Georgia bankruptcies are down, but many still feel the pinch

While it might be true that Georgia residents are starting to see a bit of improvement in the area of job growth, many are still facing financial struggles. According to The Atlanta Journal-Constitution, Georgia's overall bankruptcy filings have dropped 15 percent; however, the state still holds the number two spot nationwide for filings.

The article credits low interest rates, a dip in consumer credit debt and job growth with lowering the state filing numbers; yet, the lower numbers do not mean much to those who are currently facing wage garnishments, foreclosure of their homes or repossession of their vehicles. They may be trying to determine whether or not bankruptcy is the best option for them, and if so, what type of bankruptcy filing will best suit their needs.

How bankruptcy works

In general, there are two kinds of debts: unsecured and secured. Unsecured debts are those that are not secured by or attached to any type of guarantee or collateral, such as medical bills and credit card debts. Secured debts are those that have some sort of collateral securing the debt, such as in the case of a home or an automobile.

Filing for bankruptcy can help protect an individual's property and wages from creditor seizures and other actions. Depending on the bankruptcy chapter selected, a person can have certain debts completely eliminated or they might be given the opportunity to repay them over a certain number of years.

Types of bankruptcy

There are several types of bankruptcy filings that both individuals and businesses can utilize for help with getting their finances in order. For consumers, there are two primary types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy filings are a common choice for those seeking to eliminate most, if not all, of their unsecured debts by liquidating any non-exempt property in order to pay off the debts owed.

A Chapter 13 filing is an option for those who have regular income to make payments under a repayment plan that will be approved by the bankruptcy court. A Chapter 13 filing can permit individuals to:

  • Keep their property
  • Stop foreclosure on their homes, in most cases
  • Catch up on payments that have been missed

Chapter 13 reorganizes debts so that individuals no longer have to struggle on a monthly basis. Depending on the situation, repayments plans can last anywhere from three to five years.

Those who are worried about losing their home or car, or those who have a pile of credit card debt might want to consider speaking with a personal bankruptcy attorney who can discuss the options that might be best suited to solving their financial problems.