Without a doubt, bankruptcy is the biggest, blackest mark that can affect your credit score in the state of Georgia. However, there is considerable misinformation on this point. So, in most cases, the pros of filing bankruptcy always outweigh the cons. These pros are outlined below.

For example, bankruptcy does not “ruin” your credit. Most people in Georgia who file bankruptcy already have very low credit scores. And, bankruptcy looks better on credit reports than repossessions, foreclosures, and other entries which indicate that the debtor simply gave up. If people file bankruptcy, especially Chapter 13 bankruptcy, at least they did something.

Of course, there are always downsides to bankruptcy. An experienced Georgia bankruptcy lawyer can review these downsides with you and give you accurate information, so you can make the best choice for your family or your business.

Automatic Stay

Ask any credible Georgia bankruptcy attorney and they will tell you that it is possible to stop creditor adverse action without filing bankruptcy. But before they issue such orders, most judges demand to see evidence of creditor fraud or negligence. Bankruptcy’s Automatic Stay, on the other hand, does the same thing even without such evidence. Section 362 of the Bankruptcy Code prohibits:

• Harassing phone calls
• Collection lawsuits
• Wage garnishment
• Repossession
• Foreclosure

A few words about repossession and foreclosure. Bankruptcy easily prevents these things, but it does not undo them, at least in most cases. So, if you are behind on house or vehicle payments, you need to file bankruptcy with the help of a Georgia bankruptcy lawyer sooner instead of later.

Generally, the Automatic Stay remains in effect as long as the bankruptcy is pending. So, moneylenders cannot harass debtors as they slowly make catch-up payments over time. Like everyone else, these creditors must wait their turn before they are repaid.

Debt Discharge

The Automatic Stay, which instantly happens when you file bankruptcy, is one of the best reasons to file. Additionally, both Chapter 7 and Chapter 13 discharge most unsecured debts, such as:

• Credit cards
• Medical bills
• Payday loans

Let’s take a closer look at credit card debt. The average household in Georgia has $6,200 in credit card debt. With an average interest rate of 20 percent, it’s almost impossible to pay off that debt. Many families make double or triple the minimum payment, and the principal amount hardly budges.

After bankruptcy eliminates credit card debt, imagine what your family can do with an extra several thousand dollars per year.

Asset Protection and Georgia Bankruptcy Lawyers

Another thing that happens when you declare bankruptcy is that your key assets, such as your house, car, and retirement account, are protected. Unless you file bankruptcy with a Georgia bankruptcy lawyer, creditors could seize these assets and sell them to pay your debts.

On a related note, a Georgia bankruptcy lawyer can show you some advanced asset protection options which make these items easier to pay for. Once again, bankruptcy saves you money.

Rebuilding Credit

The official bankruptcy filing notice usually remains on your credit report for seven or ten years, depending on the facts of the case. However, individual negative information, such as debts discharged in bankruptcy, fall off much sooner. Additionally, debtors have the chase to immediately rebuild their credit scores.

Typically, moneylenders cancel all credit cards after debtors file bankruptcy. One of the best ways to increase a credit score is to acquire a new card. Charging something every month and paying off the balance every month is the best way to show that you can responsibly manage credit. And, that’s the essence of a credit score.

Also, remain current on all secured debts. Paying such debts on time directly affects your score. If possible, make thirteen payments a year. An extra $50 a month could save you thousands of dollars in interest payments, especially if the loan does not have a prepayment penalty.

Get Expert Legal Help for Filing Bankruptcy in Georgia

A number of good things happen when you file bankruptcy. For a free consultation with an experienced Georgia bankruptcy lawyer, contact Morgan & Morgan, Attorneys at Law, P.C. at (706) 843-2905. Convenient payment plans are available.