For many distressed debtors, bankruptcy is an absolute last resort after they exhaust all other options. That’s technically true. However, since the Supreme Court recently struck some key consumer protections from the Fair Debt Collection Practices Act, there are not many other options available.

If you are more than one payment behind on a secured debt, such as a home mortgage, you should consider Chapter 13 bankruptcy. That’s especially true in non-judicial foreclosure states like Georgia. Lenders can carry out foreclosure proceedings without any judicial oversight. They must only file paperwork.

As for unsecured debts, if you owe more than about $5,000, you should consider Chapter 7 bankruptcy. Realistically, amounts larger than that are impossible to pay off. That’s especially true since many creditors no longer offer payment arrangements, due to the aforementioned FDCPA rollbacks.

If all this sounds confusing, an Athens, GA bankruptcy lawyer can go over all your legal options. Bankruptcy petition preparers cannot offer this kind of advice. And DIY filers are completely on their own. Besides, an attorney does more than point you in the right direction. An attorney stands up for you in court.

Bankruptcy Halts Adverse Action

Civil court judges technically have the power to stop creditor adverse actions. But they rarely do so, unless the debtor presents overwhelming evidence of fraud or other misconduct. 

Section 362 of the Bankruptcy Code is different. In most cases, this provision immediately halts adverse action, such as:

• Foreclosure,
• Creditor lawsuits,
• Repossession,
• Harassing phone calls, and
• Wage garnishment.

Debtors need not prove fraud or anything else to take advantage of the Automatic Stay. Creditors can only bypass the Stay if the bankruptcy judge grants special permission. And, if the debtor has a strong attorney, such permission is not easy to obtain.

The Automatic Stay halts adverse action, but it does not reverse it. Once repossession and foreclosure occur, they are quite difficult to undo. So, as soon as creditors make these threats, you should probably file bankruptcy.

Bankruptcy Puts You in Control

Serious debt problems are incredibly stressful. Typically, these debtors feel they do not control their own personal finances. And, if creditors threaten repossession and foreclosure, that’s largely true. Bankruptcy reverses this dynamic, and auto loans are a good example.

Most people want to retain their cars, which means they must keep making payments. Therefore, they typically reaffirm these debts. Reaffirmation gives an Athens bankruptcy lawyer the chance to renegotiate payment terms, like the interest rate.

Outside bankruptcy, moneylenders rarely make favorable deals. They hold all the cards. However, if the debtor files bankruptcy, the lender knows the debtor can walk away from the debt. That move leaves the creditor with nothing but a used car that no one probably wants. As a result, the moneylender often makes a favorable deal, so the borrower will keep making payments.

Debtors also control the type of bankruptcy they file. At almost any time, they can convert from Chapter 7 to Chapter 13 or vice versa. In a nutshell, Chapter 7 quickly gives families a fresh financial start and Chapter 13 gives families the time they need to erase debt delinquency.

Bankruptcy Protects Assets

In board games like Monopoly, bankruptcy is the end. Once players declare bankruptcy, they surrender all their property and have no hope of re-entering the game.

Fortunately, the real world is substantially different. Most Georgia bankruptcy debtors keep most of their property. The Peachtree State has some of the most generous bankruptcy exemptions in the country. Examples include:

• Home equity,
• Retirement nest egg accounts,
• Motor vehicles,
• Personal property,
• Government benefits, including Social Security benefits,
• Insurance proceeds,
• Child and spousal support funds, and
• Most of their current wages.

Additionally, Georgians can exempt certain other property, such as vacations homes and boats, which are not normally exempt under state law.

Conclusion

The bottom line is that bankruptcy is designed to give your family a fresh financial start. That cannot occur if creditors harass you, moneylenders control your finances, or you lose important assets. So, bankruptcy in general addresses all these things. A good lawyer makes sure your legal and financial rights are protected.

Seek Solid Legal Advice from an Experienced Bankruptcy Attorneys in Athens, GA

Contrary to the common notion, bankruptcy does not mean desperation. In fact, it is a second chance that will help ease your financial burden and rebuild your credit according to bankruptcy laws. In some cases, it can help minimize or even eliminate your debts, protect your assets, and keep collectors and their phone calls away. If debt causes stress and there is no other way out, you should file bankruptcy. For a free consultation with an experienced bankruptcy lawyer in Athens, contact Morgan & Morgan, Attorneys at Law P.C. at (706)-843-2905. We routinely handle matters in Clarke County and nearby jurisdictions.