A Bankruptcy Lawyers in Atlanta can help you navigate the complex and often complex process of filing for a bankruptcy. It’s not just about liquidating assets, but about also protecting your interests in what would otherwise be considered a personal tragedy. If you have concerns like these, contact us today!
When it comes to dealing with significant debt, getting professional help from Atlanta’s top bankruptcy attorney is always the best option. But before you do that, familiarize yourself with what will happen if you file for Chapter 7 or Chapter 13.
Chapter 7 Bankruptcy – What Happens If You File?
A Chapter 7 bankruptcy is also called a liquidation bankruptcy. It’s when you surrender all your assets and property over to a trustee. You then receive a discharge of all debts that you owed up until the date of bankruptcy. These debts are discharged even if you still possess the assets or property that were attached to them. One way to look at it is that once you file for Chapter 7, all your accounts become “as if” they have been paid in full at the time of filing. Here’s what happens:
1) First, a judge decides whether he or she thinks you’re eligible for Chapter 7 bankruptcy. That’s the first step in the overall process.
2) The next step is to appoint a trustee, who will handle all matters from here on out. The trustee is responsible for collecting all your assets and disposing of them in your name. You don’t have any say over what happens to your property as a result of filing for Chapter 7 bankruptcy, so you must be careful who you choose to work with.
3) Once the trustee has been appointed, he or she will be responsible for doing everything that needs to be done. You’ll receive written notice that tells you everything there is regarding your bankruptcy case.
4) The trustee’s principal job is to ensure that all of your assets are disposed of in a profitable manner. In other words, he or she will be responsible for selling any property that has been attached, and ensuring that you’ll receive the proceeds of the sale.
5) You can keep the proceeds if you like, or you may decide to donate them to charity. Your choice remains yours!
6) Once everything has been sold or donated, all remaining assets are then distributed to you and your creditors. You’ll receive a final payment once all remaining debts have been satisfied. In some cases, this can take as long as nine years to complete.
Chapter 13 Bankruptcy – What Happens If You File?
Unlike Chapter 7, which involves liquidation, Chapter 13 is more of a reorganization. Like Chapter 7, it involves surrendering property to your trustee, but it’s also intended to help you pay back your creditors over time. Rather than liquidate all your assets before handing them over to creditors, you will continue to slowly pay off debts in this case. A number of issues come into play when you file for Chapter 13 bankruptcy:
1) You’ll have to make a plan for how you’re going to pay back your debt over time. Generally speaking, it’s recommended that you keep 1/3 of what would normally be awarded upon filing.
2) You must then contact the court and work with them to determine if you’re eligible for Chapter 13 bankruptcy. In other words, the judge must determine whether or not you have sufficient income to pay back your debts.
3) Once you receive an eligibility decision, a trustee will be appointed. The trustee will receive all your property and assets, as well as any that have been previously attached by creditors.
4) The trustee will then sell off all your property in an effort to satisfy your debts. In some cases, that means selling off property in order to secure cash flow while allowing a primary residence to remain intact. Property is usually sold at auction in order to ensure that it goes for a reasonably high price.
It’s important to get in touch with a professional if you’re considering filing for bankruptcy. Regardless of whether you choose Chapter 7 or Chapter 13, there are many things to consider. The decision you make will have a huge impact on how things turn out – and how easily they can be resolved.