Many people choose to file for bankruptcy when their financial situation becomes overwhelming. A Georgia Chapter 7 bankruptcy can help in this situation, as it allows for the filer’s debts to be discharged. This gives the filer a fresh financial start—they are able to move forward in life without the stress of crippling debt.
A Chapter 7 bankruptcy is often referred to as a liquidation bankruptcy. This is because in a Chapter 7 bankruptcy, the filer’s assets are given to the bankruptcy trustee and then liquidated, or sold, to pay back debt creditors. As a result, if you already have a car, you may be required to surrender that asset and others to your trustee. If you don’t already own a car, but need to buy one, it is important to know when you can buy without it having consequences on your bankruptcy.
Here are a couple things you should know about buying a car and bankruptcy:
- Be Careful When Buying a Car Right Before Bankruptcy: If you are planning on filing for bankruptcy, you need to be cautious about buying a new car. Going further into debt right before bankruptcy can lead to questions about fraud and your bankruptcy could be objected to or dismissed. If you need to by a car before filing for bankruptcy, consider buying one that is more economic and would not require a loan or only requires a small loan. This way, it may be possible to exempt your car from being taken and sold and you can sign a reaffirmation agreement to keep your car. If your car is too expensive or your loan too large, your car will likely be sold by the bankruptcy trustee to pay back your creditors.
- Buying a Car After Bankruptcy Is Possible: Some people worry that filing for bankruptcy will prevent them from purchasing a car for a long time afterwards. This can be particularly concerning if you need a car to get to and from work so you can avoid future financial issues. Luckily, you can often qualify for a car loan very soon after your bankruptcy is discharged. Although the interest rate on the loan may be higher, it is still possible to get a loan for your car. A recent bankruptcy discharge means you cannot file again for years, so a creditor is generally willing to approve your loan, allowing you to get a car after your discharge.
Get Your Bankruptcy Questions Answered
Having a car, and the ability to buy one when you need to, is very important. If you are thinking about filing for bankruptcy and have questions about when to buy a new car, if you will be able to keep your car, or if you will be able to qualify for a car loan afterwards, reach out to an experienced Georgia Bankruptcy attorney at The Ballard Law Group. We offer a free initial bankruptcy consultation so you can get the answers to your questions about how bankruptcy would impact your personal situation. Call us today at 404-220-9906 to schedule your free initial consultation at either our Atlanta or Lawrenceville office.
What Happens to My Savings Account While I file for Bankruptcy?
Filing for bankruptcy does not mean that you have no money at all. Instead, filing for bankruptcy usually means you are struggling with excessive debt, and need a fresh start. The purpose of a bankruptcy, depending on which type you file, is to discharge your debts or create a doable debt repayment plan so that you can get to a better financial place.
Before filing for bankruptcy, you may still have some money in a savings account. If you do have money in a savings account, it is important to know what will happen to that money if you choose to file for bankruptcy.
Savings accounts and Bankruptcy
When you file for bankruptcy, everything you currently own becomes part of the bankruptcy estate. You will have to list all of your assets and this includes any money in your savings account. The bankruptcy trustee then uses money from any assets in the bankruptcy estate to pay back creditors. This means that it is possible for the trustee to take the money in your savings account for this purpose.
So what should you do if you want to file for bankruptcy, but have money in your savings account?
- Don’t try to withdrawal your money and hide it!—as previously mentioned, when you file for bankruptcy you must list all your assets, and that includes your money in your savings account. Don’t try to withdrawal it right before filing in an attempt to hide it as this will likely lead to accusations of bankruptcy fraud or dismissal of your bankruptcy without a discharge.
- Know that you may be able to protect money in your savings account by using an exemption—There is a way to possibly protect the money in your savings account by using a Georgia bankruptcy exemption. In Georgia, state exemptions prevent certain assets and money up to a particular value from being used to repay creditors. One exemption, the wild card exemption, allows for you to exempt $1,200 worth of property of your choosing. Therefore, if you haven’t used up this exemption on other property, you can use it to protect up to $1,200 of your savings account.
- Consult a skilled Georgia Bankruptcy Attorney—The best thing to do when you are considering filing for bankruptcy, and are worried about your assets such as your savings account, is to talk to an experienced bankruptcy attorney. The attorney can help you understand how to handle savings money and the best way to use your exemptions to try to protect it and avoid any problems that would prevent a successful discharge.
Get Free Georgia Bankruptcy Advice
If you are considering bankruptcy as a means to get in a better financial situation, but have questions on how it could impact cash in your savings account, make sure you seek the legal guidance of an experienced Atlanta bankruptcy attorney. The skilled attorneys at the Ballard Law Group have years of experience helping individuals through the bankruptcy process and can answer your questions about your specific situation. To find out about how bankruptcy can improve your financial future, contact us for a case consultation by calling 404-220-9906.