Chapter 7 vs. Chapter 13 in Georgia: What’s Right for You?
Overwhelmed by Debt in Georgia? You’ve Got Options.
If you’re feeling buried under debt, you’re not alone—and you do have options. For many Georgia residents, bankruptcy offers a legal path to financial relief. But when you start looking into it, one big question comes up: Should I file Chapter 7 or Chapter 13?
Both offer powerful protections, but they work very differently. Here’s how to figure out which one fits your situation.
What Is Chapter 7 Bankruptcy?
Chapter 7 is sometimes called “liquidation bankruptcy.” It’s designed to wipe out unsecured debts like:
- Credit cards
- Medical bills
- Personal loans
- Payday loans
You may have to give up some property, but most people filing in Georgia keep everything they own thanks to state exemption laws.
Pros of Chapter 7:
- Fast—usually completed in 3–6 months
- No repayment plan required
- Stops garnishments, lawsuits, and collections immediately
- Fresh start for people with limited income
Considerations:
- You must qualify through a Means Test (based on your income and expenses)
- Doesn’t stop foreclosure if you're behind on your mortgage
- Can’t discharge certain debts (like child support or student loans)
What Is Chapter 13 Bankruptcy?
Chapter 13 is known as a “reorganization” bankruptcy. You keep all your property, but you repay a portion of your debts through a 3–5 year payment plan.
This is ideal for people who have income but are behind on big payments like:
- Mortgages
- Car loans
- Taxes
Chapter 13 can stop foreclosure and repossession—and give you time to catch up.
Pros of Chapter 13:
- Keep your home and car, even if you’re behind
- Consolidates debt into one manageable payment
- Stops interest and penalties on certain debts
- Great for protecting assets with too much equity
Considerations:
- Takes longer (3–5 years to complete)
- Requires regular income to maintain the plan
- Monthly trustee payments are mandatory
Which One Is Right for You?
| Situation | Best Fit |
|---|---|
| Low income, mostly credit card or medical debt | Chapter 7 |
| Behind on mortgage or car payments | Chapter 13 |
| You want to be done quickly | Chapter 7 |
| You earn too much for Chapter 7 | Chapter 13 |
| You’re facing foreclosure or repossession | Chapter 13 |
| You want to keep property with equity above Georgia’s exemptions | Chapter 13 |
Bankruptcy in Georgia: What Makes It Unique?
Georgia’s bankruptcy laws include:
- $21,500 homestead exemption ($43,000 if jointly owned)
- $5,000 vehicle exemption
- The Means Test for Chapter 7 varies based on median income in Georgia
- Courts and trustees are local—filing with a local attorney gives you a clear advantage
Let’s Find the Right Path—Together
At Jack Setters Attorney at Law, we’ve helped hundreds of individuals and families in Georgia choose the right bankruptcy chapter and move forward. Whether you’re trying to stop garnishment, save your home, or just breathe again financially—we’re here to help.
Schedule your free consultation today and let’s talk about whether Chapter 7 or Chapter 13 is the best fit for your unique situation.
