How Filing Chapter 7 Bankruptcy in Georgia Can Help You

Car Repossession

Under Georgia state law, if you are late on your car payments or have defaulted on your lease or finance contract for your car, the creditor has the right to repossess the car, sell it and then possibly sue you for the rest of the debt.

How Bankruptcy Stops Car Repossession in Georgia

Filing bankruptcy can prevent your car creditor from repossessing your car. In many cases bankruptcy provides a structured repayment of the debt and can even reduce the balance and interest rate that you have to repay.

The Automatic Stay Stops Car Repossession

When you file for Chapter 13 bankruptcy, the court puts an order called the “automatic stay” in place that prohibits debt collection attempts. The stay applies to most, but not all, creditors and debt types. It will prevent a lender from repossessing your car.

In order to continue to go to work, take your kids to school, go shopping and other daily activities, you need a vehicle in Georgia. When financial problems arise, such as reduced hours of work, a medical emergency, a divorce or loss of employment, your car can be in danger of being picked up leaving you helpless.

There is no set time limit on when your car can be repossessed if you have defaulted on your loan. Technically, when you are even one day late with your car payments you are in default of your loan agreement. Getting more than one month behind on your car loan is very risky and some creditors are very agressive and will pick up your car without notice.

  • Most people who file Chapter 13 can cram down the interest rate on their car and save thousands of $$
  • If you have had your car for at least 910 days you can usually cram your car loan down to just the FMV

Even if your car has been picked up you can still get the car back if the creditor still has the car at the time of your bankruptcy filing.

How Bankruptcy Stops Home Foreclosure in Georgia

The automatic stay protects a person as soon as they file bankruptcy. By law, creditors must suspend all collection efforts, including foreclosure, as soon as the automatic stay goes into effect. As long as you file bankruptcy before the foreclosure sale date, the foreclosure can be stopped.

There is no right of redemption in Georgia. Once your home has been sold at foreclosure it is gone. Don’t mess around with foreclosure! Talk to an attorney about your options.

A Chapter 13 bankruptcy plan works by reducing or eliminating all your non-mortgage debt: credit card, medical and IRS debt, car payments, home equity loans and many more. This process will cut your total monthly payments and give you a much better financial benefit than a loan modification or forbearance.

Filing a chapter 13 bankruptcy case on your own, without a lawyer representing you, is very difficult. Most cases filed without a lawyer end up being dismissed. You will have a much better chance of saving your home if you retain a lawyer to represent you in a chapter 13 case.

  • Georgia law requires lenders to provide notice of a foreclosure at least 30 days before the date of the foreclosure sale.
  • The notice must be in writing and sent to the borrower by certified mail or statutory overnight delivery.
  • The lender only needs to prove that the notice was properly delivered to the borrower’s last known address; the law does not require proof that the borrower actually received the notice.

If you are falling behind on your mortgage, or even if you have already received a foreclosure notice, we can help you.

Foreclosure in Georgia

Many homeowners facing foreclosure want to save their homes, but feel like they have no options. Loan modifications can be difficult. Many people who attempt to negotiate loan modifications on their own have found themselves facing foreclosure.

Child Support/Alimony Arrears

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How Bankruptcy Allows You to Restructure Past Due Child Support/Alimony

While filing bankruptcy does not discharge your past child support debts, it can still help you if you are behind on child support. Although you will still need to make ongoing child support payments during the course of your Chapter 13 or Chapter 7 bankruptcy, either option can clear away some of your other debts and allow you to put more of your income towards child support.

If you fail to pay child support in Georgia, you could face some serious consequences, ranging from being in contempt of court to losing your driver’s license.

Under Georgia code O.C.G.A. § 19-6-28.1(b) in any proceeding for enforcement of a judgment or order to pay child support, a license may be suspended if the parent is 60 days or more in arrears.

Through a Chapter 13 case, you can catch up child support arrears or back alimony payments over a three to a five-year bankruptcy repayment plan. The Chapter 13 trustee receives your bankruptcy payments each month and uses a portion of those payments to catch up child support arrears.

  • Bankruptcy will automatically stop state court lawsuits and arrest warrants
  • If your license was suspended due to child support you can get it back once you file Chapter 13
  • Chapter 13 repayment plans can go from 36 to 60 months.

Instead of spending more money in family court to fight child support warrants, file Chapter 13 and take control of your child support repayment issues.

How Bankruptcy Stops the IRS and Georgia Department of Revenue

A Chapter 13 bankruptcy can offer a more lasting solution if you’re facing an IRS levy. With a Chapter 13 bankruptcy filing, you are restructuring your debts into a more feasible repayment plan.

The key to stopping a wage garnishment or IRS levy is the use of the “automatic stay” of the Bankruptcy Code.  The automatic stay immediately stops any enforcement action on the part of a creditor.  In other words, this stay can immediately stop a garnishment or a sheriff’s sale or a bank levy.   The term “automatic” means that the Debtor is not required to

If you are in the midst of, or fear, tax collections, be sure to see an experienced bankruptcy lawyer to find out what would happen in your unique situation.

The Bankruptcy Code sets out specific time periods that determine if you can discharge your taxes, commonly called the 3-year, 2-year, and 240-day rules (the “3-2-240 rules”). Under these rules, you can discharge income taxes that came due three years before you file for bankruptcy, as long as it has been at least two years since you filed the tax forms and 240 days since the taxes were assessed.

  • The 3-Year Rule. This rule states that to discharge your back income taxes, they must become due at least three years before you file for bankruptcy. Bankruptcy Code §507(a)(8)(A)(i). Typically, your federal and most state income taxes are due April 15th of each year.
  • The 2-Year Rule. Under the 2-year rule, your income tax returns must have been filed at least two years before you file your bankruptcy petition.
  • The 240-Day Rule. Taxes must have been assessed by the taxing agency at least 240 days before you file for bankruptcy under this rule or not assessed at all.

The ability to write a chapter 13 plan and cram down tax liens is very specialized. Make sure you work with a Georgia bankruptcy attorney that has experience in this area.

Tax Liens in Georgia

Don’t be intimidated by the IRS or the Georgia Department of Revenue. Bankruptcy is a powerful tool to fight back!

Remove Junior Mortgages

If you are underwater on your home and have a second mortgage, bankruptcy may allow you to remove the junior mortgage

How Bankruptcy Can Remove Junior Mortgage Liens

“Lien stripping” refers to the process of reducing a secured claim to the value of the underlying collateral. It uses the combined effect of 11 U.S.C.A. § 506(a) and 11 U.S.C.A. § 506(d) to bifurcate the lien into secured and unsecured. The secured lien is allowed in the amount up to the fair market value of the property at the time of the stripping. The balance of the lien, which exceeds the fair market value of the property, is now deemed unsecured.

Through a lien strip, the bankruptcy court essentially takes your second mortgage (which is a secured debt where the lender can foreclose on your property if you miss your payments) and converts it to an unsecured debt (just like a credit card debt) by ordering the lender to remove its lien from the property.

Successful lien stripping in a Chapter 13 bankruptcy involves two essential components: You must prevail on a lien stripping motion, and you must finish your repayment plan.

To strip a lien in Chapter 13 you will need to do the following:

  • Obtain a written appraisal of your home to confirm that you are underwater on your home.
  • File and defend a Motion to Strip Lien in federal bankruptcy court.
  • Complete your chapter 13 case.

Lien stripping is a very complex legal process and you need an expert Georgia bankruptcy attorney to walk you through this process and present your facts to the bankruptcy court.

How Bankruptcy Can Consolidate Debt Interest Free

If you are struggling to make your monthly credit card and loans you may be at the point where you realize that the crushing amount of interest that you are paying each month is preventing you from making a serious debt in the repayment of that debt. Chapter 13 bankruptcy can allow you to instantly stop the interest from accuring and allow you to structure your own repayment plan under the protection of the federal government.

Unlike non-bankruptcy debt consolidation programs, Chapter 13 clients will not pay any taxes on any debt discharged and the interest rate on the unsecured debt is instantly reducted to 0% once the case is filed.

While there are some valid debt consolidation companies out there, there are many companies out there that simply can’t deliver on their promises and the client ends up in worse shape (and in more debt) than when they started.

We meet with many clients who saw a commercial on television for debt settlement and enrolled in a program. They get set up a monthly payment which is support be going towards an escrow account to settle the debt eventually. The calls may stop for a few months but the client’s credit is being damaged because with no payments being paid, the creditor will continue to report deliquencies.

  • Chapter 13 debt consolidation plans mean 0% interest.
  • All creditors have to participate in the Chapter 13 Plan under the law.
  • Chapter 13 clients do not have any tax consequences for discharging their taxes.

When considering debt settlement assistance, either through a company or a qualified lawyer, be sure to do your research! Avoid companies that add on ongoing fees or even require high up-front fees. You will also want to be wary of anyone who promises to fix your credit score. The only way to remove negative information from your credit score, is if it is inaccurate. Finally, guaranteed results are also a red flag to be mindful of, as the company cannot promise that a creditor will settle your debt for any amount.

Consolidate Debt

Consolidating your debt under Chapter 13 can save you thousands of dollars and help you avoid the tax consequences of a non-bankruptcy settlement program

Any more questions? Just Ask Below!

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Talk to an Expert Georgia Bankruptcy Lawyer About Your Options