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Do I have any other options besides filing for a Georgia bankruptcy?

| December 31, 2019

No one wants to file for bankruptcy. However, for many people dealing with constant financial stress, filing for a Georgia bankruptcy is a very good alternative to the status quo. Of course, before filing for bankruptcy, you should be sure that it is the best option for you and your family.

Whether bankruptcy is the best option for you depends largely on what type of relief you are seeking. For many, the seemingly non-stop harassment of creditors is a motivating factor to file for bankruptcy. However, state and federal laws govern creditors’ attempts to collect a debt, and do not allow for them to engage in abusive or harassing conduct. For example, if you inform a creditor in writing that you do not want to be contacted over the phone, they must stop calling you. If a bill collector crosses the line and repeatedly violates state or federal law, you may have a claim under the fair Debt Collections Practices Act. Of course, this will not do much in terms of reducing the underlying debt.

Another consideration is the amount of assets that an individual owns, as well as their income. Creditors may be willing to work with those who have significant assets and a reliable monthly income, putting them on a repayment plan. This can help you keep your assets and avoid filing for bankruptcy.

For those without significant assets, filing for Chapter 7 bankruptcy may be a good alternative. In a Chapter 7 bankruptcy, all nonexempt assets are sold and the proceeds used to pay off the filer’s debt. However, for many individuals with few assets, most of their property is considered exempt. As a result, these individuals are often able to retain most of their property throughout the bankruptcy and will enjoy a fresh start once the bankruptcy is complete.

Individuals who own nonexempt assets and would like to keep them can also consider a Chapter 13 bankruptcy. In a Chapter 13 bankruptcy, the court consolidates the individual’s assets, restructures some debt, and puts the filer on a manageable repayment plan. Often, loans principle amounts are reduced and the interest rate lowered. Of course, Chapter 13 bankruptcy is only a good option for those with a reliable income, because most secured debt must be paid back over a period of three to five years.

Debt counseling may be an option for some who are behind on their bills. Debt counseling is similar to filing for a Chapter 13 bankruptcy, in that an agency will help you come up with a repayment plan to pay your debts. However, unlike a Chapter 13 bankruptcy, debt management programs usually require you to pay all your debts back in full, rather than a reduced amount. Additionally, debt repayment programs require the continued consent of all creditors, and a single creditor can pull the plug on the plan after even a single missed payment.

The decision to file for bankruptcy is not an easy one, but it is a decision that benefits millions of Americans each year. At the Georgia bankruptcy law firm of Morgan & Morgan, P.C., we represent clients who want to create a fresh financial start by walking them through the bankruptcy process. To learn more about how we can help you with your situation, call (706) 752-7089 today.

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