Technically, most Chapter 13 bankruptcies last either three or five years. But their positive effects often last a lifetime.

Mostly because of some recent changes in the law, many moneylenders are more aggressive than ever when it comes to secured debt delinquency. In fact, many Georgia banks do not need a court order to take your house. These same legal changes make it difficult or impossible to stop such efforts, even if lenders clearly overstep the boundaries set by the landmark National Mortgage Settlement.

A Georgia bankruptcy lawyer does more than handle the complex paperwork and stand up for you during meetings and hearings. Attorneys can also unlock some advanced bankruptcy options which, in many cases, could save your family thousands of dollars.

 

Automatic Stay

The Consumer mentioned above Financial Protection Bureau rule only recently went into effect. In banks across Georgia, champagne corks popped in celebration. But the CFPB’s ruling did not affect Section 362 of the Bankruptcy Code. This provision deprives moneylenders of their primary debt collection tactics, such as:

• Foreclosure,
• Bank account levy,
• Repossession,
• Wage garnishment,
• Eviction, and
• Civil lawsuits.

Georgia’s property exemptions provide further protection. A few creditors are able to bypass the Automatic Stay. Even if that happens, your house is protected in Georgia. So is your personal property, retirement account, and motor vehicle.

 

Protected Repayment Plan

Generally, the Automatic Stay remains in effect throughout the protected repayment plan. Depending on your income, the protected repayment period lasts thirty-six or sixty months.

Chapter 13 debtors combine all allowed claims, mostly secured debt delinquency, into one pile. Then, using income-based monthly payments, they gradually chip away at this debt until it reaches zero. As long as the plan meets minimum requirements, the trustee (person who oversees the bankruptcy for the judge) almost always approves it. If that happens, creditors must accept it as well.

 

Who Is Eligible to File Chapter 13 Bankruptcy?

Chapter 13 bankruptcy relief is available to individuals, even those who are self-employed or who run an unincorporated business, as long as they meet certain financial criteria. Currently, someone who wants to file under Chapter 13 must have unsecured debts less than $394,725 and secured debts less than $1,184,200. The debt amounts are adjusted occasionally as the consumer price index changes.

Filing under Chapter 13 isn’t allowed if you’ve had a previous bankruptcy petition dismissed for failure to appear in court or willfully failing to comply with court orders within the last 180 days. There are other circumstances in which you can be ineligible to file under Chapter 13 or any other chapter of bankruptcy.

Within 180 days before filing bankruptcy, you must seek credit counseling from an approved agency, either individually or in a group counseling situation. The US trustee can make exceptions to this rule if they decide there aren’t sufficient opportunities for counseling from approved agencies in your area or if you have an emergency situation. If a debt management plan is developed for you during credit counseling, the plan must be filed with the court.

 

Cost to File Chapter 13

Courts are currently required to charge $235 to file under Chapter 13 and a $75 miscellaneous administrative fee. These fees are due to the bankruptcy court clerk upon filing the case. The court can give permission for the costs to be paid in installments. If permission is granted for installment payments, the courts limit the number of installments to four, and they must all be paid within 120 days of filing with the court.

The fees mentioned above are the minimum court costs for filing under Chapter 13 bankruptcy. It isn’t the total amount that must be paid to file for relief under Chapter 13. These fees do not include attorney’s fees. For information on the final amount you will have to pay to file for Chapter 13 bankruptcy, speak with a bankruptcy attorney to get the full scope of fees due for filing under Chapter 13.

 

How Do the Courts Calculate Your Chapter 13 Plan Payment?

In Georgia, your plan payments will depend on several things. Here are a few of the factors that are considered when determining a chapter 13 repayment

• Mortgage payments. If you’re behind on payments for your mortgage, the arrearage is caught up as part of Chapter 13 proceedings. Doing this allows you to keep your house, but you will be responsible for continuing to pay your mortgage in addition to your payment plan.
• Cars: Depending on the situation, there may be various options when it comes to a car loan and Chapter 13. One of those options is determining if you qualify for lowered car payments. Usually, people pay their car loans through their Chapter 13 plan because it saves money.
• Unsecured Debts: Examples of priority unsecured debts are alimony, child support, back taxes, debts owed to the government (with some exceptions), restitution, and administration fees owed to the Chapter 13 trustee. These priority unsecured debts require payment through the Chapter 13 repayment plan.
• Non-exempt assets: Some assets are considered exempt from bankruptcy proceedings, and others are non-exempt. If you have non-exempt assets, you are required to pay an amount that equals the value or equity of the non-exempt assets toward paying down your debt to unsecured creditors.
• Disposable income: If you have disposable income, you are required to pay that amount toward paying off the debt to unsecured creditors.

Bankruptcy doesn’t satisfy every debt. For Chapter 13 (and Chapter 7), priority unsecured debts must be paid in full. Additionally, if you’d prefer to keep your home, any back mortgage payments must be paid to bring the mortgage current. Chapter 13 plans provide the opportunity for you to pay these debts over the course of three to five years.

 

Bankruptcy Exemptions in Georgia

Exemptions are in place to protect your property’s net equity from being used to increase your payment under your Chapter 13 plan. There are federal bankruptcy exemptions that Georgia has opted out of using. Instead, Georgia residents who have been in the state 730 days before filing for Chapter 13 bankruptcy are subject to Georgia bankruptcy exemptions.

Various properties are covered by the exemptions, including clothing, personal property, homes, automobiles, business equipment, health aids, and retirement accounts. Also, if you’re married and both of you have an interest in the property, the exemption amounts double when filing for bankruptcy in Georgia.

The bankruptcy exemption amounts for Georgia are in GA Code §44-13-100. The allowable exemption amounts are subject to change. If you calculate a Chapter 13 bankruptcy plan, you should ensure that you have the current Georgia bankruptcy exemptions.

 

Monthly Bankruptcy Payment Guestimates

The monthly payment amount varies, mostly depending on the amount of allowed claims. Usually, the payment is about as big as a rent or mortgage payment.

A lot of life-changing events can happen in three or five years. Most people experience substantial income increases or decreases pretty much every year. When life happens, a Georgia bankruptcy lawyer can adjust your debt consolidation payment amount. If you can increase your payments, you can emerge from Chapter 13 early. If they are no longer sustainable, a hardship discharge might be available.

On a related note, a Georgia bankruptcy lawyer can also arrange for you to buy a car, or even a house, while you are still in Chapter 13 bankruptcy.

 

Georgia Bankruptcy Lawyers and Debt Discharge

Chapter 13 does more than give you time to catch up on mortgage and other secured payments. Bankruptcy also discharges (eliminates) many unsecured debts, such as credit cards and medical bills. Imagine what your family can do with the hundreds of dollars a month discharge could save you.

Some unsecured debts are only dischargeable in some situations. That’s where a Georgia bankruptcy lawyer makes a big difference.

Student loans are a good example. These unsecured debts are dischargeable if the borrower has an undue hardship. The Eleventh Circuit, which includes Georgia, narrowly defines “undue hardship.” As a result, many student loan debtors do not even ask for relief.

The judge usually refers the dispute to mediation if a Georgia bankruptcy lawyer files a motion to discharge the debt. During mediation, both sides have a duty to negotiate in good faith. “Sorry, Charlie, you don’t qualify” is not good faith. The bank must compromise to reach an agreement. Therefore, most student loan debtors receive at least a partial discharge, even if they only marginally qualify for one.

 

Bouncing Back from a Chapter 13 Bankruptcy

It’s not easy to make a debt consolidation payment every month. Many debtors who file Chapter 13 are unable to finish, especially if they do not have a Georgia bankruptcy lawyer to stand up for them. Most families must make drastic changes to accommodate the debt payment. They must find an additional source of income or trim expenses to the bone.

The additional financial discipline helps you recover faster from bankruptcy than you ever thought possible. Most former debtors continue making their debt consolidation payments for a few months. But instead of paying the trustee, they pay themselves. After several months, they have a financial reserve that is big enough to weather almost any financial storm.

Chapter 13 ends after five years, but its positive effects are almost never ending. For a free consultation with an experienced Georgia bankruptcy lawyer, contact Morgan & Morgan, Attorneys at Law, P.C. Convenient payment plans are available.

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