A Chapter 13 bankruptcy is not a one-size-fits-all solution. It is an ideal answer for some, and for others, it simply will not work. Chapter 13 bankruptcy filers must be committed to the long-term success of their plan by ensuring they can make their repayment plan work.
Before determining if a Chapter 13 is right for you, you should and consult with a knowledgable Atlanta bankruptcy lawyer consider several factors. For instance, if a debtor owes debts that are not dischargeable in a Chapter 7 bankruptcy, a Chapter 13 will at least give them more time to pay these debts.
If a debtor has liens that are of higher value than the assets that secure the debt, they may want to consider a Chapter 13 bankruptcy over Chapter 7. Debtors who are behind on their house or car payments, have assets that are worth more than their available exemptions, or are repaying retirement fund loans may find that a Chapter 13 bankruptcy is their only option.
Benefits of Filing
The specific benefits of filing this type of bankruptcy include:
- Gives you more time to pay debts
- You may not owe the full debt
- You get to keep property while you are making payments on it
- You can begin rebuilding your credit sooner
- Stops phone calls and other communications from creditors and debt collectors
- Stops other actions to collect debt such as repossessions, wage garnishments, bank levies, and foreclosures
The same debts that are not dischargeable in Chapter 7 bankruptcies are also not dischargeable in Chapter 13 bankruptcies, including student loan debt, alimony, child support, taxes, and other court-ordered payments. You are still required to pay these debts in full, but with a Chapter 13 bankruptcy, they can be included in your repayment plan, which gives you more time to pay them as opposed to not filing Chapter 13 at all.
In bankruptcy, debtors are legally allowed to exempt some of their property from being sold by the trustee or from having to pay the trustee for it in their plan. Debtors who decide to file Chapter 13 bankruptcy are entitled to the same exemptions that Chapter 7 debtors are under Georgia Code § 44-13-100.
Different values apply to categories of exemptions such as jewelry, health aids, public aid, bikes, tools of the trade, and motor vehicles. If you are concerned with losing your property in a bankruptcy filing, be sure to discuss this with a well-versed Chapter 13 bankruptcy attorney in Atlanta. You may find that you do not have to part with your property in order to receive bankruptcy protection.