An Alternative To Bankruptcy For Georgia Residents

As of 2021, Georgia’s national debt was approximately $16.8 billion, according to the World Bank. This translates to a debt-to-GDP ratio of around 44%, which is considered moderate compared to other countries. In terms of external debt, which refers to the amount owed to foreign lenders, Georgia’s external debt was approximately $5.7 billion as of 2020, according to the International Monetary Fund. This represents a decrease from the previous year, and the external debt-to-GDP ratio was around 15%. According to the United States Courts, there were 10,938 bankruptcy filings in the state of Georgia in 2020. This represents a decrease from the previous year, likely due to the financial impact of the COVID-19 pandemic and various government relief efforts. Of those 10,938 bankruptcy filings, 9,974 were personal bankruptcies (Chapter 7 and Chapter 13), while the remaining 964 were business bankruptcies (Chapter 7 and Chapter 11). Personal bankruptcies in Georgia decreased by 8.7% from 2019 to 2020, while business bankruptcies increased by 12.9%. Overall, Georgia had the 8th highest number of bankruptcy filings among all US states in 2020.

Learn More about the 3 main types of bankruptcy

Bankruptcy Laws in Georgia

Bankruptcy in Georgia is governed by federal law under the Bankruptcy Code, but there are also specific rules and procedures that apply in Georgia. Here is an overview of the main bankruptcy laws in Georgia:

• Chapter 7 bankruptcy: This is the most common type of bankruptcy for individuals in Georgia. It involves liquidating most of your assets to pay off your debts and obtaining a discharge for the remaining debt. To qualify for Chapter 7 bankruptcy in Georgia, you must pass a means test, which determines whether your income is low enough to qualify.
• Chapter 13 bankruptcy: This type of bankruptcy involves creating a repayment plan to pay off your debts over a period of three to five years. Chapter 13 bankruptcy is often used by people who do not qualify for Chapter 7 or who want to keep certain assets, such as a home or car.
• Exemptions: Georgia has specific exemptions that allow you to keep certain property when filing for bankruptcy. These exemptions include a homestead exemption for your primary residence, a motor vehicle exemption, and exemptions for personal property, such as household goods and furnishings.
• Credit counseling: Before you can file for bankruptcy in Georgia, you must complete a credit counseling course from an approved provider. This course is designed to help you understand your financial situation and explore other options besides bankruptcy.
• Bankruptcy court: Bankruptcy cases in Georgia are heard in the United States Bankruptcy Court for the Northern, Middle, or Southern District of Georgia, depending on where you live.

Things To Keep in Mind When Considering Business Bankruptcy in Georgia

If you’re considering business bankruptcy in Georgia, there are several things to keep in mind. Here are a few key considerations:

• Type of bankruptcy: There are several types of bankruptcy available to businesses, including Chapter 7, Chapter 11, and Chapter 13. Each type of bankruptcy has different requirements and benefits, so it’s important to understand which option is best for your specific situation.
• Impact on business operations: Filing for bankruptcy can have a significant impact on your business operations, including potential disruptions to your supply chain, loss of customers or clients, and negative publicity. You should consider how bankruptcy will affect your day-to-day operations and whether you will be able to continue operating your business.
• Debts and assets: Before filing for bankruptcy, you should carefully evaluate your debts and assets. This includes identifying all outstanding debts and determining which assets can be liquidated to pay off those debts. You should also consider any secured debts, such as mortgages or liens, and how those will be affected by bankruptcy.
• Alternatives to bankruptcy: Bankruptcy should be a last resort, and there may be other options available to your business, such as negotiating with creditors or restructuring your operations. You should explore all possible alternatives before deciding to file for bankruptcy.
• Legal representation: Bankruptcy is a complex legal process, and it’s important to have experienced legal representation to guide you through the process. A bankruptcy attorney can help you understand your options, navigate the legal requirements, and protect your rights and interests.

What Debts Are Not Discharged in Bankruptcy?

While bankruptcy can provide relief from many types of debt, there are certain debts that are not discharged in bankruptcy. Here are some examples:

• Certain tax debts: Some tax debts, including recent income tax debts and tax debts for which the debtor filed a fraudulent tax return or willfully attempted to evade taxes, are not discharged in bankruptcy.
• Student loans: In most cases, student loans are not discharged in bankruptcy unless the debtor can demonstrate undue hardship.
• Debts arising from fraud or intentional wrongdoing: Debts arising from fraud, embezzlement, or other intentional wrongdoing are not dischargeable in bankruptcy.
• Domestic support obligations: Debts related to alimony, child support, and other domestic support obligations are not dischargeable in bankruptcy.
• Court fines and penalties: Debts related to court fines and penalties, such as traffic tickets or criminal restitution, are not dischargeable in bankruptcy.
• Debts not listed on the bankruptcy petition: Debts that the debtor fails to list on their bankruptcy petition may not be discharged in bankruptcy.

How Bankruptcy in Georgia Affects Your Credit Score and Ability to Get Future Loans

Bankruptcy in Georgia, like in any other state in the US, can have a significant impact on your credit score and your ability to get future loans. When you file for bankruptcy, it will remain on your credit report for up to 10 years, and it will have a negative impact on your credit score. Your credit score is a numerical representation of your creditworthiness, and it is used by lenders to assess the risk of lending you money. The higher your credit score, the more likely you are to be approved for credit and the more favorable the terms of the credit will be. Filing for bankruptcy in Georgia can result in a significant drop in your credit score, potentially by 200 points or more. This can make it difficult to get approved for new credit, such as loans, credit cards, or mortgages, and may result in higher interest rates and fees if you are approved. In addition to the impact on your credit score, bankruptcy in Georgia can also make it more difficult to get future loans because it signals to lenders that you have had financial difficulties in the past. This may lead lenders to view you as a higher risk borrower, and as a result, they may require more stringent underwriting standards or reject your loan application altogether.

How Does Bankruptcy in Georgia Affect Tax Debts?

Bankruptcy in Georgia can have different effects on tax debts depending on the type of tax debt you have and the chapter of bankruptcy you file. If you have federal or state income tax debts, Chapter 7 bankruptcy in Georgia may provide relief for some of these debts. In order for your tax debts to be discharged, you must meet specific criteria, such as having filed your tax returns on time and not committing fraud or evasion. Additionally, the tax debts must meet specific age requirements, and you must not have had any tax liens filed against you. If your tax debts meet these criteria, they may be eligible for discharge under Chapter 7 bankruptcy in Georgia. Under Chapter 13 bankruptcy in Georgia, tax debts can be included in a repayment plan. This means that you may be able to repay your tax debts over a period of 3-5 years, and any remaining tax debts at the end of the repayment plan may be discharged. It’s important to note that not all tax debts can be discharged in bankruptcy. For example, payroll taxes and trust fund taxes cannot be discharged in bankruptcy. Additionally, tax debts that are secured by a tax lien may not be discharged, but the lien may be removed.

Will You Lose Your Home or Car in bankruptcy in Georgia?

Whether you will lose your home or car in bankruptcy in Georgia depends on several factors, including the chapter of bankruptcy you file, the value of your property, and the amount of equity you have in the property. Under Chapter 7 bankruptcy in Georgia, non-exempt property may be liquidated to pay off creditors. However, Georgia has several exemptions that protect certain types of property, including a homestead exemption that protects up to $25,000 of equity in your primary residence. This means that if you have less than $25,000 in equity in your home, you may be able to keep your home in Chapter 7 bankruptcy in Georgia. Additionally, Georgia has a motor vehicle exemption that protects up to $5,000 of equity in one motor vehicle per debtor. If you have less than $5,000 in equity in your car, you may be able to keep your car in Chapter 7 bankruptcy in Georgia. Under Chapter 13 bankruptcy in Georgia, you can keep your home and car as long as you continue to make payments on them. In fact, Chapter 13 bankruptcy can help you catch up on missed mortgage or car payments through a repayment plan.

Statute of Limitations for Collections in Georgia

In Georgia, the statute of limitations for collections on most types of debts is six years. This means that a creditor or debt collector has six years from the date of the last payment or activity on the account to file a lawsuit to collect the debt. If the statute of limitations has expired, the creditor or debt collector can no longer legally pursue collection of the debt through the courts. It’s important to note that the statute of limitations varies depending on the type of debt. For example, the statute of limitations for written contracts, such as credit card debt or personal loans, is six years in Georgia. The statute of limitations for oral contracts is four years, and for promissory notes, such as student loans, it’s also six years.

Cons of Bankruptcy in Georgia

While bankruptcy can provide relief from overwhelming debt and a fresh financial start for some individuals, there are several potential downsides or cons to consider before filing for bankruptcy in Georgia. Here are some of the cons of bankruptcy in Georgia:

• Damage to credit score: Filing for bankruptcy in Georgia can have a significant negative impact on your credit score, which can make it more difficult to obtain credit in the future or result in higher interest rates and fees.
• Public record: Bankruptcy is a public record, meaning that it can be viewed by anyone who searches public records. This can be embarrassing or stigmatizing for some individuals.
• Cost: Filing for bankruptcy in Georgia can be expensive, and attorney fees can add up quickly. Additionally, if you file for Chapter 13 bankruptcy, you will be required to pay a portion of your debt through a repayment plan.
• Possible loss of assets: Depending on the type of bankruptcy you file and the value of your assets, you may be required to liquidate some of your property or assets to pay off creditors.
• Limited discharge of debt: Not all types of debts can be discharged in bankruptcy, including some tax debts, student loans, and court-ordered judgments.

Compare the Pros and Cons of Bankruptcy: Pros and Cons of Filing Bankruptcy

Why People Regret Filing Bankruptcy

There are several reasons why some people may regret filing for bankruptcy, including:

• Damage to credit score: Bankruptcy can have a significant negative impact on a person’s credit score, which can make it more difficult to obtain credit in the future or result in higher interest rates and fees.
• Stigma: There is a social stigma attached to bankruptcy, and some people may feel ashamed or embarrassed about having filed for bankruptcy.
• Limited discharge of debt: Not all types of debts can be discharged in bankruptcy, including some tax debts, student loans, and court-ordered judgments. This means that some people may still be left with significant debt after filing for bankruptcy.
• Possible loss of assets: Depending on the type of bankruptcy and the value of a person’s assets, they may be required to liquidate some of their property or assets to pay off creditors.
• Long-term consequences: Bankruptcy can have long-term consequences, such as difficulty obtaining credit or financing for a home or car, even after the bankruptcy has been discharged.

Don’t Qualify For Bankruptcy in Georgia? Don’t Panic

If you do not qualify for bankruptcy in Georgia, you may need to explore other options for managing your debt. An alternative to consider is debt settlement. Debt settlement involves negotiating with creditors to settle your debts for less than the full amount owed. This can be a good option if you have a significant amount of debt but cannot qualify for bankruptcy. There are some potential benefits to debt settlement over bankruptcy that may make it a more favorable option for some individuals.

• No bankruptcy on your credit report: Filing for bankruptcy shows on your credit report for up to 10 years. On the other hand, debt settlement does not show as a bankruptcy.
• Cost: Filing for bankruptcy can be expensive, with filing fees, attorney fees, and other costs adding up quickly.
• Emotional Impact: People report horror stories of the negative emotional impact of BK.
• With a bankruptcy for the rest of their life: Employers or lenders can ask if someone has filed BK for the rest of their life. It is much less likely to be asked if one ever used debt settlement to pay back an agreed to amount.
• Control: With debt settlement, you may have more control over the process and negotiations with your creditors, whereas with bankruptcy, a court will make the final decision.
• Less severe consequences: Filing for bankruptcy can have significant consequences, such as the liquidation of your assets, whereas debt settlement may allow you to negotiate a more manageable repayment plan while keeping your assets.

Bankruptcy vs. Debt Relief: What’s Right For You and How We May Be Able To Help

CuraDebt – An Alternative To Consider

CuraDebt, a professional debt settlement firm, is a great alternative to bankruptcy. We have a team of debt professionals who are ready to help you better understand and potentially eliminate your debts. Contact us today for your free consultation. 1-877-850-3328

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