Chapter 7 Bankruptcy
Filing Chapter 7 Bankruptcy in Atlanta
Chapter 7 provides immediate relief for people struggling with unsecured debts such as medical bills, credit card debts, guaranteed business debt and certain tax debts. Immediately after filing your Chapter 7 case, all collection activity from creditors will be stopped by what is known as the automatic stay. This “stay” operates to do just what it implies, to “stay” any collection activity against you once your case is filed. Approximately four months after you file your case, you will receive a Chapter 7 discharge, which will release you of any personal liability on most debts and prevent creditors from contacting you in the future regarding those discharged debts.
Am I Eligible To File Chapter 7?
The 2005 amendments to the Bankruptcy Code brought new challenges to taking advantage of the Chapter 7 discharge. The “Means Test” is the test to determine whether the Debtor has the means to pay his debts. If your income falls below the median income for the state in which you reside, you are automatically presumed to pass the means test and are eligible to file bankruptcy. If you make above the median income, I can help you overcome the presumption that you are ineligible to file by deducting certain costs and payments to show that you should be eligible to take advantage of the Chapter 7 discharge rather than being forced into a Chapter 13 repayment plan. If you have primarily business debts, then the means test does not apply, and you can file a Chapter 7 regardless of your income level.
FORECLOSURE AND REPOSSESSION
One of the most common questions I receive is whether filing for bankruptcy will save your house or car from foreclosure. The answer is: “it depends.” While an imminent foreclosure or repossession will be prevented upon filing, unless you plan to reaffirm the underlying debt (enter into a new agreement with your house or car lender to agree that your mortgage or car loan will not be subject to discharge), a creditor will ultimately have the right to foreclose on your home prior to case closure through the filing of a motion for relief from the automatic stay. This is a fact that most attorneys will not let you know up front. If you cannot afford to keep your house, then Chapter 7 will not help you. Those who wish to keep their homes and cars should consider filing a Chapter 13 case instead. If you are current on your secured debts (house and car) and can either pass the means test or have primarily business debts, then Chapter 7 may be your best option.
There are five important groups of people you need to be aware of in your Chapter 7 bankruptcy case.
1. The Chapter 7 Trustee: The person tasked with taking inventory of your assets and liquidating any non-exempt property for the benefit of creditors. The Trustee is not a court or government employee, but an individual appointed by the U.S. Trustee to administer your case. The Trustee gets paid a flat-fee of $60 (taken as a part of the filing fee) and makes money by liquidating your assets.
2. The Debtor: This is you.
3. Your Attorney: The lawyer you choose to represent you in your bankruptcy case.
4. The Judge: The man or woman in the shiny black robe. The Judge is there to decide any disputes that cannot be agreed to between the Trustee, any creditors, and the Debtor.
5. Your Creditors: You owe these people money (although we can object to a creditor’s claim if grounds exist to do so), and they will be represented by their own attorneys.
KEEPING YOUR STUFF
One of the most common misconceptions about Chapter 7 bankruptcy is that you will lose all your property. This is simply not the case. You can even keep your house and car under certain circumstances. Most of your household property is exempt from creditor collection efforts by law. These laws are called the Georgia “Exemption” statutes. By taking advantage of these “Exemptions”, I can protect your property from being liquidated by the Trustee. This is one of the more complicated areas of bankruptcy law and the prime reason why people who decide not to seek the counsel of an experienced bankruptcy attorney regret filing bankruptcy.