For many people dealing with persistent financial stress, bankruptcy is the best option to get started toward a new financial future. While filing for bankruptcy carries some consequences, and it is not a decision that should be taken lightly, many people avoid filing for bankruptcy assuming that the consequences of bankruptcy are worse than they are in reality. It is important for those who are filing for bankruptcy to have a thorough understanding on the effects that it will have on their life so that they can make an informed decision about what is best for their future.

In a Chapter 7 bankruptcy, the filer’s assets are gathered and sold by the bankruptcy trustee. The proceeds from these sales are used to pay back the creditors. However, contrary to what many believe, filing for bankruptcy will not result in a filer losing all of their property. Georgia bankruptcy law allows for filers to claim exemptions. Exempt property will not be part of the bankruptcy proceeding and will not be sold to pay off creditors. Some exemptions may allow filers to keep their home, car and other important personal property. In some Chapter 7 bankruptcies, called no-asset bankruptcies, filers do not have any nonexempt property and are not required to liquidate any of their assets.

Another common misconception is that a bankruptcy will result in irreparable damage to the filer’s credit and will show up on a filer’s credit report for life. While bankruptcy will result in a reduction in a filer’s credit score, that reduction will not be permanent. In fact, those who file bankruptcy can immediately begin to rebuild their credit through the use of secured credit cards and bank accounts. Additionally, the longest amount of time a bankruptcy can remain on a credit report is for ten years. And often, filers can get bankruptcies removed from their credit report after just seven years.

If you are unsure whether you qualify for a Chapter 7 bankruptcy, or need assistance weighing your options, contact the dedicated bankruptcy lawyers at Morgan & Morgan, P.C., we have extensive experience assisting clients put their financial woes behind them and begin with a fresh start.

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