Largely depending on your income, Chapter 13 bankruptcy usually takes three or five years in Georgia. However, as outlined below, it’s usually possible to extend this time period. It’s also often possible to exit bankruptcy early.

Over the course of thirty-six or sixty months, Chapter 13 debtors pay off secured debt arrearage, like past-due mortgage payments, and other allowed claims. The repayment plan is income based. Debtors remit a monthly consolidation payment to the trustee (person who oversees the bankruptcy for the judge) who then distributes the money among allowed claims. “Allowed claims” usually includes secured debt arrears, administrative costs, and a few other obligations.

The Chapter 13 process is rather complex, especially if you own property. However, a Georgia bankruptcy lawyer makes the process much easier. An attorney knows how to complete the paperwork, and a lawyer represents you at the confirmation hearing and other court appearances. Furthermore, only a Georgia bankruptcy lawyer can give you solid legal advice.

Georgia Bankruptcy 101

Chapter 13 is much more than a repayment plan. It offers relief from aggressive creditors, thanks to the Automatic Stay. Section 362 of the Bankruptcy Code prohibits most types of creditor adverse actions. Examples include:

• Foreclosure,
• Wage garnishment,
• Eviction,
• Collections lawsuits,
• Repossession, and
• Creditor harassment.

Since the Automatic Stay usually remains in place for the entire protected repayment period, creditors usually must accept whatever payments the trustee authorizes. Creditors cannot pressure debtors into paying more money or paying it faster.

Creditors can sometimes bypass the Automatic Stay. However, even if they get around it, they usually cannot touch your key assets, such as:

• Car,
• House,
• Retirement account,
• Personal property, and
• Government benefits, such as Social Security benefits.

Usually, creditors can bypass the Stay if the debtor threatens the collateral in some way (e.g. I’m going to burn down the house). Even in these cases, a Georgia bankruptcy lawyer can usually block these requests.

Extending a Chapter 13 in Athens, GA

Truthfully, I do not immediately recall a client who wanted to extend a Chapter 13, at least formally. Many people throw parties when they make their final payments. However, many people need to extend Chapter 7, for one reason or another. This same procedure, which is called a Chapter 20 bankruptcy, is usually available for Chapter 13 extensions.

Assume Franklin falls behind on student loan payments. He files a pro se Chapter 7, hoping to discharge them. However, student loans are priority unsecured debts which are only dischargeable in some situations. Since Franklin does not have a Georgia bankruptcy lawyer advocating for him, the judge denies his request.

In many jurisdictions, Franklin could immediately file a Chapter 13 after the judge closes the Chapter 7 (hence the Chapter 20 nickname). Franklin could not receive a Chapter 13 discharge. But he does not want or need one. He just needs time to catch up on his loan payments.

All that being said, some Chapter 13 debtors informally continue their bankruptcies. They keep making their monthly debt consolidation payments. But instead of paying the trustee, they pay themselves. After two or three months, they usually have a financial reserve which is large enough to cover most unanticipated expenses.

Georgia Bankruptcy Lawyers and Ending a Chapter 13 Early

Three or five years is a long time. Financial circumstances almost always change during the repayment period. Frequently, they change drastically. In these situations, exiting Chapter 13 early is usually an option.

If your financial circumstances worsen, you might be eligible for a hardship discharge. The judge usually grants these motions if a Georgia bankruptcy lawyer shows:

• Permanent Changed Circumstances: Job loss and other temporary income disruptions might not be sufficient. Permanent changes, such as divorce or disability, ate a different situation. Debtors have the burden of proof on this point.
• Adequate Payment to Unsecured Creditors: Credit card companies and other unsecured creditors must have received as much money as they would have received in a Chapter 7. Usually, this prong is not hard to establish. Most of these unsecured creditors get little or nothing in a Chapter 7.
• No Possible Modification: Some debtors can reduce their debt consolidation payments and still pay off all allowed claims before the protected repayment period ends. A hardship discharge is only available if such modification is impossible.

Sometimes, financial circumstances change in the opposite way. A financial windfall, like an inheritance, or a promotion at work could enable debtors to pay off allowed claims early. There is no prepayment penalty in bankruptcy, and these debtors usually do not need the court’s permission. However, the trustee might ask some questions about the source of the funds.

An Athens Bankruptcy Lawyer in Georgia Can Estimate Your Time in Chapter 13

Are you wondering how long does a Chapter 13 bankruptcy take in Georgia? Chapter 13 usually, but not always, takes three to five years. For a free consultation with an experienced Georgia bankruptcy lawyer, contact Morgan & Morgan, Attorneys at Law, P.C. Convenient payment plans are available.

Christopher Ross Morgan

Christopher Ross Morgan

Christopher Ross Morgan focuses on bankruptcy cases, specifically Chapter 7 and Chapter 13 cases. Christopher also takes on Disability and Workers’ Compensation cases. As one of the most accomplished Chapter 7 and Chapter 13 attorneys in Athens, Georgia, he has fought cases through jury trials and argued cases in front of the U.S. District Court, Northern and Middle District of Georgia.