If you are struggling with Bankruptcy in Georgia, you have likely encountered two types of bankruptcy that most people file: Chapter 7 and Chapter 13. But which one is right for you?
This guide explains how each option works in Georgia, who qualifies, how long they take, and their pros and cons. We’ll also walk through local rules, Georgia exemptions, and a decision guide to help you understand which path best fits your situation.
Chapter 7 Bankruptcy in Georgia: A Fresh Start
Chapter 7 is often called “fresh start” bankruptcy because it removes unsecured debts such as credit cards, medical bills, and payday loans.
- To be eligible, your household income must pass Georgia’s means test, which measures it against the state’s median income level.
- A court-appointed trustee may sell property not protected by Georgia’s exemptions.
- Most cases in Atlanta wrap up in 3 to 5 months, giving you fast relief.
Best for: People with low or no disposable income, few assets, and the need for quick debt relief.
Chapter 13 Bankruptcy in Georgia: A Repayment Plan
Chapter 13, sometimes called the “wage earner’s plan,” differs. Instead of wiping out all debts, you make monthly payments to a trustee over 3 to 5 years.
- You keep your home, car, and other property while catching up on past-due payments.
- The plan length depends on your income compared to the median income of your household size in Georgia.
- Attorney fees are often rolled into your repayment plan, making it easier.
Best for: People with a steady income who want to save their home or car, repay arrears, or protect non-exempt assets.
Who Qualifies for Each?
Chapter 7 (Georgia Means Test):
You likely qualify if your household income is below the state median for your family size. If it’s above, allowable expenses may still reduce your income enough to pass.
Chapter 13 (Repayment Plan Length):
If your income is below Georgia’s median, your plan is usually 3 years. If it’s above, your plan runs 5 years, unless you pay off debts in full sooner.
What Property Can You Keep in Georgia?
Georgia’s bankruptcy exemptions protect important property, so you don’t lose everything when you file:
- Homestead exemption: up to $21,500 of equity in your primary home ($43,000 for married couples filing jointly).
- Motor vehicle exemption: up to $5,000.
- Wildcard exemption: a smaller amount that can apply to any property.
- Tools of trade: up to $1,500.
- If your property equity is higher than these amounts, Chapter 13 may help you keep it by paying creditors over time.
How Long Does Bankruptcy Take in Georgia?
- Chapter 7: Most cases in Atlanta take about 3 to 5 months from filing to discharge. You’ll attend a short 341 meeting of creditors about a month after filing.
- Chapter 13: Cases last 3 to 5 years, depending on your income and plan type. You start making payments about 30 days after filing.
What Does It Cost?
- Court fees (Chapter 7): $338 total.
- Attorney fees (Chapter 7): Usually $1,000 to $2,500 in Georgia, depending on complexity.
- Attorney fees (Chapter 13): Often included in your repayment plan, you don’t need the full amount upfront.
You’ll also complete credit counseling and debtor education courses, which cost a modest fee.
When Chapter 7 Makes Sense in Georgia
Chapter 7 may be the better choice if:
- You have little to no disposable income.
- Your property fits within Georgia exemptions.
- You need fast debt relief without an extended repayment plan.
When Chapter 13 Makes Sense in Georgia
Chapter 13 may be the better choice if:
- You’re behind on your mortgage or car loan.
- You own property with equity above Georgia’s exemptions.
- You have co-signers you want to protect.
- You need to repay taxes or child support arrears over time.
What are the differences between Chapters 7, 11, and 13?
- Chapter 7 is for individuals who want to wipe out unsecured debt quickly.
- Chapter 13 is for regular-income individuals who can repay part of their debts over 3 to 5 years.
- Chapter 11 is usually for businesses or individuals with massive debts; it allows reorganization under court supervision.
Most consumers in Georgia file either Chapter 7 or Chapter 13.
Do you pay back Chapter 7 or 13?
- In Chapter 7, you typically don’t repay unsecured debts like credit cards or medical bills; they’re discharged.
- In Chapter 13, you repay part (or all) of your debts over 3 to 5 years, based on what you can afford.
Talk to a Georgia Bankruptcy Attorney Today
Every situation is unique. Filing for bankruptcy in Atlanta, GA, can give you a fresh start, but choosing between Chapter 7 and Chapter 13 requires a careful look at your income, property, and goals.
At CMC Law, we help families and individuals in Atlanta and throughout Georgia understand their options and confidently move forward. Call us today or complete our free case evaluation form to find out which option may be best for you.
Which one is better: Chapter 7 or Chapter 13?
Neither option is “better” for everyone; it depends on your situation. Chapter 7 is usually better if you need fast relief, don’t have much property, and don’t have money left after essentials. Chapter 13 is often better for keeping a home or car, catching up on payments, or protecting assets not covered by Georgia exemptions.
Who is eligible for Chapter 13 in Georgia?
To file Chapter 13 in Georgia, you need a steady income covering your living expenses and a monthly repayment plan. There are also debt limits set by federal law (which adjust every few years). You may not qualify for Chapter 13 if your debts are too high.
FAQs: Common Questions About Bankruptcy in Georgia
Will I lose my home if I file Chapter 7 in Atlanta?
Not necessarily. If your home’s equity is within Georgia’s homestead exemption and you’re current on payments, you can usually keep it.
How quickly do creditors stop calling?
Immediately after filing, the automatic stay takes effect, and creditors must stop collection efforts.
Which bankruptcy option is better for my situation?
If you need fast relief and qualify under the means test, Chapter 7 may be best. If you need to catch up on payments, save a home, or repay over time, Chapter 13 could be the right fit.
Disclaimer
This article is for informational purposes only and does not constitute legal advice. Consult with a licensed Georgia bankruptcy attorney for advice on your specific case.