Chapter 7 Bankruptcy
Georgia Chapter 7 Bankruptcy Lawyers
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There are several types of bankruptcy to consider, though chapter 7 and chapter 13 are the most common. Our experienced bankruptcy team is here to help guide you through your options and decide what would be the best route for your unique situation.
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The Workings of a Chapter 7 Bankruptcy
One of our Georgia bankruptcy lawyers is going to assist you through the whole process involved in filing for Chapter 7. You have two forms of debt: secured and unsecured.
Secured debt would be something like a mortgage, car loan, furniture debt, etc., while unsecured debt would be something like credit cards, personal notes, some overdue taxes or student loans. Child support and alimony are treated separately.
What You Need to Know Getting Started
When you file, you have to do credit counseling within six months of filing or else the process will not begin. There will be paperwork that you need to handle including making a petition to the court to officially kick off the proceedings. One of our Georgia chapter 7 bankruptcy lawyers will be able to guide you.
You need to be ready to show your personal information such as your debts from creditors, your assets, income, and what you typically spend in a given period of time.
Once you file, debt collectors are no longer going to be able to call you all the time.
You will have a trustee assigned to oversee your bankruptcy. They are an attorney who is specially appointed to serve as a trustee in a certain geographical area. They are in charge of reviewing your assets and debts.
Problems with Filing for Chapter 7 Bankruptcy
As you may have already understood, you are going to be able to free yourself from a number of the debts that have been causing you stress. It does not come without a cost. Occasionally you are going to have to give up some things to make it work. The law does let you keep some of your properties that are protected, commonly called exempt property.
You may be worried about keeping your home and your car. In a Chapter 7 you have to keep these payments current or the creditor is allowed to ask the court for a right to repossess. If you cannot keep up with the payments. Chapter 7 may not be the call for you. Our Georgia chapter 7 bankruptcy lawyers can help you figure out the best option, as they handle many other types of bankruptcy. Call us right away to discuss alternatives to Chapter 7. Chapter 13 may be more appropriate.
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More Chapter 7 Info
What You Need in Order to File for Chapter 7 Bankruptcy
When filing any bankruptcy, your income is going to be a factor. There are specific guidelines for income and expenses allowed for individuals filing a Chapter 7 bankruptcy. If you make under a certain amount, you automatically qualify for Chapter 7. If you are above a certain threshold as governed by Georgia’s allowances, you will have to complete a “Means Test” to determine your eligibility. The idea is that the court is trying to determine how much you have left over after you paid your monthly expenses. It may turn out that you are not eligible for bankruptcy because of your debt-to-income ratio.
The Benefits of a Chapter 7 Bankruptcy
A Chapter 7 bankruptcy liquidates or eliminates all unsecured debt such as credit cards, personal bills, medical bills, delinquent rent, things like that. Now, if you’re going to keep your car, your house, or your apartment, of course, you have to keep the current payments made. It doesn’t discharge any debts that are current after the filing of a bankruptcy.
Say, for instance, you were in an automobile wreck and you have a lot of medical bills. Those medical bills are now in collection. A Chapter 7 would discharge those medical bills many times.
What assets can be protected under a chapter 7 bankruptcy?
One of the primary questions that our clients ask us is what assets are protected in a Chapter 7 bankruptcy in Georgia. There’s a term called exempt assets. It’s a term that attorneys use that most people would never use in their ordinary language. Exempt assets are basically assets that the state of Georgia has determined that, no matter what happens, you can protect these assets from your creditors.
Georgia has established a particular bankruptcy statute that lines out those assets. For instance, you can protect up to:
- $1,500 of equity in your house
- $5,000 of equity in an automobile
- $2,000 equity if you cash your regular life insurance policy
- $1,200 in tools of the trade
- $1,200 in other assets that you might have.
There’s a smattering of other type of protections. One of the big protections is retirement plans. You can always protect unlimited amounts of monies in retirement plans that are tax-exempt, for instance, 401(k), your employee provided retirement plan. IRAs and other types of retirement plans are always fully protected.
If you have any questions concerning what assets are protected and what assets are not protected, you can give our office a call. We can send you a complete itemization sheet exactly from the Georgia code.
Who is not eligible for a chapter 7 discharge in Georgia?
We often get asked who is eligible or not eligible to file a Chapter 7 bankruptcy in Georgia. With the change in the law in 2005, eligibility for Chapter 7 bankruptcies shifted somewhat. You can not file a Chapter 7 bankruptcy in Georgia, if:
- You filed a Chapter 7 within the past eight years.
- You filed a Chapter 13 within the past six years.
- You dismissed a bankruptcy in the past 180 days.
One other issue that you have to always be concerned with is what they call the means test. Georgia, as well as every other state, have certain criteria which allow people and size of families in set income limits and who cannot file a Chapter 7 bankruptcy. If you’re single, the limit is set at one figure. If you’re a family of five, then your figure is at a different number. You have to run through a computerized program on means testing to determine whether or not you are eligible for filing the Chapter 7. It’s not very complicated, but it is an absolute requirement for the filing of Chapter 7.