Part I: Bankruptcy Protection

Purpose of Bankruptcy: First, bankruptcy is intended to give an honest debtor a “fresh start” in life by relieving the debtor of most debts. Secondly, bankruptcy repays creditors in an orderly manner to the extent that the debtor has property available for payment.

Not all Debt is Dischargable: A debt that cannot be eliminated in bankruptcy is called a nondischargeable debt. There are various nondischargeable debts. Examples include debts for alimony or child support, certain taxes, debts for most government funded or guaranteed educational loans or educational benefit overpayments, and debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs.

Two Main Options for Immediate Debt Relief: The two primary forms of Personal Bankruptcy are Chapter 7 and Chapter 13.

Chapter 7: often called a liquidation, allows debtors a fresh start by requiring them to relinquish non-exempt assets, which are liquidated to pay creditors. In return debtors usually receive a discharge of their debt with the exception of certain types of nondischargeable debt. This form of bankruptcy provides for relatively quick elimination of most debts and does not require payments to creditors after the bankruptcy filing, as chapter 13 does. However, consumers with income over certain amounts may not be eligible to file a chapter 7. Credit reporting agencies may report a chapter 7 bankruptcy for up to 10 years.

Chapter 13: is designed for an individual debtor who has a regular source of income. This type of bankruptcy often enables the debtor to keep a valuable asset, such as a house. The debtor proposes a “plan” to repay creditors over time, usually three to five years. Unlike in chapter 7, debtors are not eligible to have their debts discharged in the beginning of the case. Credit reporting agencies may report a chapter 13 bankruptcy for up to 10 years. 

Consequences of Bankruptcy:

-Credit reporting agencies may include bankruptcies on a credit report for up to 10 years

-Some creditors will extend credit after a consumer files for bankruptcy but loans may be difficult to obtain and interest rates and fees for services may be very high

-Landlords, insurance companies and other service providers may also decline or re-price products and services based on credit history

To learn more about “Bankruptcy Basics” contact us at Rouse & Co., LLC for a case evaluation. Let us put our experience and talents to work for you today.

Rouse & Co., LLC Attorneys at Law is an established Bankruptcy Law firm that serves clients in Atlanta, Georgia as well as Snellville, Loganville, Lawrenceville, Lilburn, Suwanee, Duluth, Norcross, Buford, Monroe, Conyers, Convington, Stockbridge, Riverdale, Jonesboro, Fayetteville, Douglasville, Decatur, Doraville, Tucker, Fairburn, College Park, East Point, Peachtree City, Midtown Atlanta, North Atlanta, Buckhead, Marietta, Forest Park, Smyrna, Vinings, Mableton, Union City, Roswell, and Sandy Springs; we serve communities in a variety of counties including but not limited to: Gwinnett County, DeKalb County, Clayton County, Henry County, Newton County, Rockdale County, Walton County, Fayette County, Fulton County, Douglas County, and Cobb County. Call us for immediate legal help at reasonable, fair, and inexpensive prices, cost, and/or fees. 
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