How to Protect Your Home and Car in a Georgia Bankruptcy Case

Most Georgia debtors want to make sure that they will not lose their homes and cars when they file bankruptcy. The good news is that, with the help of a qualified Georgia bankruptcy attorney, you can make sure that you will be able to keep your property before you file bankruptcy. Or, you can decide that you do not want to keep your property after you understand how property is affected in bankruptcy.

Always Losing Property In Bankruptcy Is a Common Myth

It is a common myth that you will lose your home or your car or other assets if you file bankruptcy. There are two ways that you can lose property in a bankruptcy: 1. you fall behind on your mortgage payments and the bank forecloses; or, 2. your house has substantial equity and the Chapter 7 bankruptcy trustee wants to sell your house.

However, losing assets to the bankruptcy trustee is a rare occurence for bankruptcy filers. When you file a Chapter 7 bankruptcy case, the trustee does have an interest in your property. However, in most cases, debtors do not have enough valuable property that is subject to taking. Most homes and cars are subject to mortgage and car liens, meaning that they are financed, so if a trustee were to sell the property, s/he would have to pay off the creditor before seeing any profit.

Georgia Bankruptcy Exemptions Protect Property

Further, all property is protected to some extent by the available bankuptcy exemptions in Georgia. Such exemptions are provided to debtors by Georgia law and are usually sufficient to protect your property from liquidation by the bankruptcy trustee. If you do have any unprotected assets, then a bankruptcy lawyer would probably anticipate liquidation in advance and advise you accordingly.

Keep Cars and Homes in Georgia Bankruptcy by Making Timely Payments

Most debtors who file bankruptcy in Georgia risk losing their homes or cars by failing to timely pay the mortgage or car payments. Even though bankruptcy is protective of debtors from foreclosures and repossessions, creditors are allowed to ask the bankruptcy court for permission to proceed with these actions where debtors are behind on their mortgages or car notes. Thus, debtors who wish to keep their homes and cars in bankruptcy must keep making timely monthly payments to the mortgage and car creditors in order to avoid losing their property in a Georgia bankruptcy case.

Chapter 13 Bankruptcy in Georgia is an Alternative That Allows Debtors to Keep Property

One alternative to Chapter 7 is Chapter 13 bankruptcy, which can be filed to avoid the loss of property such as a house or car when you are behind on the payments but want to keep the property. In a Chapter 13, you can roll up your arrears into a consolidated monthly payment with all of your other debt. Chapter 13 is also an option where you have equity in property; to keep such property in Chapter 13 bankruptcy, you are required to repay your unsecured creditors an amount equal to the amount of unprotected equity you have in your property.

If you have questions about whether you can keep your home and car in bankruptcy, call a qualified Atlanta, Georgia attorney or the Law Offices of Charles Clapp at 404.585.0040 for a free consultation.