Wednesday, October 2, 2013

What Type of Bankruptcy Should I file?

What Type of Bankruptcy Should I file in Georgia?

If you or a loved one is considering filing for bankruptcy in Georgia, it’s important to understand the types of bankruptcy available to you. There are two main types of bankruptcies available to individuals: Chapter 7 and Chapter 13.  Your bankruptcy attorney will assist you in deciding which is best for you.

Chapter 7 bankruptcy is also known as liquidation or straight bankruptcy. With Chapter 7, the court discharges, or forgives, your debts without a repayment plan. You must utilize “exemptions” to be able to keep your property.  Most Chapter 7 cases are “no asset” cases, in which a debtor has no unexemptable assets and is able to discharge all of his debts.  A trustee will be appointed by the bankruptcy court to review your assets.  In most cases, you will be able to use exemptions to keep your property and your debt will be discharged.

Chapter 13 bankruptcy is a repayment bankruptcy to protect your secured debts and pay them off over a period of time (up to 5 years).  Debtors who have unexemptable assets usually file Chapter 13 to protect all of their property.  This allows you to keep most or all of your assets.  Debtors without unexemptable assets may also choose Chapter 13 over Chapter 7 for other reasons (usually to catch up on delinquent secured debt payments, like car or mortgage payments).

Other forms of bankruptcy are rare for individuals.  You may have other questions about filing bankruptcy. King and King can help. Please call us at 404-524-6400 for a free consultation or visit our website for more information.