The burden of not being able to pay all your bills each month creates significant stress. Fortunately, you may be able to find financial freedom by petitioning for bankruptcy. If you decide this is the right step to take, you must decide which type is most suitable for your specific situation. There are two basic options: Chapter 7 and Chapter 13. Since 1983, Lovett Bennett Jr., Attorney at Law has been offering the residents of Statesboro, GA, sound legal advice and effective representation in a variety of practice areas. Below, he explains a few key elements to know about each kind of bankruptcy.

Personal Bankruptcy Options

Chapter 7 Bankruptcy

A Chapter 7 bankruptcy absolves you of all your dischargeable debt once your case is over. However, this is considered a liquidation bankruptcy, which means you may be required to use some of your assets to repay creditors. In Georgia, exempt assets typically include a portion of your homestead, vehicle, and personal belongings, child support, public benefits, pension and retirement accounts, and insurance proceeds. To qualify for Chapter 7, you will have to pass a means test that shows you earn less than the average income in Georgia for a household of the same size.

Chapter 13 Bankruptcy

If you aren’t eligible to file for Chapter 7 or don’t want to risk losing your assets, you may decide to file for Chapter 13 instead. This involves developing a repayment plan, usually over a period of three to five years, during which you continue to make payments to your creditors at a monthly rate you can afford. At the end of the agreed-upon time, any remaining balances you have on unsecured debts will be discharged. Student loans and back income taxes are not considered dischargeable, so if these make up the majority of your debt, Chapter 13 may be the better choice.

The decision to file a Chapter 7 or Chapter 13 bankruptcy will depend on the unique circumstances surrounding your finances. It’s best to consult with an attorney to determine which one you would benefit from more. Lovett Bennett Jr., Attorney at Law will work with you to determine the best solution and ensure your rights are protected while you get back on track. Call the team today at (912) 764-3122, or visit his website to request a consultation.