Chapter 7 Bankruptcy Lawyer
In Chapter 7 bankruptcy, you can have all of your debts discharged (forgiven) in one fell swoop. You won’t pay a dime, except for certain debts like recent taxes, child support, and student loans which are non-dischargable. Chapter 7 cases are usually completed in 3-4 months. The only downside to a chapter 7 is that if you are behind on your house or car payment, we cannot force the lender to let you keep the house or car. In that case, a chapter 13 may be the better option for you.
WHAT IS CHAPTER 7 BANKRUPTCY?
Chapter 7 bankruptcy, sometimes referred to as a “liquidation bankruptcy” or a “fresh start” bankruptcy is a legal proceeding. If you have assets that are in excess of the exemption amounts, those assets will be liquidated, or sold, to pay some of your debts. In most chapter 7 cases, there are not any unexempt assets, so the trustee files a report of no distribution with the court, meaning there will be no distribution to the creditors.
During bankruptcy proceedings, you will meet once with someone called the “trustee” under Section 341. This meeting allows the trustee to find out if you have any unexempt assets by asking you specific questions outlined in the US Bankruptcy Code. For most cases, this meeting lasts only about 5-10 minutes. This meeting takes place via phone conference call. You normally do not have to go to court or appear before a judge in a chapter 7 bankruptcy case. About 60 days after the 341 hearing, you will receive a discharge that will relieve you from all dischargeable debts.
Advantages of Filing for Chapter 7 Bankruptcy
If you need to file Chapter 7 bankruptcy, it is a way to reset your debt and start fresh. There are numerous benefits, and sometimes when debt settlement or other debt relief methods are not the answer, filing bankruptcy is the way to go.
Can Filing Chapter 7 Bankruptcy Stop You From Getting Credit?
The notion that filing for a Chapter 7 bankruptcy will ruin your credit for years is not correct. People who go bankrupt and resort to filing Chapter 7 bankruptcy can immediately start rebuilding their credit. And it takes only about 18 months of being regular in timely payment of bills to re-establish a good credit rating. For instance, people who had filed under Chapter 7 bankruptcy were able to buy a home in just 2 years after receiving a Chapter 7 discharge.
Prevent Creditor Harassment
In the normal course of debt collections, you get inundated with calls from creditors, either on the phone or physically, demanding their invested money back. However, filing Chapter 7 bankruptcy saves you from all this. Once you file a chapter 7, creditors are notified and get automatically barred by law from calling you or taking any collection actions. If they persist, we help you take legal action against them and make them pay you for their violation of the law. This not only saves you from harassment but provides a much-needed breathing space.
Eliminate Debts
Once the Chapter 7 bankruptcy proceedings conclude, most of your debts are discharged, meaning you will no longer owe them. These include three-year-old income taxes, rent and utility bills of the past, medical bills, and credit card debt.
The are several debts that don’t get discharged under Chapter 7 bankruptcy:
- Alimony and child support
- Some types of student loans
- A monetary penalty imposed by the court
How Often Can You File Chapter 7 Bankruptcy?
If you have been granted a Chapter 7 discharge within the past eight years, you cannot file it again. However, you can file a Chapter 13 bankruptcy in four years.
Do You Qualify for Chapter 7 Bankruptcy in Georgia?
Although laws and rules on bankruptcy may differ from state to state, you can qualify for Chapter 7 bankruptcy in Georgia if you meet its specific requirements:
First, you need to qualify the ‘means test’.
Second, you do not want to have too much in assets that can be liquidated to repay creditors.
Georgia does offer exemptions that protect most property in Chapter 7 cases.
For instance, you are allowed to keep up to $21,500 in value on your home, if you are single. For married couples, this value is $43,000. If the entire homestead exemption is not used, $10,000 of that exemption can be extended towards any other property that you wish to retain. Keep in mind that you want to have an attorney help you calculate whether or not your house is exempt. Experienced attorneys know how to take advantage of other factors such as “cost of sale” that can lower your theoretical home value in a chapter 7.
Can You Keep Your Car/House When You File Chapter 7 Bankruptcy?
Georgia law allows keeping up to $5,000 worth of vehicles and $5,000 of personal property. Attorneys well versed in the bankruptcy laws of Georgia can handle these rules and regulations efficiently.
As far as the house is concerned, you can keep it under two conditions:
- You are current with your mortgage payments at the time of filing.
- The state laws permit exemption of all the equity in the property. Similarly, for retaining your car in Chapter 7 bankruptcy, you will need to be current with your loan payments and the state laws allow exemption of equity on your vehicle. The best part is that it takes a relatively short period for getting a bankruptcy Chapter 7 discharge. You can get it within four to six months from the date of filing.
Does Everyone Qualify for Chapter 7 Bankruptcy?
Unfortunately, everyone doesn’t qualify for Chapter 7 bankruptcy. This is due to the stringent conditions laid out in the Bankruptcy Abuse Prevention and Consumer Act of 2005.
Debtors need to pass the ‘means test’ to prove that their income is not too high for qualifying for a chapter 7 bankruptcy.
The Act also mandates that you deposit the following documents to prove your eligibility for bankruptcy. These include:
- Latest payroll statement.
- List of your debts.
- List of your average monthly household living expenses.
How to File Chapter 7 Bankruptcy
Filing Chapter 7 on your own is fraught with risks. if you don’t know what you’re doing, you can miss important opportunities, or worse, get yourself in a bunch of trouble for not following the US Bankruptcy Code, which is incredibly detailed and complex. Instead, you want a knowledgeable and experienced Chapter 7 bankruptcy attorney. Our experienced professionals can take you through the steps in the bankruptcy process and provide correct guidance in this matter.
First of all, you need to take a ‘means test’ to determine whether you are eligible to file a Chapter 7 bankruptcy petition.
To qualify, your income needs to be lower than the median income of your state. In Georgia, the median income for a family of two stands at $68,295 per year in 2022, but this number is always changing. And this is just the first step. Even if you’re over median, our experienced chapter 7 bankruptcy attorneys can still often times get you through.
An income higher than the state’s median income may disqualify you from filing for bankruptcy under Chapter 7. However, if you don’t have any disposable income or it is too little then you will be eligible to file for Chapter 7 bankruptcy.
Your attorney will calculate this for you by collecting all information pertaining to your monthly income and expenses.
Next, you are required to take a court-approved credit counseling course and attach the certificate of completion with your petition. One can take this course online, and it takes just a few hours.
You must attach schedules with the bankruptcy petition.
The schedules include a list of your income, assets, and debts. This is an important step, and you must include all the debts on your schedule.
It is important to check and double check the list of debts on your schedule.
If you fail to include a debt, it will still be discharged, but the creditor will not have received notice. Once you file your petition, it will prevent your creditors from pursuing collection without a court order.
Appointment of a Trustee
The United States Trustee selects the trustee for Chapter 7 bankruptcy cases on a random basis. The primary job of a Chapter 7 trustee is to liquidate assets for the benefit of creditors. For this, the trustee will review your petition and schedules, filed in the court, and may also ask for more information. Although in 90 percent of the cases there are no assets available for liquidation due to exemption, the Chapter 7 trustees still distribute around $1.5 billion each year.
Section 341 – The Meeting of Creditors
As already mentioned, this is the “first meeting of creditors” with you and is presided over by the trustee. Under this section, the creditors are permitted to question you to find out whether you are holding any assets that can be sold to repay them. However, creditors rarely show up at these meetings, and instead it’s just the trustee asking the questions. The trustee also investigates any fraudulent transfer of property by you before filing.
Chapter 7 helps to release the following debts:
- credit card
- medical bills
- rent and utilities that are due
- some private student loans
- other unsecured debt.
Liquidating Assets
The trustee will sell a portion or all of your non-exempt property to pay off the creditors. The exempted property cannot be touched by the trustee or the court and remains safe.
You need experienced, responsive representation. We have more than 30 years of experience filing for bankruptcy in Georgia, with over 99% of Chapter 7 cases discharged. When it comes to your future, experience matters.
We Want You to Feel Heard Through the Bankruptcy Process
Our attorneys are always available to connect with clients and answer their concerns. You’ll always have access to their email and direct phone number to help put your mind at ease. Contact us to discuss your debt and find out if bankruptcy is the solution you need. You can schedule an in-office visit or a virtual meeting.