According to the Supreme Court, bankruptcy “relieve[s] the honest debtor from the weight of oppressive indebtedness and permit[s] him to start afresh free from obligations and responsibilities consequent upon business misfortunes.” In other words, if you are honest yet unfortunate, bankruptcy is a fresh start.

Honest Debtors in Athens, GA

Honest debtors are forthright with the court and the trustee (person who oversees the case for the judge). Furthermore, honest debtors do not borrow money without planning to repay it. Unfortunate debtors fall behind on bills largely because of divorce, economic downturn, job loss, or other circumstances which were at least mostly beyond their control.

This fresh start is little more than an opportunity. Only a Georgia bankruptcy lawyer helps you maximize your fresh start. This maximization includes using some little-known tactics to eliminate debt. A bankruptcy lawyer helps you quickly raise your credit score and recover from bankruptcy.

Automatic Stay in Athens, GA

Section 362 of the Bankruptcy Code is an important part of your fresh start. This provision, which normally kicks in as soon as you file your voluntary petition, stops things like:

• Wage garnishment,
• Foreclosure,
• Collection lawsuits,
• Repossession,
• Utility shutoff, and
• Evictions.

Technically, civil judges have the power to stop these things as well. But they only intervene in extreme circumstances. Regardless of the facts, the Automatic Stay gives you the breathing room you need.

Section 362 usually remains in effect until the judge closes the bankruptcy. That could be up to five years. If you are behind on bills, you have plenty of time to catch up without worrying about foreclosure or other adverse action.

Additionally, most people do not need to worry about losing their property. In most cases, most of your assets, such as your house, car, and retirement account, are exempt (protected) when you file.

Trustee’s Meeting in Athens, GA

About six weeks after you file, there is a meeting with the person who manages the bankruptcy for the judge. The trustee has different jobs in a Chapter 7 and a Chapter 13.

Athens Trustee Meeting for Chapter 7

A Chapter 7 trustee does little more than verify your honesty. The trustee reviews financial and other documents to look for evidence of fraud. Assuming there is none, and there usually is not, the bankruptcy judge usually discharges most debts without requiring a hearing. More on that below.

Athens Trustee Meeting for Chapter 13

A Chapter 13 trustee, on the other hand, does much more than these things. The trustee also reviews your income and places you on a monthly payment plan. The debt consolidation payment must be large enough to retire all allowed claims before the protected repayment period ends. “Allowed claims” usually includes secured debt delinquency, like past-due mortgage payments, administrative expenses, and a few other obligations.

Debt Reduction and Elimination in Athens, GA

Bankruptcy does not just protect your family in the short term. Bankruptcy also offers long term protection. Some people choose to repay their debts. This repayment could happen through the monthly debt consolidation payments. Or, debtors could voluntarily reaffirm certain obligations. For example, most debtors want to keep their cell phones. Obviously, you must keep paying to retain them.

Debt negotiation is often an option as well. Usually, creditors hold all the cards in these negotiations. They know they have the means to collect unpaid debts. Bankruptcy turns the tables. Your Georgia bankruptcy lawyer needs to be a good negotiator as well as a good litigator. In this way, it’s like having a professional negotiator handle these talks.

What Is a Bankruptcy Discharge in GA?

Georgia bankruptcy lawyer has leverage with creditors. Creditors know that if they do not make a deal, the judge could discharge the debt, and they would probably get nothing.

“Discharge” means the judge erases the legal obligation to repay a debt. The collateral consequences remain. So, if the IRS filed a tax lien before you filed bankruptcy, a Georgia bankruptcy lawyer must deal with the lien separately, even if the judge discharges the debt.

Past-due income taxe obligations are priority unsecured debts which a Georgia bankruptcy lawyer can only discharge in some situations. The same thing applies to student loans. Unless you have a Georgia bankruptcy lawyer, these debts are almost impossible to discharge.

Other debts, like alimony and child support, are completely non-dischargeable. Once again, a Georgia bankruptcy lawyer can deal with these debts separately, usually with a motion to modify the existing divorce or other family law order.

Ask an Athens Bankruptcy Lawyer How You Can Get a Financial Fresh Start

Bankruptcy can be a fresh start for you and your family. For a free consultation with an experienced Georgia bankruptcy lawyer, contact Morgan & Morgan, Attorneys at Law, P.C. We routinely handle matters throughout the Peachtree State.