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Dozier Law Firm, LLC
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Does bankruptcy mean I will lose my house?

Residents of Georgia who face a debt cycle that has become insurmountable often fret about their options. While bankruptcy is well known as a last resort, many do not understand it fully, leading them to attempt credit solutions that don't necessarily help to stop the cycle because they only consolidate debt. The fact is, when it comes to actual relief from your debts, bankruptcy is the only legal measure that operates consistently, with clear and transparent expectations.

Bankruptcy and assets

The first thing to understand about how bankruptcy affects assets like your home is to understand that there are many different types. Some are available only to businesses, but there are two that individual consumers can generally avail themselves of. Those are Chapter 7 and Chapter 13.

Filing for Chapter 7

This is the image of bankruptcy that many have in their minds, if their image of the process is realistic at all. It does involve liquidating your home and other high-dollar assets, but it protects certain personal belongings, like household furnishings. It also protects your personal vehicle, making it ideal for those who are looking for a "fresh start" without any outstanding debt burdens.

Filing for Chapter 13

Chapter 13 is a little more complex, and unlike Chapter 7, it provides you with options that might include keeping your home. This form of bankruptcy involves entering into an agreement to restructure and pay off debts that are behind in certain areas while discharging others. The result is that personal assets like homes do not have to be sold as part of the process.

Understanding your choices

If you are trying to choose between types of bankruptcy, it can be difficult to discern whether or not you qualify for Chapter 7 or Chapter 13, and if you have the choice it can also be difficult to know which is right for you. There are some key differences, beyond the ability to retail home ownership.

  • Chapter 7 filings stay on your credit report for 10 years, and typically one cannot file for Chapter 7 more often than once every seven years.
  • Chapter 13 bankruptcies may be filed as little as two years after the discharge date of a previous filing.
  • Chapter 13 bankruptcies do not see debt discharged until the end of the payment plan, rather than on the date that the judge initially makes an order.

If you are facing bankruptcy, don't guess about how you stand under Georgia law. Get in touch with an experienced attorney who can help you today.

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