Who Qualifies for Chapter 13 Bankruptcy? | Cartersville, GA

Who Qualifies for Chapter 13 Bankruptcy in Georgia?

Drowning in Debt in Cartersville, GA? Chapter 13 Bankruptcy Might Be an Option

Facing the complexities of debt can be daunting, especially when considering legal options like Chapter 13 bankruptcy. For residents seeking Chapter 13 bankruptcy in Cartersville, Georgia, understanding who qualifies for this type of bankruptcy is crucial. It is important to note that not everyone qualifies, and the criteria can vary based on income, debt types, and other financial considerations.

Chapter 13 bankruptcy in Georgia is designed for those who have a regular income and can commit to a repayment plan over three to five years. Understanding these requirements can help potential filers in Cartersville assess whether Chapter 13 is the appropriate path for achieving financial stability. By delving into the specifics of eligibility, individuals can make informed decisions about managing their debt and taking steps toward a more secure financial future.

Quick Summary:

  • Chapter 13 bankruptcy in Cartersville, Georgia, offers individuals with regular income a structured repayment plan to manage their debts. Unlike Chapter 7 bankruptcy, which involves liquidation of assets, Chapter 13 allows debtors to retain assets like homes and cars, provided they stay current on payments within the court-approved plan. 
  • To qualify for Chapter 13 bankruptcy in Georgia, individuals must meet several criteria. These include not being a business entity, adhering to specific time limits if previously filed for bankruptcy, completing mandatory credit counseling, filing tax returns for the last four years, and demonstrating sufficient income to cover expenses and repay debts. The process aims to provide a structured path for debt repayment while offering protection against foreclosure and other creditor actions.
  • Chapter 13 bankruptcy offers unique benefits such as stopping foreclosure, lowering secured loan rates, and allowing overdue child support repayment. It manages debt without extra charges, protecting homes and vehicles. Bankruptcy attorneys offer crucial guidance for navigating Chapter 13 and exploring other tailored debt relief options.

Chapter 13 Bankruptcy: A Repayment Plan for Debt Relief

Chapter 13 bankruptcy is a legal process that allows individuals with regular income to create a court-approved repayment plan for their debts. This plan typically lasts for three to five years, during which you make monthly payments to a court-appointed trustee who then distributes the funds to your creditors.

Think of it as a structured way to catch up on your debts and get a fresh financial start. Unlike Chapter 7 bankruptcy, which eliminates some unsecured debts entirely, Chapter 13 focuses on repayment, allowing you to keep valuable assets like your car or house as long as you stay current on your secured debts (mortgages, car loans) within the plan.

In contrast, Chapter 7 bankruptcy is a liquidation process where some of your assets may be sold to pay back creditors. However, Chapter 7 often has stricter income limitations and can leave a lasting mark on your credit score.

How Do I Qualify for Chapter 13 Bankruptcy in Georgia? 

While Chapter 13 offers a path to financial recovery, there are specific requirements you need to meet to be eligible. Here’s a breakdown of the key factors to qualify for Chapter 13 in Georgia:

You Are Not a Business

Any individual and sole proprietors with regular income can file for Chapter 13 bankruptcy. If you own a business by yourself or with a partner, you can file for Chapter 13 in your own name for debts you’re personally responsible for. But stockbrokers and commodity brokers can’t file for Chapter 13.

Companies like corporations and LLCs cannot file for Chapter 13 and must use Chapter 11 instead.

Previous Bankruptcy Rules

You can file for Chapter 13 even if you’ve had a bankruptcy before, but there are time limits. If you got a Chapter 13 discharge in the last 2 years or a Chapter 7 discharge in the last 4 years, you must wait before you can get a Chapter 13 discharge again.

Recent Bankruptcy Case Dismissals

You can’t file for Chapter 13 or Chapter 7 if your previous bankruptcy case was dismissed in the last 180 days because you didn’t follow court orders, didn’t show up in court, or asked for the case to be dismissed after a creditor tried to lift an automatic stay.

Credit Counseling

You need to get credit counseling from an approved agency within 180 days before filing for Chapter 13. You must show the court a certificate proving you did this. If the agency made a debt management plan, you need to give a copy to the court too.

Debt Limits

Understanding Chapter 13 debt limits Georgia is crucial. To qualify for Chapter 13, your total debts, including both secured debts (like a mortgage) and unsecured debts (like credit card bills), must be less than $2,750,000 when you file for bankruptcy  (11 U.S.C. § 109(e)). 

Tax Returns

You must have filed your state and federal tax returns for the last four years before you can file for Chapter 13. You need to give a copy of your latest federal tax return to the trustee at least 7 days before your first meeting with creditors.

Repayment Plan

You need to have a plan to repay certain debts in full. This includes priority debts like child support and some taxes, and secured debts like a mortgage that must be kept current during the plan.

Repay Unsecured Creditors

You must pay back nonpriority, unsecured creditors (like credit card companies) at least the amount equal to your nonexempt property over the repayment plan. Nonexempt property includes things like household items and some equity in your home or car.

Enough Income to Pay Debts

You must have enough income to cover your expenses, required payments to priority and secured creditors, and payments to unsecured creditors. Your income can include your spouse’s income, wages, self-employment earnings, Social Security benefits, and unemployment benefits. You also need to pay the trustee a commission based on your total payments.

What Are the Benefits of Chapter 13 Bankruptcy? 

Choosing Chapter 13 bankruptcy can help you in ways that other debt relief options can’t. Here are some of the benefits:

  • You don’t have to pay interest on credit card and finance company debt.
  • You won’t get interest or penalties on tax debt.
  • It can stop you from losing your home to foreclosure.
  • It might get rid of a second mortgage.
  • It lowers interest rates on loans backed by collateral.
  • It reduces the amount you owe on secured loans to the value of the collateral.
  • You can pay back overdue child support.

Finding Relief Through Chapter 13 Bankruptcy in Cartersville, Georgia

Drowning in debt can feel overwhelming, leaving you unsure of where to turn. If you’re struggling to manage your finances, Chapter 13 bankruptcy in Cartersville, Georgia may be a solution you haven’t considered. 

However, dealing with the legalities of Chapter 13 bankruptcy can be complex. The Law Office of Jeffrey B. Kelly understands the financial challenges you face. Our Cartersville bankruptcy attorneys can help you determine if you qualify and guide you through every step of the process.

We understand that debt can impact more than just your finances; it can take a toll on your mental and emotional well-being.  We offer compassionate and personalized legal representation, working tirelessly to achieve the best possible outcome for your situation.

Don’t wait any longer to take control of your financial future. Contact the Law Office of Jeffrey B. Kelly today for a free consultation. We can also explore other debt relief options, including Chapter 7 bankruptcy, student loan debt solutions and foreclosure defense. Let us help you find the path to financial freedom.