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Hands around a tiny house with a bankruptcy form and pen nearby


John E. Pytte Oct. 22, 2020

Your debts are overwhelming you, and you dread retrieving the mail to see another bill arrive, or answering the phone just to be bugged about overdue payments. Millions of Americans have found themselves in this position. Though personal bankruptcies in Georgia have fallen steadily over the past decade, with the current pandemic and associated furloughs and layoffs, many more may be facing the inability to keep up with bills.

Debt can be an endless cycle of juggling bills you can’t pay while accumulating even more debt and interest. You know something has to change but bankruptcy feels like it should be a last resort. “Filing bankruptcy means I’ve failed, and I can lose my house and my car!” is a common feeling.

Despite these natural fears, bankruptcy can be the fresh start you need and is generally a painless and quick process. It can instantly stop harassing phone calls and help you keep the things in your life that matter most. Most of all, it’ll help you hit the reset button on your financial and emotional well-being.

If you’re facing a debt cycle like this in Savannah, Hinesville, or neighboring counties throughout Georgia, help is at your fingertips. Pytte Law has the experience and resources necessary to help you get your life back on track and financially balanced. My team and I will guide you through all the steps to resolving your crisis quickly and painlessly.

Chapter 13 Bankruptcy: Debt Consolidation

Under federal law, individuals have two options when it comes to personal bankruptcy, Chapter 13 and Chapter 7. The first option offers you a debt consolidation formula; the second relieves you of all debt in one fell swoop. The differences are important and will depend upon your situation.

Chapter 13 is also known as reorganization, usually meaning a reduction in your debt load, ending with a single, workable monthly payment stretched over three to five years. Certain creditors receive only a fraction of what they’re owed, while others may see the debt totally eliminated. However, your obligations cannot exceed $383,175 in unsecured debt and $1,149,525 in secured debt.

Under this chapter of the bankruptcy code, you generally won’t face forfeiting any assets, such as a home or car, so long as your payments are kept current.

Chapter 7: Instant Debt Forgiveness

Chapter 7 is a blanket tool to relieve you of all your unsecured debts. Secured assets like houses and cars you can generally retain so long as you keep current on the payments, or make up any late payments.

Though your unsecured debts are instantly eliminated, this chapter of the bankruptcy code also can involve liquidation of some assets. In other words, some assets may be sold to pay off creditors, but there are exemptions. For instance, your furniture, clothing, retirement accounts, bank accounts, life insurance, car, and tools are likely exempt.

Most Chapter 7 bankruptcy filers may keep a home if they are current on their mortgage payments and they don't have too much equity. It is likely that a debtor will lose their home in a Chapter 7 bankruptcy if there is a significant amount of equity that the trustee can use to pay creditors. For individuals planning to walk away, filing a Chapter 7 may delay the foreclosure for a short period.

Since 2005 when the code was rewritten, there is also an income test, but at least 96 percent of all Chapter 7 filers easily qualify. Also, if you previously filed a Chapter 7, you must wait eight years before filing again. For Chapter 13, the window is four years.

What If My Car Has Been Repossessed?

In Georgia, generally, you have a 10- to 14-day redemption period after your vehicle has been repossessed to reclaim it. Once you file bankruptcy, the creditor can be contacted and informed that the vehicle is under bankruptcy court protection. However, it is always preferable if consumers keep their creditors informed of their situation and of their desire to keep the vehicle to help avoid repossession in the first place.

Seek the Best Representation for Your Bankruptcy Case

Don’t face overwhelming debt and possible bankruptcy alone. At Pytte Law, we will provide the guidance and dedication you need. Your property and future livelihood are too important to risk. Call for a free consultation and let me help you fight to take back control of your finances. I proudly serve clients in Savannah, Hinesville, Richmond Hill, and the surrounding counties throughout Georgia.