal help and expertise. A lawyer tries to help you. You should hire someone who has proven effective in helping others. There are thousands of Georgia bankruptcy lawyers, and not all are capable of handling your case. However, a good lawyer can make your discharge a life changing event.

How much can you discharge in bankruptcy?
According to USCourts.gov, “A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts …” You can discharge all debt, according to this government site reference, that is covered. Some debts cannot be discharged in Chapter 7 bankruptcy. You can discharge more kinds of debt in a Chapter 13 bankruptcy, but then you have to pay. The only limit you need worry about is the limit on what debts can be discharged. For instance, you can discharge a medical bill, but not taxes.

How does a lawyer help?
If you’re scratching your head about some of these bankruptcy facts, terms, and rules, it’s understandable. You need not read hundreds of articles and dozens of books on the subject. A lawyer can educate you quickly on how to discharge the most debt, protect the most property and assets, and at the end of the day save the most money.

What can’t you discharge in bankruptcy?
The most commonly listed debts you can’t discharge include taxes, alimony, and child support. That’s quite logical. The government won’t discharge monies you owe it. Alimony and child support are different issues with legal statutes. There are some other debts you can’t discharge in certain situations, but it’s best to ask your lawyer.

Why pay back debts with Chapter 13?
You discharge a debt in both Chapter 7 and Chapter 13 bankruptcy, yet Chapter 7 is about actually eliminating the debt, while Chapter 13 means paying some if not all the debt back over a manageable period. That makes Chapter 7 look better to many, and that’s the reason it’s still more common. However, paying back your debts with a  Chapter 13 bankruptcy can mean protecting your home from foreclosure, car from repossession, wages being garnished, and more. Your assets have more legal protection.

What if you aren’t eligible?
If you make too much money, the Georgia median income comes into effect and you can’t file Chapter 7. In rare cases, if you owe hundreds of thousands in secured and unsecured debts, you can’t file Chapter 13. What often happens is you want to discharge the debt with Chapter 7, but because of your income, you are forced to file Chapter 13. This rule was put into effect in 2005, making Chapter 13 more common. If you are unsure, consult with a Georgia bankruptcy lawyer.

The advantage with Chapter 7 bankruptcy is that you can save thousands of dollars, be free of debt, and lose little to no assets. Your home and car can be protected, but the more you own the more need you have for a professional lawyer.

If you have a large amount of property and assets, you stand to lose some of these in bankruptcy. While not common, if your home is going into foreclosure, bankruptcy may not solve your problems. On the other hand, being free of thousands to tens of thousands in debt may allow you to make payments on your home and car with income such as unemployment, disability, and pension.

Some say having no job is almost better with Chapter 7 personal bankruptcy. Why? Changes to Bankruptcy Code in 2005 made it more difficult to make the means test. The means test is the process where your income is calculated. If you are without work, you likely have no income, or perhaps a smaller income. The point here is that your income is based on the previous six months, so if you made a lot of money in the past six months you may have to delay your filing until your average gets below the limit.

For Georgia Chapter 7 personal bankruptcy filers, the median income is what eligibility is based on.

What is the annual median income for Georgia?
1 Individual – 40,546
2 Filers– 55,061
Family of 3 – 60,887
Family of 4 – 68,258
If you have a larger family, add $7,500 for each additional person.

This gives you some breathing room, though many make more than this while employed. But if you’re recently unemployed, you can more than likely file even if on unemployment benefits or disability, as these are very rarely higher than the median incomes stated above.

What if you have no money at all?
If you have no money whatsoever, remember you need to pay a filing fee for bankruptcy, and unless you are experienced in bankruptcy law, you need to hire a lawyer. Few of us are incapable of coming up with these fees given time, and while the court rate is not negotiable, some lawyers are willing to work with you.

Who can help?
What if you’re employed but have too much debt coming in? What if you lost benefits and then had an injury, leading to a huge medical bill? Who can help if you have questions? You need an experienced Georgia bankruptcy lawyer.

First, a lawyer can help you make the decision on whether filing bankruptcy is smart. Second, he or she can advise you on how to best discharge the most debt. Third, if you are making money, a lawyer can explain what Chapter 13 personal bankruptcy can do. Finally, a lawyer is your voice in and out of court: if you run into legal trouble, if creditors are harassing you constantly, and if you fear foreclosure, a lawyer can help.

Your Georgia Bankruptcy Options
You can file either Chapter 7 bankruptcy or Chapter 13 bankruptcy. Both have unique advantages, though sometimes you’ll not be able to file one, if not being eligible to file at both (which is rare, but happens). Chapter 7 helps families with immense debts impossible to pay. Typically credit card and medical debt puts families in a bad spot, and bankruptcy can discharge these debts. Chapter 13 is a debt repayment plan buying you and your family time to catch up on bills; it also protects your home from foreclosure.

If you are making a reasonable amount of money, you have a home and car, and your debts are just out of control, Chapter 13 can help you manage these debts while also ensuring you keep your home and car. If paying your debts is impossible, Chapter 7 can discharge these debts. It does depend on eligibility.

Family Eligibility for Bankruptcy
Chapter 7 bankruptcy eligibility in the state of Georgia is, like other states, based upon your income and the median income. For one person, the annual income limit is $40,546; for a family two it’s $55,061; for a family of three its $60,887; for a family of four it’s $68,258; and after that you add another $7,500 per additional family member.

For Chapter 13 bankruptcy, you can make as much money as you want. Your eligibility  is based on your secured and unsecured debts. If your unsecured debts exceed $336,900, or if your secured debts exceed $1,010,650, you are not eligible for Chapter 13. Unsecured debts are debts like credit and medical bills, with no asset or property involved. A secured debt is debts like your home and car, which can be taken if you fail to pay. All State laws are the same for Chapter 13 eligibility.

Why File Bankruptcy?
Filing Chapter 7 bankruptcy can literally save you from losing everything. If you have a minimal income, if you or your spouse recently lost a job, if you just got an unexpected huge medical bill, often your best option is to be free of this debt instead of spending years paying on it. Yes, bankruptcy will hurt your credit and ability to get loans, but in reality you can rebuild by following some simple steps.

Chapter 13 bankruptcy on the other hand can protect your home from foreclosure. If you make too much money for Chapter 7, you may think Chapter 13 is less effective. In some ways, this is true, but Chapter 13 can better protect you if you own a lot of properties and assets. If you’ve spent thousands on your home and car, losing them is a scary option.

Who can help?
For Georgia families, bankruptcy is a step in the right direction. If you are unsure if your financial position merits filing for bankruptcy, if you want to know whether you’re eligible, if you want to protect your assets, or if you have an impossible bill, consulting with an experienced Georgia bankruptcy lawyer can help.

Georgia Foreclosure and Debt
In Chapter 7 bankruptcy, technically your home can be used to pay off your debts, via a liquidation. However, quite often what happens is there is no equity in the home. Equity is the current value of your home minus the price you paid minus the payoff balances on all liens and mortgages. A bankruptcy will not discharge the lien a lender has on the property. The good news is lenders are not out to take your home; if they foreclose, they lose money. If you can somehow afford to make payments on the mortgage, you can keep the home. If you have less than $5,000 in equity on the home, you qualify for the homestead exemption, allowing you to keep the home and pay on it.

In some cases, Chapter 13 bankruptcy can be better in protecting your home and being able to afford the mortgage. This is a debt repayment plan with a goal for you to lose little if any assets.

Keeping Your Car
If you have no equity in your car, much like your home you can likely keep it.  You get the equity for your car by subtracting car loans and the car’s current value. In this example, the trustee will not take your car. Even if you have equity in your car, you can still likely keep it. The number you need to know is $3,500 under current state law; if you have more than $3,500 in equity, you can pay based on how much you owe minus the $3,500 number. So if you had $5,000 in equity, you would pay $1,500 to your trustee to keep the car. You still have more options, so consulting with an experienced Georgia bankruptcy lawyer can help.

Other Assets
You likely have more assets beyond your home and car. This is where the laws become difficult to master, as there is a long list of items you can keep and guidelines for how you keep them. Technically, if you have other properties, these can be taken and sold to pay off your debts (making Chapter 13 a better option). You can keep certain amounts of personal property value, up to $10,000 for you as an individual or $20,000 for you and your spouse if you file jointly. You can also keep most of the assets you have in your home, up to $300 per item for a total value of $5,000 or less.

Benefits
Social security, unemployment compensation, local public assistance, veteran’s benefits, disability, illness, or unemployment benefits are all exempt from being taken. This makes sense, really, because sometimes this is your entire income, whether retired, disabled, or recently unemployed.

Getting Legal Help
If you are unsure of the many complexities above, that’s understandable. These change from year to year, and almost always require a lawyer’s assistance to help you with. For local Georgia bankruptcy help, go with an experienced lawyer you can communicate well with, who has the time to spend helping your case and answering your questions, and who offers his or her expertise for a fair price.

Hire the Right Lawyer
We go over the many reasons you need a lawyer quite often on Georgia Debt Law. Unfortunately, many forgo hiring a lawyer because of a lack of income. It’s understandable: maybe you have no job, maybe you just received a huge credit card or medical bill, and paying money to a lawyer is impossible.

However, we all have ways of getting some money. Legally, you can get loans from friends and family, sell certain exempt assets, sometimes even negotiate with the lawyer on a payment plan. A lawyer is so valuable because he or she can help you fill out all forms correctly, handle any creditor problems you may be having, help you keep your assets, and most importantly discharge the majority of your debt. It’s easy to say, “you have to hire a lawyer,” but in reality, you may not have the means. If this is the case discuss your options with some qualified lawyers. Just making the call is a big first step.

If You Have No Job
If you have no job, filing Chapter 7 bankruptcy is a no-brainer. You have no income to be taken. You can prove you cannot afford a Chapter 13 repayment plan. What happened was the Bankruptcy Code of 2005 made it more difficult to file Chapter 7 bankruptcy nationwide. If you make too much money, you may be forced to file Chapter 13 and fund a repayment plan. However, if you have no job, it’s almost a good thing. You can clearly prove you cannot pay off these debts.

If You Have No Other Income
Also, if you have no other income coming in, say from disability or through a retirement plan, you are likely eligible for Chapter 7. Even if you have some money coming in, you are quite often eligible for Chapter 7. In Georgia, it’s based on the median income. If you are above, you have to file Chapter 13. Most with no jobs and minor income are eligible.

The Best Reasons to File
Filing can stop creditor harassment, give you a financial second chance, save assets from being taken, save you tens of thousands of dollars in credit or medical debt, and all for the cost of a $299 court fee and some lawyer expenses.

Foreclosure and Georgia Chapter 7
Filing Chapter 7 in Georgia is not always your best option. If you do have some money coming in, Chapter 13 may be better. In fact, it can save your home from foreclosure. Why? If you file Chapter 13 before the foreclosure papers are filed, an “automatic stay” is put on all your debts and stops any foreclosure. You can then renegotiate.

Credit Card and Medical Debt
Before you file Georgia Chapter 7 bankruptcy, consider all your options. If you have immense credit and medical debt, you can be free of it. These are the best reasons to file. Chapter 7 bankruptcy is a solution for those struggling financially. If you have no insurance, paying off a $100,000 medical bill may be impossible. If you made some financial mistakes and are in debt for tens of thousands on your credit cards, you may be in a hole impossible to dig out of. In these instances, filing Chapter 7 bankruptcy in Georgia can give you a fresh start.