Bankruptcy Frequently Asked Questions
- Can I file bankruptcy and keep my house?
- How will filing bankruptcy affect my credit score?
- Can I file bankruptcy and keep my car?
- Can I file bankruptcy without my spouse?
- Should I continue to make payments to creditors after I file bankruptcy?
- Will I have to attend a hearing after I file bankruptcy?
- Can I rebuild my credit after I file bankruptcy?
- Can I keep one credit card when I file bankruptcy?
- How much debt do I need to have before filing bankruptcy?
- What is the difference between Chapter 7 and Chapter 13?
- Can I file bankruptcy against child support or alimony?
- Can I discharge tax debt?
- Can I discharge student loan debt?
- How long does the bankruptcy process take?
- Who will find out about my bankruptcy filing?
- How soon can I purchase a home after filing bankruptcy?
- What about strategic default?
- What if my lender is offering me a deed in lieu and cash for keys?
- What is the Means Test?
- How does having a bankruptcy attorney help me?
1. Can I file bankruptcy and keep my house?Yes, you can keep your house in a bankruptcy in Atlanta, Georgia. A Chapter 13 bankruptcy filing in Georgia allows you to consolidate your mortgage arrears and other debts into a monthly payment. In a Georgia Chapter 7 bankruptcy case, you can keep your house if it does not have equity subject to liquidation and if you keep your mortgage payments current.
2. How will filing bankruptcy affect my credit score?Filing bankruptcy will lower your credit score, but you can rebuild your credit after bankruptcy by maintaining current monthly payments on the debts that you still have and by keeping your debt to credit ratio low.
3. Can I file bankruptcy and keep my car?Yes, you can file bankruptcy in Georgia and keep your car. In a Chapter 13 in Atlanta, Georgia, you can consolidate your car payment with other debts into a monthly payment. In a Chapter 7 in Georgia, you are required to reaffirm your car note or resign the terms of the original car loan and keep your monthly payments current in order to keep your car.
4. Can I file bankruptcy without my spouse?Yes, you can file bankruptcy without your spouse. The bankruptcy petition will not contain your spouse’s name or social security number. Further, your bankruptcy filing will not be reported on your spouse’s credit report. However, you must disclose your spouse’s income when you file bankruptcy.
5. Should I continue to make payments to creditors after I file bankruptcy?After filing Chapter 7 in Georgia, you should not pay any of your unsecured creditors, such as credit card companies. However, you should continue to pay your mortgage and car note if you want to keep your house and car. After filing a Chapter 13 in Georgia, you will make a consolidated monthly payment to the bankruptcy trustee. Thus, you do not need to make a separate car payment or payments to credit card companies. However, if you are keeping your house, you must make your monthly mortgage payments directly to the mortgage company each month.
6. Will I have to attend a hearing after I file bankruptcy?Yes, you will have at least one hearing after you file bankruptcy. The hearing is known as the 341 Meeting of Creditors and is normally held in federal court in Atlanta and allows the bankruptcy trustee and creditors to ask you any questions about your assets and liabilities. You may be required to attend additional hearings, depending on your specific case.
7. Can I rebuild my credit after I file bankruptcy?Yes, you can rebuild your credit after you file bankruptcy. Creditors report the same information to the three credit reporting agencies, Equifax, Transunion, and Experian. Thus, if you make timely monthly payments on the debts that you have after the bankruptcy is closed, those timely payments will be reported positively on your credit report. On the other hand, if you make late payments or default on loans, such actions will be reported negatively.
8. Can I keep one credit card when I file bankruptcy?No, you cannot keep one credit card. You cannot pick and choose which creditors to list on your bankruptcy petition because that would not be fair to all of your other creditors.
10. What is the difference between Chapter 7 and Chapter 13?Chapter 13 bankruptcy attorneys in Georgia will tell you that a 13 case is a consolidation and repayment of your debts over the course of 3 to 5 years. Chapter 7 bankruptcy in Georgia is a total liquidation and wipes out your debts upon the discharge of the case, which normally occurs about six months after you file.
12. Can I discharge tax debt?If have Georgia or federal IRS tax debt, you may be able to discharge it, but it depends on how old the tax debt is and whether you filed the taxes on time and correctly. For more information about tax liability and bankruptcy, see our tax dischargeability section.
13. Can I discharge student loan debt?Normally, student loan debt cannot be discharged in bankruptcy. However, under some circumstances, where a debtor can show that the student loan imposes an undue hardship and that the debtor cannot repay the loan, a court may find that the student loan debt is dischargeable.
14. How long does the bankruptcy process take?A Chapter 7 bankruptcy case in Atlanta, Georgia usually takes about six months from start to finish. AChapter 13 bankruptcy case continues for 3 to 5 years.
16. How soon can I purchase a home after filing bankruptcy?Typically, you will not be able to obtain an FHA mortgage loan until two years have passed from obtaining a bankruptcy discharge. However, there are exceptions. We have actually had clients purchase home inside a Chapter 13 bankruptcy, and we’ve also had clients purchase homes about a year after filing a Chapter 7.
17. What about strategic default?“Strategic default” is when a borrower purposely elects to stop making mortgage payments and walk away from the home. The downside to a strategic default is a deficiency judgment, where the lender sues to collect the amount of the unpaid mortgage, and then does a wage garnishment to collect the money.
The cases of lenders pursuing judgments against borrowers who strategically default are rare in Georgia. This is because Georgia is a non-judicial foreclosure state which means lenders can foreclose on properties without going to court. Although non-judicial foreclosure is easier and less expensive for lenders, they cannot pursue a deficiency judgment after the sale unless they initiate a legal action called confirmation. A confirmation must be filed within 30 days of the foreclosure. So, if your home was foreclosed in Georgia, 30 days have passed, and you haven’t been served with a lawsuit, you can rest assured that you will not have to pay the deficiency.
Alternatively, a lender can file a lawsuit against you pre-foreclosure to collect the deficiency. However, these lawsuits can be very problematic for lenders, so they too are rare. In short, if you haven’t been served with a lawsuit, and 30 days have passed since foreclosure, you have likely succeeded with a strategic default. The strategic default will still have a severe impact on your credit score, but the lender will not, and cannot, pursue you for the mortgage balance.
18. What if my lender is offering me a deed in lieu and cash for keys?Sometimes, lenders will offer borrowers a deed in lieu of foreclosure, in addition to “cash for keys,” to leave the house. These offers can be good for everyone involved: it’s good if a borrower has no realistic way to stay in a house and has made the decision to move; and it’s good for the lender because they can avoid the cost of foreclosure and eviction. Additionally, if there is something wrong with the property’s title history or foreclosure, cash for keys will often indemnify the lender, meaning the lender will be protected from lawsuits from the borrower for wrongful foreclosure.
If your lender is offering you a deed in lieu or cash for keys, you should speak with an attorney to review your case. Our firm can help, as we have experience litigating title curative actions and wrongful foreclosure cases.
19. What is the Means Test?The Means Test is the method used to determine whether you are eligible for bankruptcy and how much or your debt must be paid back to creditors. The Means Test considers a multitude of complex factors which ultimately measures income against expenses. The Means Test accounts for all income received, payments on secured debts such as homes and vehicles, insurance, 401k payments, support payments for alimony and child support, food, clothing, housing, and other necessities, comparing these factors to the average median income of an individual or family similarly situated. The outcome of this analysis establishes what sort of bankruptcy a debtor can qualify for, the duration of bankruptcy, and exactly how much money must be paid back to creditors. There are many deductions to help a debtor pass the Means Test, but you must provide proof of the payments in order for the deduction to work. Every Means Test is audited by a bankruptcy trustee, a lawyer who oversees every bankruptcy filed.
The complexity of the Means Test is one of the primary factors that makes it so important to consult with an Atlanta Bankruptcy Attorney when filing bankruptcy. Making a mistake on the means test could means paying more to creditors than necessary, or possibly getting your case dismissed when it could have been successful. Contact our office for a free consultation to discuss your eligibility determined by the Means Test.
20. How does having a bankruptcy attorney help me?Bankruptcy is an extremely complex procedure and requires specific knowledge coupled with understanding of the system, filings, notice procedures, and deadlines. Additionally, there are many concerns and worries that run through the minds of people facing the frightening possibility of financial loss—dealing with the stress of debt is difficult on its own, but having a bankruptcy attorney to guide you through the process provides a terrific advantage.
Call us at 404.585.0040 or fill out the online contact information to schedule a free consultation to learn more about your rights. If bankruptcy may be an option for you, we will meet with you, discuss your circumstances in detail, and help you understand the bankruptcy process in Atlanta. At the initial consultation, we will review all relevant information, including your debts, assets and income. There is never a charge for the consultation.
This web site provides general information about a wide variety of bankruptcy and consumer law issues throughout Georgia. Although obtaining general information about bankruptcy and your potential options is an important first step, there is no substitute for talking directly with an experienced Atlanta Bankruptcy Attorneyabout the particular facts and circumstances of your case.
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