One of the most difficult issues to overcome when you are facing bankruptcy is how you can continue living a normal life. Creditors are hounding you. The bank won’t give you any more money to pay them or new bills. You can see your life crumbling around you and you don’t know what to do.
Bankruptcy seems to be the only option, but the greatest fear for most people is that they will lose their home and their car, and other priceless possessions. Without a home where will you live, and how will you get around without a car? If you are homeless and don’t have transportation, the chances of getting back on your feet will be severely compromised. Nobody will dispute that.
So what can you do?
First and foremost you need to ascertain your rights. Once you do this you will realize that you don’t have to lose your house or your car if you decide to file for bankruptcy in Georgia. A reputable bankruptcy attorney will advise the route you should follow. In general, though, there are certain options you need to familiarize yourself with.
But you do need to know that there are two different forms of bankruptcy, each of which has different requirements. Essentially the choice is between:
- Chapter 7 that wipes out all debts
- Chapter 13 that allows the repayment of a portion of the debt over a three to five year period
How to Keep Your Car when You File for Bankruptcy
Whether you opt for a Chapter 7 or Chapter 13 bankruptcy, you can keep your car. The difference is that with a Chapter 7 you will need to reaffirm the agreement you originally made when you bought your car and then continue to make monthly payments. This assumes that you haven’t failed to make payments because then the car creditor will probably be one of the people or businesses that are currently hounding you.
If you decide to follow the Chapter 13 route, future payments to secure the car will be included in the payment plan. Alternatively, if you bought the car more than 910 days before you filed for bankruptcy you can offer to pay the car creditor whatever is a “fair market value” for the vehicle plus an acceptable rate of interest.
How to Keep Your House when You File for Bankruptcy
With residential property in Georgia the homestead exemption kicks in. What this means if you file for a Chapter 7 bankruptcy is that if your house has a market value that is less than $10,000 this amount may be exempted. So if you have a mortgage of $120,000 and the house is worth less than this, you are safe. But if the house is worth more than the mortgage you could face a decision by the trustee to sell it. The exemption, in essence, gives you a small buffer that could save your home.
A good bankruptcy attorney will help you avoid foreclosure. If you are behind with mortgage payments your attorney can also help you work out a payment scheme for the arrears or negotiate a new plan.
As with a motor vehicle, if your assets are greater than the exemptions allowed, Chapter 13 is often a better option. However, there needs to be an agreement in terms of repayments. This needs to be negotiated by your bankruptcy attorney.
Decide What’s Best For You
Everybody’s money problems are different, and what’s best for your brother or neighbor may not be a good option for you. C. Golden & Fleming, LLC is a firm of highly experienced Georgia bankruptcy attorneys that can help you solve what probably seem like insurmountable problems. Call us and we’ll do what needs to be done to save your car and/or house.