A Homeowner's Guide to Bankruptcy in Georgia

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Facing foreclosure can be a daunting experience, and understanding your options is crucial. This guide will give you a brief education on bankruptcy, explain how it works, and discuss its potential benefits and drawbacks. Additionally, we will explore an alternative solution that may better suit your needs. 

This is also known as liquidation bankruptcy. It involves the sale of your assets to pay off creditors. 

Here’s how it works: 

• Automatic Stay: Filing for Chapter 7 initiates an automatic stay, temporarily stopping foreclosure proceedings.

• Liquidation of Assets: Assets are sold to repay creditors. 

• Discharge of Debts: Unsecured debts, like credit card debts and medical bills, are typically discharged, relieving the debtor of personal liability.

Temporary Relief: The automatic stay provides temporary relief from foreclosure, buying time for the homeowner.

Potential Loss of Home: If the homeowner has significant equity (more than $21,500 if single or $43,000 if married and filing jointly), the house may be sold to repay creditors. However, if the equity in the home is less than that, the homeowner may keep the home.

No Long-Term Solution for Mortgage Debt: Chapter 7 doesn’t provide a long-term solution for mortgage arrears. The homeowner must pay the lender what it is owed.

The court sets a 3 to 5 year repayment plan where all disposable income goes to paying creditors. 

How it works: 

Automatic Stay: Filing for Chapter 13 initiates an automatic stay, temporarily halting foreclosure proceedings and other debt collection actions. 

Repayment Plan: Debtors provides a detailed income and expense report, and repayment plan gets set by the court where both past-due amounts of all debts and ongoing mortgage payments are being made.

Risk of Dismissal: Failure to make payments as scheduled can result in the dismissal of the case and a resumption of foreclosure proceedings 

The plan leaves little room for unexpected financial changes, such as medical emergencies or job loss.  

Our Home Retention Program is designed to help you keep your home and stop foreclosure by using some of the equity you already have.  

How It Works:  

1. Catch Up Payments and Stop Foreclosure:  

○ We immediately use some of your home’s equity to catch up on your payments  and stop the foreclosure process.  

2. Refinance Your Mortgage:  

○ Using our own credit, we refinance your mortgage into a new 30-year loan.  

3. Transition to Your Name:  

○ Once your credit is recovered and you’re back on your feet, you can replace the  loan in our name with one in your name.  

Benefits:  

• No Out-of-Pocket Costs: You won’t need to pay anything upfront.  
• Utilize Your Own Equity: We help you use the equity you already have in your home.  
• Keep Your Equity: You retain all your equity, minus a small fee for our services.  ● Credit Repair: Our program aids in repairing your credit, offering a safer and better alternative to bankruptcy or loan modification.  
• Fast Process: We can catch up your payments in as little as three days!  

Comparison  

Credit Impact:  

● Bankruptcy: Severely damages your credit, making future financial endeavors difficult.  

● Home Retention Program: Helps repair your credit and avoids the severe impacts  associated with bankruptcy.  

Cost:  

● Bankruptcy: Involves legal fees and potential loss of assets.  

● Home Retention Program: No out-of-pocket costs; uses your home equity to manage  payments.  

Time to Solution:  

● Bankruptcy: Can take several months to finalize.  

● Home Retention Program: Can catch up payments in as little as three days, providing  immediate relief.  

Outcome: 

● Bankruptcy: Risk of losing your home and other assets, with long-term financial  consequences.  

● Home Retention Program: You keep your home, maintain most of your equity, and  improve your credit