Will I Lose All My Stuff When I File for Bankruptcy?

A major concern for anyone thinking about filing for bankruptcy, is whether they will lose their property. The answer depends in part on which Chapter you file for: Chapter 7 or Chapter 13 for individuals. In Chapter 13, your property is safe so long as you stick to the payment plan. With a Chapter 7, non-exempt property may be sold to pay creditors if the trustee believes those assets are of sufficient value to exceed any applicable costs of sale, various trustee fees, and other costs of administering assets of the bankruptcy estate.

Even if you file Chapter 7 bankruptcy where non-exempt property is subject to liquidation, you may get to keep all of your property. In fact, most Chapter 7 bankruptcies are “no asset” bankruptcies, which either means you don’t possess any non-exempt assets, or those you do have are not worth anything in respect to being sold to pay creditors.

Chapter 13 Bankruptcy

The object of a Chapter 13 bankruptcy is ensuring you can manage to pay your debts. That means getting to keep your property after the bankruptcy is complete, in most cases. The payment plan is intended to cover most, if not all of your debt. Monthly payment plans are set up over the course of 3-5 years in a Chapter 13 bankruptcy case. The length of your payment plan is determined primarily by your income and debts. Multiple factors are considered in preparing your payment plan.  After you have completed the payment plan, most debts are discharged meaning you have no liability for those debts and no longer owe anything to those creditors. However, some debts, such as child support, student loans, and certain taxes, are not dischargeable, and you will have to deal with those debts after the bankruptcy is finished.

Chapter 7 Bankruptcy

In a Chapter 7 bankruptcy case, you are not bound to pay debts in a court monitored payment plan. Creditors are paid when the trustee sells any non-exempt property. Exemptions are based on both state and federal laws and will vary from state to state. The proceeds of the sale of property are distributed by the court appointed trustee. You will receive your bankruptcy discharge once certain deadlines have passed and you fulfill the other requirements, such as attending the meeting of creditors and completing a personal financial management course. You must also advise the court on your plan of action for addressing secured debts. If you wish to keep a vehicle with debt on it, in most cases, you will continue to make payments directly to the applicable creditor. The same applies to other secured debts, such as mortgages, and usually you will need to be substantially current on these types of secured debts if you want to keep the collateral after filing a Chapter 7.

Bankruptcy Cases are Unique

What most people do not realize is every bankruptcy case is unique. It may seem like a straightforward process, but every individual’s personal financial circumstances dictate the course a bankruptcy case takes. If you would like to know more about how bankruptcy will impact your property ownership, speak to a reputable lawyer in Georgia.

How you approach bankruptcy is important as you are entering into a financial commitment no matter which way you look at it. How much that financial commitment benefits you is dependent of which chapter of bankruptcy you chose and for which you qualify, and how you wish to move forward in the future concerning what assets you might decide to surrender or keep. The goal in every case is to provide you with a fresh start and an improved financial outlook.

Bankruptcy Lawyer in Georgia

Hire a dependable bankruptcy lawyer in Georgia and trust H. Lehman Franklin P.C. to guide you through the process of filing Chapter 7 or Chapter 13 bankruptcy. We have the experience and compassion to help you get back on sound financial ground. You can reach our legal team at 912-764-9616, or email us at if you would like to arrange a consultation.