Deciding to file for bankruptcy can be a difficult to choice to make. It is important to remember that bankruptcy is a tool that is supposed to be used by those that need a fresh start. The main reason people file for bankruptcy is to get help with debts that have accumulated and can no longer pay in a timely manner. Bankruptcy allow a person to handle their debts either by making a payment plan or by getting their debts discharged (cancelled) entirely. Below is a brief discussion of the top ten reasons individuals file Chapter 7 and Chapter 13 bankruptcy case.
The House – Real Property
If it looks like the house you and your family live in is going to be foreclosed, filing for bankruptcy could delay that. A chapter 13 bankruptcy will stop foreclosure and creditors by creating a structured plan for you to pay an affordable amount each month. A chapter 7 bankruptcy may get rid of much of your debt, stop the foreclosure, but your house may be considered an asset if it has significant equity in it and used to pay back creditors. However, in most cases equity is not an issue because Georgia has rather generous bankruptcy exemptions for equity in homes.
Vehicles and Valuables
A concern for most people is saving valuable assets from being seized and repossessed by creditors. For example, if you are behind on car payments, bankruptcy can consolidate your missed payments, which you would then pay to your trustee rather than the finance company. The type of bankruptcy you file will determine what assets you can keep. It is important to speak with an experienced bankruptcy attorney so you can maximize the assets you keep.
Student Loans and Income Taxes
Getting an education is important, but sometimes those student loan debts will hold you back. It is important to know that filing for bankruptcy will not eliminate them, but your loans can be consolidated into a monthly payment plan through a easier to manage chapter 13 bankruptcy. The same goes for recent income taxes in that they can be put into a chapter 13 payment plan. However, older income taxes are frequently eligible for a discharge in a Chapter 7 and Chapter 13 case.
Having to choose on whether to pay a bill or helping the health of someone is indeed a very difficult choice. Monstrous piles of debt can result from an unexpected illness or injury and affect all areas of your life. Bankruptcy is often a workable solution to deal with debt while helping the most important people in your life. A chapter 7 can discharge virtually all medical, doctor and hospital expenses.
Job Loss and Reduced Income
In our changing economy, it is becoming a more difficult to get and keep a job in certain industries. If you are spending money but not making enough in return, your bills, insurance and other expenses can become increasingly difficult to keep up with – if not impossible. Filing for bankruptcy can provide you with debt relief while you look for new and/or better employment opportunities.
Divorce, Alimony and Child Support
A divorce can sometimes be quite expensive, along with the filing fee’s there is also the cost of finding a new home, paying alimony, paying child support and attorney fees. All of this can have a devastating effect on your financial situation. Divorce is a leading factor in many people filing bankruptcy. And a chapter 7 or 13 can provide options for you to eliminate mounting debts from your divorce and other expenses.
Credit Card Debt
Credit card debt is one of the main reasons for bankruptcy. If you have accumulated an unmanageable amount of credit card debt, there is hope in filing a bankrupt case. There is the real possibility that it all can be discharged by filing a chapter 7 bankruptcy so long as you meet the requirements for a case.
Harassment From Creditors
If you owe creditors some debt, they may sometimes take a forceful approach when collecting debts or they may even try to collect more than you owe. Through the power of the bankruptcy “automatic stay” – filing for bankruptcy will immediately stop creditors and stop the harassing calls and mail.
Garnishments by Creditors
Once a creditor has obtained a judgment against you, they can request a garnishment of your wages. If that happens, filing for bankruptcy can put an end to that garnishment.
Getting a Second Chance / Fresh Start
A lot of people do not realize that negative items on your credit report can stay on there for many years until they are handled be either being settled or discharged through bankruptcy. The path to better credit can only begin when all outstanding debts and obligations are handled. Although a bankruptcy can show on your credit report for several years; more importantly – after filing your credit score can start to improve starting immediately.
If you are thinking about filing bankruptcy for yourself or your business, call us at 770-609-1247 to discuss how we can assist you in deciding what is best.