Chapter 13 Bankruptcy in Atlanta Increases in 2011

As Atlanta Bankruptcy Lawyers reported earlier this month, bankruptcies nationwide are dropping, which many people would consider great news and possibly an indication that the economy is improving.

But as unemployment continues to stay high -- higher in Georgia by about 1 percent than the rest of the country -- fewer filings of bankruptcy in Atlanta isn't a good sign at all. What experts believe is that credit card companies and banks have lowered their standards by extending lines of credit to struggling consumers, which is simply going to make their situation worse.
Newly released statistics show that while Chapter 7 bankruptcy filings have dropped during the first seven months of 2011 compared with the same period in 2010, Chapter 13 bankruptcy is actually on the rise. Statistics from the U.S. Bankruptcy Court for the Northern District of Georgia, which includes areas from Atlanta, Newnan and Gainesville in the south, to Rome in the north, show that more people are shifting away from Chapter 7 bankruptcy and toward Chapter 13 bankruptcy.

In 2010, 19,843 people filed Chapter 7 bankruptcy between January and July, down to 17,487 this year. That's about a 12 percent drop. But for Chapter 13 filings, the number has spiked about 10 percent from 11,291 in 2010 to 12,584 this year.

In both forms of bankruptcy, the consumer's debts can be discharged, offering him or her the same kind of freedom that others who finish the process enjoy. In Chapter 7, consumers can get a complete discharge of their debts after the process is complete. Chapter 13 bankruptcy works differently, but with the same result.

In Chapter 13, a person must set up a payment plan, usually over three to five years, with reasonable monthly payments to pay back creditors and lenders. After the payments are completed, all remaining debt is discharged and the person is through with those debts. Typically, Chapter 13 is designed for people who have assets such as a home that they want to try to protect. They are allowed to keep their assets, which is also the case for many people in Chapter 7 bankruptcy as well.

For those who are unemployed and have few prospects of getting a job, they are looking for a lifeline. If a credit card company offers a new line of credit, that's exactly what they seek to help them get by. Sadly, this is just going to push them further into debt while they hold out hope that a new source of income may be coming.

Even if they are fortunate enough to find work, they are now saddled with even more debt that likely outpaces their income. But many people simply rack up credit card bills and are hit with unrealistic interest rates and hidden fees. These are typical tactics by credit card companies to make money off the consumers who keep them in business.

So, it's not surprising that people are seeking ways to get help from these credit card companies. Bankruptcy is one of those ways to help. If you are in such a situation, find out what your options are today.

If you need to speak to an Atlanta bankruptcy attorney call the DebtStoppers Bankruptcy Law Firm at 800-440-7235 today for a free debt analysis.

More Blog Entries:

Atlanta Bankruptcies Dip, But That May Be Bad News: September 2, 2011

Medical Bills Increasing Factor in Atlanta Bankruptcy: August 30, 2011

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