Filing for Bankruptcy: How to Keep Your House in Georgia

Filing for bankruptcy can be a daunting process, especially when you are worried about losing your home. In Georgia, there are specific steps you can take to keep your house while navigating through bankruptcy. Understanding the laws and options available to you is crucial for protecting your property.

Understanding Exemptions in Georgia Bankruptcy

One of the primary ways to safeguard your house during bankruptcy is by utilizing state exemptions. Georgia allows homeowners to exempt a portion of their equity in their home. As of now, the homestead exemption in Georgia permits individuals to exempt up to $35,000 of equity in their primary residence, and up to $70,000 for married couples filing jointly. If you are over 65, the exemption increases, allowing you to keep even more of your equity.

Chapter 7 vs. Chapter 13 Bankruptcy

You also need to decide between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 bankruptcy can lead to the liquidation of non-exempt assets to pay off debts, but if your home's equity falls within the exemption limits, you may be able to keep it. On the other hand, Chapter 13 bankruptcy is a reorganization plan that allows you to keep your home while repaying your debts through a manageable three to five-year plan. This option is particularly useful if you have fallen behind on mortgage payments.

Stay Current on Mortgage Payments

Regardless of the type of bankruptcy you choose, staying current on your mortgage payments is essential. Failing to keep up with payments may lead to foreclosure, even if you file for bankruptcy. If you are struggling to catch up, Chapter 13 bankruptcy can help you create a repayment plan that allows you to get back on track while keeping your home.

Pre-Bankruptcy Counseling

Before filing for bankruptcy, it is required to undergo credit counseling. This process can help you evaluate your financial situation and consider alternative solutions such as debt negotiation or other forms of relief before committing to bankruptcy. This step can provide valuable insights into keeping your house while addressing your debt issues.

Working with a Bankruptcy Attorney

Consulting with a qualified bankruptcy attorney in Georgia is highly recommended. An attorney can assist you in understanding the nuances of your case, ensure that you properly file your exemptions, and help you navigate the complex bankruptcy process. They can also offer personalized strategies to maximize your chances of keeping your home.

Bundle Your Debts

In Chapter 13 bankruptcy, you may have the opportunity to bundle your debts, which can make it easier to manage payments. This can free up more funds to focus on your mortgage, ensuring you maintain your home throughout the bankruptcy process.

Stay Informed of Lender Policies

It's essential to remain informed about your lender’s policies during bankruptcy. Some lenders may have programs to assist homeowners who are struggling financially. Knowing your options can empower you to act sooner, possibly even before you file for bankruptcy.

In summary, keeping your house while filing for bankruptcy in Georgia is possible through understanding exemptions, choosing the right type of bankruptcy, and staying informed about both your financial options and legal rights. By working with a knowledgeable bankruptcy attorney and making informed decisions, you can navigate this challenging situation while protecting your most valuable asset—your home.