The majority of people say that the coronavirus pandemic has brought additional financial stress into their lives. In many cases, this stress causes Post Traumatic Stress Disorder-type symptoms. These people are sorely in need of a financial fresh start, which is what happens at the end of Chapter 13 bankruptcy.

This fresh start does not happen overnight, and that is the way things should be. Chapter 13’s fresh start is usually either three or five years in the making. During this time, debtors acquire the habits they need to weather the financial storms of life, such as serious illness and job loss. Typically, one of these storms prompted the debtor to file Chapter 13 in the first place.

An Athens bankruptcy lawyer stands by debtors before, during, and after the bankruptcy. So, this partnership is a much better option than a do-it-yourself bankruptcy, which is like filing a tax return without the instructions, or working with a bankruptcy petition preparer, who can only fill out forms.

Asset Protection During Bankruptcy in Athens, GA

This element of a Chapter 13 bankruptcy is essential to a fresh start. If debtors lose most or all of their assets, which could happen outside bankruptcy, debtors must go back behind the financial starting line. That outcome is contrary to the Bankruptcy Code.

Bankruptcy exemptions generally vary in different states, and Athens has some of the broadest exemptions in the Union. Some of these exemptions include:

• Home Equity: Married filers may exempt up to $43,000 of home equity. There is a big difference between equity amount and the home’s as-is cash value. Unless the owners have occupied the house for more than about ten years, they usually have virtually no equity in the property.
• Motor Vehicle Equity: This exemption amount is $5,000. Generally, most new vehicles have high values, but the owners have almost no equity in the property. Used vehicles often have considerable equity but practically no financial value.
• Personal Property: Pretty much everything in your home is exempt as well, even jewelry and other somewhat valuable items. A combination of exemptions protects this property. Additionally, items like furniture and electronics have almost no market value.
• Government Benefits: Social Security payments and other government benefits, such as workers’ compensation benefits, are exempt as well. This exemption is good news for older adults, many of whom rely almost exclusively on Social Security benefits to pay their bills.
• Retirement Accounts: The Supreme Court recently affirmed that 401(k)s, IRAS, and other earned nest egg accounts are 100 percent exempt. This exemption is important from both a financial and emotional standpoint. These accounts usually represent future economic security.

Athens law also contains a wildcard exemption, which could apply to otherwise nonexempt property, such as a vacation cabin or cash in a savings account.

Debt Repayment in Georgia

When debtors file their voluntary petitions, the Automatic Stay usually takes immediate effect. It usually remains in place until the judge closes the case. So, debtors can gradually erase secured debt arrearage, such as past-due mortgage payments, on their own terms.

Thus, when the bankruptcy ends, debtors have a zero past due balance on their home mortgage and other secured debts. That’s the essence of a fresh financial start.

During the protected repayment period, an Athens bankruptcy lawyer can often use legal loopholes, like a strip-off or cram-down, to reduce the amount of debt the family must repay. So, in many cases, debtors get more than a fresh start. They get a head start.

Debt Discharge in Georgia

At the end of a Chapter 13 bankruptcy, the judge discharges most unsecured debt, such as medical bills and credit cards.

Some unsecured debt, such as back taxes and student loans, are dischargeable in limited situations. So, an Athens bankruptcy lawyer must advocate for the debtor in court. For example, student loans are dischargeable if the debtor has an undue hardship.

“Discharge” means the judge eliminates the legal obligation to repay the debt. However, the debt itself remains. So, an Athens bankruptcy lawyer must separately address the collateral consequences of debt. Assume Mary owed back taxes. Before she filed bankruptcy, the IRS filed a lien. Even if an Athens bankruptcy lawyer obtains a debt discharge order, the lien remains until the IRS agrees to release it.

Get in Touch with an Athens Bankruptcy Lawyer in Georgia

What happens at the end of a Chapter 13 bankruptcy is that your family gets a fresh start. For a free consultation with an experienced Athens bankruptcy lawyer, contact Morgan & Morgan, Attorneys at Law, P.C. at (706) 843-2905. 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.