Georgia Bankruptcy Filers Should Look at Their Budgets to Eliminate Debt: It May be Okay to Lose Your Home


Debtors with a Chapter 7 or Chapter 13 bankruptcy filing in Georgia should examine their budgets in order to eliminate debt. I recently read a story about our country’s national debt, and one of the main points of the article was that the government needs to watch its budget in order to successfully eliminate debt and even to obtain new loans. The article cites economist, Diane Lim Rogers, who suggests that the government is much like a family that needs to watch its budget in order to eliminate debt and pave a path for a better financial future.

Debtors should apply the same sentiment in order to get rid of credit card debts, high mortgages, and excessive car payments, whether they complete a bankruptcy filing in Georgia or not. Some ways to cut costs include going out to eat less or eliminating premium cable channels. However, debtors may even want to consider more drastic measures such as losing their houses or cars in order to truly eliminate debt. The first thing I do when I meet with a debtor who may be a candidate for bankruptcy is look at that person’s income and budget.

When a person’s income is insufficient to support their budget, I advise that the budget be adjusted. For example, a debtor may earn a net monthly income of $3,000.00 but have a $1,800.00 monthly mortgage payment. When a monthly mortgage payment is more than fifty percent of the debtor’s income, I would advise that person to surrender the house to the mortgage company, either through foreclosure or a deed in lieu of foreclosure. Combined with a Chapter 7 or a Chapter 13 bankruptcy, such a choice, although a difficult one, could not only wipe out the mortgage debt, but also put the debtor in a position to move forward and adjust his or her budget to have a place to live to an amount that is aligned with his or her income. I would give the same advice to a debtor with an excessive car payment. For example, if the same debtor in the example above also had a car payment of $500.00 a month, he or she would only have $700.00 a month for food, utilities, insurance, and other expenses.

Getting Legal Counsel for Your Bankruptcy Filing Georgia

Examining your budget is difficult because it requires contending with the amount of money you spend on your expenses and may put you in the position of having to sacrifice something as dear to you as your home. However, just like the federal government, making adjustments to your budget could prepare you for a better financial future by eliminating your debt and making credit available to you for emergencies only. Of course, each situation varies, and you should consult a qualified bankruptcy attorney with your financial situation to see what options you have when you need to eliminate debt. Call the Law Offices of Charles Clapp at (404) 585-0040 or e-mail


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