Bankruptcy allows people who have fallen behind on their financial obligations to regain control. People can avoid aggressive collection efforts by securing an automatic stay when they file for bankruptcy. Creditors must stop calling them, and the courts also typically dismiss pending creditor lawsuits as well.
If the filer completes the bankruptcy process successfully, they can discharge what they still owe on certain eligible debts. People sometimes refer to a Chapter 7 bankruptcy as a liquidation bankruptcy. That name comes from the fact that people sometimes have to allow the courts to sell their assets to repay some of their debts. Do people lose most of their valuable property in a Chapter 7 filing?
Exemptions help people protect their property
Georgia state statutes include numerous exemptions for valuable assets. People can protect home equity and vehicle equity. They can preserve a certain amount of personal property and retirement savings. Those who have accumulated quite a bit of property before experiencing financial hardship may need to evaluate their personal holdings to determine if their assets might be at risk.
While those filing for bankruptcy in some states can use federal exemptions instead of state exemptions, Georgia bankruptcy laws only allow for the use of state exemptions. For many people with limited personal assets, it is possible to complete the Chapter 7 bankruptcy process without liquidating any property at all.
Discussing personal holdings and financial concerns can help people determine whether Chapter 7 bankruptcy might work for them. The proper use of exemptions can allow people to preserve their resources and avoid aggressive collection efforts.